15 August 2000
Date: Tue, 15 Aug 2000 14:45:47 -0400
From: Derek Khlopin <DKhlopin@TIA.EIA.ORG>
Subject: D.C. Circuit CALEA Opinion Released
To: CYBERIA-L@LISTSERV.AOL.COM
The D.C. Circuit released today its decision regarding challenges to the FCC's CALEA 3rd Report and Order. Essentially (after looking it over briefly), the Court upheld the FCC's approval of the treatment in the industry standard (J-STD-025) of call location and packet data, while vacating and remanding the FCC's decision to require industry to revise the standard to include four of the FBI's "punch list" items.
The decision is available at: http://pacer.cadc.uscourts.gov/common/opinions/200008/99-1442a.txt
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 17, 2000 Decided August 15, 2000
No. 99-1442
United States Telecom Association, et al.,
Petitioners
v.
Federal Communications Commission and
United States of America,
Respondents
AirTouch Communications, Inc., et al.,
Intervenors
Consolidated with
99-1466, 99-1475, 99-1523
On Petitions for Review of an Order of the
Federal Communications Commission
Theodore B. Olson argued the cause for petitioners United
States Telecom Association, et al. With him on the briefs
were Eugene Scalia, John H. Harwood, II, Lynn R. Chary-
tan, Michael Altschul, Jerry Berman, James X. Dempsey,
Lawrence E. Sarjeant, Linda L. Kent, John W. Hunter and
Julie E. Rones.
Gerard J. Waldron argued the cause for petitioners Elec-
tronic Privacy Information Center, et al. With him on the
briefs were Kurt A. Wimmer, Carlos Perez-Albuerne, Law-
rence A. Friedman, Kathleen A. Burdette, David L. Sobel and
Marc Rotenberg.
Stewart A. Baker, Thomas M. Barba, Matthew L. Stennes,
Mary McDermott, Brent H. Weingardt, Todd B. Lantor,
Robert A. Long Jr., Kevin C. Newsom, Robert B. McKenna
and Dan L. Poole were on the brief for intervenor Sprint
Spectrum, et al.
Philip L. Malet, William D. Wallace and William F. Adler
were on the brief for intervenors Globalstar, et al.
John E. Ingle, Deputy Associate General Counsel, Federal
Communications Commission, argued the cause for respon-
dent Federal Communications Commission. With him on the
brief were Christopher J. Wright, General Counsel, Laurence
N. Bourne and Lisa S. Gelb, Counsel.
James M. Carr, Counsel, entered an appearance.
Scott R. McIntosh, Attorney, U.S. Department of Justice,
argued the cause for respondent United States of America.
With him on the brief were David W. Ogden, Acting Assistant
Attorney General, and Douglas N. Letter, Attorney.
Before: Ginsburg, Randolph and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Tatel.
Tatel, Circuit Judge: The Communications Assistance for
Law Enforcement Act of 1994 requires telecommunications
carriers to ensure that their systems are technically capable
of enabling law enforcement agencies operating with proper
legal authority to intercept individual telephone calls and to
obtain certain "call-identifying information." In this proceed-
ing, telecommunications industry associations and privacy
rights organizations challenge those portions of the FCC's
implementing Order that require carriers to make available to
law enforcement agencies the location of antenna towers used
in wireless telephone calls, signaling information from custom
calling features (such as call forwarding and call waiting),
telephone numbers dialed after calls are connected, and data
pertaining to digital "packet-mode" communications. Accord-
ing to petitioners, the Commission exceeded its statutory
authority, impermissibly expanded the types of call-
identifying information that carriers must make accessible to
law enforcement agencies, and violated the statute's require-
ments that it protect communication privacy and minimize the
cost of implementing the Order. With respect to the custom
calling features and dialed digits, we agree, vacate the rele-
vant portions of the Order, and remand for further proceed-
ings. We deny the petitions for review with respect to
antenna tower location information and packet-mode data.
I
The legal standard that law enforcement agencies
("LEAs") must satisfy to obtain authorization for electronic
surveillance of telecommunications depends on whether they
seek to intercept telephone conversations or to secure a list of
the telephone numbers of incoming and outgoing calls on a
surveillance subject's line. In order to intercept telephone
conversations, law enforcement agencies must obtain a war-
rant pursuant to Title III of the Omnibus Crime Control and
Safe Streets Act of 1968. Before issuing a Title III wiretap
warrant, a judge must find that: (1) "normal investigative
procedures have been tried and have failed or reasonably
appear to be unlikely to succeed if tried or to be too danger-
ous"; and (2) there is probable cause for believing "that an
individual is committing, has committed, or is about to com-
mit" one of a list of specifically enumerated crimes, that the
wiretap will intercept particular communications about the
enumerated offense, and that the communications facilities to
be tapped are either being used in the commission of the
crime or are commonly used by the suspect. 18 U.S.C.
s 2518(3). The Electronic Communications Privacy Act of
1986 ("ECPA"), id. s 3121 et seq., establishes less demanding
standards for capturing telephone numbers through the use
of pen registers and trap and trace devices. Pen registers
record telephone numbers of outgoing calls, see id. s 3127(3);
trap and trace devices record telephone numbers from which
incoming calls originate, much like common caller-ID sys-
tems, see id. s 3127(4). Although telephone numbers are not
protected by the Fourth Amendment, see Smith v. Maryland,
442 U.S. 735, 742-45 (1979), ECPA requires law enforcement
agencies to obtain court orders to install and use these
devices. Rather than the strict probable cause showing
necessary for wiretaps, pen register orders require only
certification from a law enforcement officer that "the informa-
tion likely to be obtained is relevant to an ongoing criminal
investigation." 18 U.S.C. s 3122(b)(2).
Wiretaps, pen registers and trap and trace devices worked
well as long as calls were placed using what has come to be
known as POTS or "plain old telephone service." With the
development and proliferation of new telecommunications
technologies, however, electronic surveillance has become in-
creasingly difficult. In congressional hearings, the FBI iden-
tified 183 "specific instances in which law enforcement agen-
cies were precluded due to technological impediments from
fully implementing authorized electronic surveillance (wire-
taps, pen registers and trap and traces)." H.R. Rep. No.
103-827, pt. 1, at 14-15 (1994). These impediments stemmed
mainly from the limited capacity of cellular systems to accom-
modate large numbers of simultaneous intercepts as well as
from the growing use of custom calling features such as call
forwarding, call waiting, and speed dialing. See id. at 14.
Finding that "new and emerging telecommunications tech-
nologies pose problems for law enforcement," id., Congress
enacted the Communications Assistance for Law Enforce-
ment Act of 1994 "to preserve the government's ability,
pursuant to court order or other lawful authorization, to
intercept communications involving advanced technologies
such as digital or wireless transmission modes, or features
and services such as call forwarding, speed dialing and con-
ference calling, while protecting the privacy of communica-
tions and without impeding the introduction of new technolo-
gies, features, and services," id. at 9. Known as CALEA, the
Act requires telecommunications carriers and equipment
manufacturers to build into their networks technical capabili-
ties to assist law enforcement with authorized interception of
communications and "call-identifying information." See 47
U.S.C. s 1002. The Act defines "call-identifying information"
as "dialing or signaling information that identifies the origin,
direction, destination, or termination of each communication
generated or received by a subscriber by means of any
equipment, facility, or service of a telecommunications carri-
er." Id. s 1001(2). CALEA requires each carrier to
ensure that its equipment, facilities, or services ... are
capable of
(1) expeditiously isolating and enabling the govern-
ment, pursuant to a court order or other lawful authori-
zation, to intercept, to the exclusion of any other commu-
nications, all wire and electronic communications carried
by the carrier within a service area to or from equip-
ment, facilities, or services of a subscriber of such carrier
concurrently with their transmission to or from the sub-
scriber's equipment, facility, or service, or at such later
time as may be acceptable to the government; [and]
(2) expeditiously isolating and enabling the govern-
ment, pursuant to a court order or other lawful authori-
zation, to access call-identifying information that is rea-
sonably available to the carrier....
Id. s 1002(a)(1)-(2). Carriers must also "facilitat[e] autho-
rized communications interceptions and access to call-
identifying information ... in a manner that protects ... the
privacy and security of communications and call-identifying
information not authorized to be intercepted." Id.
s 1002(a)(4)(A). Because Congress intended CALEA to
"preserve the status quo," the Act does not alter the existing
legal framework for obtaining wiretap and pen register autho-
rization, "provid[ing] law enforcement no more and no less
access to information than it had in the past." H.R. Rep. No.
103-827, pt. 1, at 22. CALEA does not cover "information
services" such as e-mail and internet access. 47 U.S.C.
ss 1001(8)(C)(i), 1002(b)(2)(A).
To ensure efficient and uniform implementation of the Act's
surveillance assistance requirements without stifling techno-
logical innovation, CALEA permits the telecommunications
industry, in consultation with law enforcement agencies, regu-
lators, and consumers, to develop its own technical standards
for meeting the required surveillance capabilities. See id.
s 1006. The Act "does not authorize any law enforcement
agency or officer" to dictate the specific design of communica-
tions equipment, services, or features. Id. s 1002(b)(1). Al-
though carriers failing to meet CALEA's requirements may
incur civil fines of up to $10,000 a day, see 18 U.S.C.
s 2522(c), the Act establishes a safe harbor under which
carriers that comply with the accepted industry standards will
be deemed in compliance with the statute, see 47 U.S.C.
s 1006(a)(2). But "if a Government agency or any other
person believes that such requirements or standards are
deficient, the agency or person may petition the Commission
to establish, by rule, technical requirements or stan-
dards...." Id. s 1006(b). Such Commission rules must:
(1) meet the assistance capability requirements of sec-
tion 1002 of [the statute] by cost-effective methods;
(2) protect the privacy and security of communications
not authorized to be intercepted;
(3) minimize the cost of such compliance on residential
ratepayers;
(4) serve the policy of the United States to encourage
the provision of new technologies and services to the
public; and
(5) provide a reasonable time and conditions for com-
pliance with and the transition to any new standard,
including defining the obligations of telecommunications
carriers under section 1002 of [the statute] during any
transition period.
Id.
Following two years of proceedings and extensive negotia-
tions with the FBI, the Telecommunications Industry Associ-
ation ("TIA"), an accredited standard-setting body, adopted
technical standards pursuant to CALEA's safe harbor, pub-
lishing them as Interim Standard/Trial Use Standard J-STD-
025. Known as the "J-Standard," this document outlines the
technical features, specifications, and protocols for carriers to
make subscriber communications and call-identifying informa-
tion available to law enforcement agencies having appropriate
legal authorization.
Challenging the J-Standard as "deficient," id., the Center
for Democracy and Technology petitioned the Commission for
a rulemaking to remove two provisions it claimed not only
violate CALEA's privacy protections but also impermissibly
expand government surveillance capabilities beyond those
authorized by the statute. One of the challenged J-Standard
provisions requires carriers to make available to law enforce-
ment agencies the physical location of the nearest antenna
tower through which a cellular telephone communicates at the
beginning and end of a call. According to the Center, this
requirement effectively converts ordinary mobile telephones
into personal location-tracking devices, giving law enforce-
ment agencies access to far more information than they
previously had. The Center also argued that cellular antenna
location information is not "call-identifying information," as
defined in both the statute and the J-Standard. The other
challenged provision relates to what is known as "packet-
mode data," which we shall describe in detail later in this
opinion. See Section III infra. At this point, suffice it to say
that, according to the Center, the J-Standard's inclusion of
packet-mode data enables law enforcement agencies to obtain
call content with no more than a pen register order.
Both the Justice Department and the FBI also petitioned
the Commission to modify the J-Standard, arguing that it
does not include all of CALEA's required assistance capabili-
ties. The Department provided a list, known as the "FBI
punch list," of nine additional surveillance capabilities that
law enforcement wanted the Commission to add. The punch
list included telephone numbers of calls completed using
calling cards as well as signaling information related to
custom calling features such as call waiting and conference
calling.
After soliciting public comment on the petitions, see Public
Notice, 13 F.C.C.R. 13786 (1998); Further Notice of Pro-
posed Rulemaking 13 F.C.C.R. 22632 (1998), the Commission
resolved the challenges to the J-Standard in its Third Report
& Order, see In the Matter of Communications Assistance
for Law Enforcement Act, 14 F.C.C.R. 16794 (1999) ("Third
Report & Order"). The Commission denied the Center's
petition to delete cellular antenna location information and
packet-mode data. The location of cellular antenna towers
used at the beginning and end of wireless calls, the Commis-
sion ruled, falls within CALEA's definition of call-identifying
information because it "identifies the 'origin' or 'destination'
of a communication." Id. at 16815 p 44. With respect to
packet-mode data, the Commission recognized the uncertain-
ty regarding the technical feasibility of separating call content
(requiring a Title III wiretap warrant) from call-identifying
information (requiring only a pen register order). See id. at
16819-20 pp 55-56. Although inviting further study of the
matter, the Commission declined to remove packet-mode data
from the J-Standard, explaining that CALEA makes no
distinction between packet-mode and other communications
technologies. See id.
The Commission granted the Justice Department/FBI peti-
tion in part, adding four of the nine punch list capabilities to
the J-Standard, adding two more in part (neither is chal-
lenged here), and declining to add three others (also unchal-
lenged). See id. at 16852 p 138. The four additions are:
(1) "Post-cut-through dialed digit extraction": This re-
quires carriers to use tone-detection equipment to gener-
ate a list of all digits dialed after a call has been
connected. Such digits include not only the telephone
numbers dialed after connecting to a dial-up long-
distance carrier (e.g., 1-800-CALL-ATT), but also, for
example, credit card or bank account numbers dialed in
order to check balances or transact business using auto-
mated telephone services, see id. at 16842-46 pp 112-23;
(2) "Party hold/join/drop information": This includes
telephone numbers of all parties to a conference call as
well as signals indicating when parties are joined to the
call, put on hold, or disconnected, see id. at 16825-28
pp 68-75;
(3) "Subject-initiated dialing and signaling informa-
tion": This includes signals generated by activating fea-
tures such as call forwarding and call waiting, see id. at
16828-30 pp 76-82; and
(4) "In-band and out-of-band signaling": This includes
information about signals sent from the carrier's network
to a subject's telephone, such as message-waiting indica-
tors, special dial tones, and busy signals, see id. at 16830-
33 pp 83-89.
Two industry associations--the United States Telecom As-
sociation and the Cellular Telecommunications Industry Asso-
ciation--joined by the Center for Democracy and Technology,
filed a petition for review in this court, as did the Electronic
Frontier Foundation, Electronic Privacy Information Center,
and American Civil Liberties Union. All petitions were con-
solidated. The Telecommunications Industry Association, the
standard-setting organization that developed and issued the
J-Standard, joined by another trade group, the Personal
Communications Industry Association, and two telecommuni-
cations carriers, Sprint PCS and U S West, intervened to
challenge the Third Report & Order, focusing on dialed digit
extraction, the most costly of the added punch list items.
The FCC and the Justice Department filed separate briefs
defending the Commission's action.
The consolidated petitions for review challenge six capabili-
ties: antenna tower location information and packet-mode
data, both of which were included in the J-Standard; and
dialed digit extraction, party hold/join/drop, subject-initiated
dialing and signaling, and in-band and out-of-band signaling,
the four punch list capabilities added by the Commission.
With respect to these challenged capabilities, petitioners con-
tend that the Commission: (1) exceeded its authority under
CALEA because at least some of the information required to
be made available to law enforcement is neither call content
nor "call-identifying information that is reasonably available
to the carrier," 47 U.S.C. s 1002(a)(2); (2) failed adequately
to "protect the privacy and security of communications not
authorized to be intercepted," as required by the statute, id.
s 1006(b)(2); and (3) failed both to ensure that the capability
requirements are implemented "by cost-effective methods,"
id. s 1006(b)(1), and to "minimize the cost of such compliance
on residential ratepayers," id. s 1006(b)(3). In Section II, we
take up the four challenged punch list capabilities and anten-
na tower location information. We consider packet-mode
communications in Section III.
II
Whether CALEA requires carriers to make available an-
tenna tower location information and the four punch list
capabilities turns on what the Act means by "call-identifying
information." To repeat, section 102(2) of CALEA defines
"call-identifying information" as "dialing or signaling informa-
tion that identifies the origin, direction, destination, or termi-
nation of each communication generated or received by a
subscriber by means of any equipment, facility, or service of a
telecommunications carrier." Id. s 1001(2). The Commis-
sion interprets this definition to require adoption of all chal-
lenged capabilities, each of which, it claims, makes available
information identifying the "origin, direction, destination, or
termination" of calls. Petitioners argue that the definition
limits "call-identifying information" to telephone numbers.
Because location information and the four punch list items
require carriers to make available more than telephone num-
bers, petitioners contend that these capabilities exceed
CALEA's requirements. They argue that there is no statuto-
ry basis for location information to have been included in the
J-Standard or for the Commission to have mandated the
punch list capabilities.
To resolve this challenge to the Commission's interpreta-
tion of a statute it is charged with administering, we proceed
according to Chevron U.S.A. Inc. v. Natural Resources De-
fense Council, Inc., 467 U.S. 837 (1984). We ask first "wheth-
er Congress has directly spoken to the precise question at
issue." Id. at 842. If it has, "that is the end of the matter;
for the court, as well as the agency, must give effect to the
unambiguously expressed intent of Congress." Id. at 842-43.
If we find the statute silent or ambiguous with respect to the
precise question at issue, we proceed to the second step of
Chevron analysis, asking "whether the agency's answer is
based on a permissible construction of the statute." Id. at
843. At this stage of Chevron analysis, we afford substantial
deference to the agency's interpretation of statutory lan-
guage. See id. at 844.
Beginning with Chevron step one, we think it clear that
section 102(2) does not "unambiguously" answer "the precise
question at issue": Is "call-identifying information" limited to
telephone numbers? To begin with, had Congress intended
to so limit "call-identifying information," it could have done so
expressly by using the term "telephone number" as it did in
both sections 103(a)(2) and 207(a)(1)(C) of CALEA. See 47
U.S.C. s 1002(a)(2); 18 U.S.C. s 2703(c)(1)(C). "Where Con-
gress includes particular language in one section of a statute
but omits it in another section of the same Act, it is generally
presumed that Congress acts intentionally and purposely in
the disparate inclusion or exclusion." Russello v. United
States, 464 U.S. 16, 23 (1983) (internal quotation marks and
alteration omitted); see also, e.g., District of Columbia Hosp.
Ass'n v. District of Columbia, 2000 WL 946581, at *3 (D.C.
Cir.). CALEA's definition of "call-identifying information,"
moreover, refers not just to "dialing ... information," but
also to "signaling information," leading us to believe that
Congress may well have intended the definition to cover
something more than just the "dialing ... information" con-
veyed by telephone numbers. Finally, section 103(a)(2) of
CALEA provides that when information is sought pursuant to
a pen register or trap and trace order, "call-identifying
information shall not include any information that may dis-
close the physical location of the subscriber (except to the
extent that the location may be determined from the tele-
phone number)." 47 U.S.C. s 1002(a)(2). As the Commis-
sion observed, Congress would have had no need to add this
limitation if "call-identifying information" referred only to
telephone numbers. See Third Report & Order, 14 F.C.C.R.
at 16815 p 44 n.95.
In support of their argument that "call-identifying informa-
tion" unambiguously means only telephone numbers, petition-
ers call our attention to the House Judiciary Committee
Report, which does seem to describe such information in
terms of telephone numbers. See H.R. Rep. No. 103-827, pt.
1, at 21. Apparently addressing post-cut-through dialed dig-
its, the Report even says that "other dialing tones that may
be generated by the sender that are used to signal customer
premises equipment of the recipient are not to be treated as
call-identifying information." Id. Yet the Report also echos
CALEA's inherent ambiguity, stating that call-identifying
information is "typically the electronic pulses, audio tones, or
signalling messages that identify the numbers dialed or other-
wise transmitted for the purpose of routing calls through the
telecommunications carrier's network." Id. (emphasis add-
ed). Although another section of the Report describes
CALEA as requiring carriers to make available "information
identifying the originating and destination numbers of target-
ed communications, but not the physical location of targets,"
id. at 16, that passage, as the Commission points out, appears
to deal with an earlier version of the statute--before the
definition of "call-identifying information" was expanded by
adding the terms "direction" and "termination."
Petitioners next argue that limiting "call-identifying infor-
mation" to telephone numbers mirrors ECPA's definitions of
"pen register" and "trap and trace device." Pen registers
record "the numbers dialed or otherwise transmitted," 18
U.S.C. s 3127(3) (emphasis added), and trap and trace de-
vices record "the originating number of ... an electronic
communication," id. s 3127(4) (emphasis added). Petitioners
contend that because CALEA's enforcement provisions are
limited to intercept warrants and to pen register and trap and
trace device orders, the statute's required capabilities must
likewise be restricted to the call content intercepted in a
wiretap and the dialed telephone numbers recorded by pen
registers. "It would have made no sense," say petitioners,
"for Congress to require carriers to provide a capability that
the surveillance laws do not authorize the government to
use." Final Brief of Petitioners USTA, CTIA, and CDT at
16.
This is an interesting argument, but hardly sufficient to
resolve CALEA's ambiguity. CALEA neither cross-
references nor incorporates ECPA's definitions of pen regis-
ters and trap and trace devices. Moreover, the fact that
CALEA's definition of "call-identifying information" differs
from ECPA's description of the information obtainable by pen
registers and trap and trace devices reinforces the statute's
inherent ambiguity.
Petitioners also rely on the J-Standard's explanation of the
terms used in CALEA's definition of call-identifying informa-
tion, pointing out that the J-Standard limits these terms to
telephone numbers:
[D]estination is the number of the party to which a call is
being made (e.g., called party); direction is the number
to which a call is re-directed or the number from which it
came, either incoming or outgoing (e.g., redirected-to
party or redirected-from party); origin is the number of
the party initiating a call (e.g., calling party); and termi-
nation is the number of the party ultimately receiving a
call (e.g., answering party). Interim Standard/Trial Use
Standard J-STD-025, at 5.
Because cell phone location information and the four chal-
lenged punch list capabilities call for more than telephone
numbers, petitioners argue that they conflict with the
J-Standard's interpretation of CALEA. Again, this is an
interesting argument, but not relevant at Chevron step one,
where our focus is on whether "the intent of Congress is
clear." Chevron, 467 U.S. at 842 (emphasis added). On that
issue, the authors of the J-Standard can provide no guidance.
Finally, petitioners point out that in Smith v. Maryland the
Supreme Court held that although the Fourth Amendment
protects the privacy of information conveyed during telephone
calls, i.e., the contents of conversations, callers have no rea-
sonable expectation of privacy in dialed telephone numbers.
See 422 U.S. at 742-45. Reading Smith's exception narrowly,
petitioners argue that other than call content interceptable
under a wiretap order, CALEA cannot require carriers to
provide law enforcement agencies anything more than the
telephone numbers dialed in order to complete calls. But
petitioners point to nothing in either CALEA or its legislative
history to suggest that Congress meant to follow Smith's
protected-unprotected distinction in defining call-identifying
information. Moreover, Smith's reason for finding no legiti-
mate expectation of privacy in dialed telephone numbers--
that callers voluntarily convey this information to the phone
company in order to complete calls--applies as well to much
of the information provided by the challenged capabilities.
See id. at 742.
Turning to the government's position, we understand nei-
ther the Commission nor the Justice Department to be argu-
ing that section 102(2) unambiguously includes more than
telephone numbers in the definition of "call-identifying infor-
mation," and for good reason. Although we reject petition-
ers' argument that section 102(2) is unambiguously limited to
telephone numbers, we think it equally clear that nothing
points to an "unambiguously expressed intent of Congress" to
require every one of the challenged assistance capabilities.
Chevron, 467 U.S. at 843. Instead, the two agencies urge us
to defer to the Commission's interpretation of the statute
pursuant to Chevron's second step. See id. at 844. Accord-
ing to the agencies, the Commission reasonably interpreted
"call-identifying information" to include the punch list capabil-
ities and antenna tower location information. Because we
reach different conclusions with respect to the punch list and
location information, we discuss them separately.
Punch List
Responding to the government's Chevron-two argument,
petitioners contend: (1) the Commission's interpretation of
"call-identifying information" to include the four added punch
list capabilities is unreasonable and thus unworthy of
Chevron-two deference; and (2) the Commission's decision to
modify the J-Standard to include the punch list reflects a lack
of reasoned decisionmaking, see generally, Motor Vehicle
Mfrs Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29
(1983). Because we agree with the latter argument, we need
not address the Commission's plea for Chevron deference.
It is well-established that " 'an agency must cogently ex-
plain why it has exercised its discretion in a given manner'
and that explanation must be 'sufficient to enable us to
conclude that the [agency's action] was the product of rea-
soned decisionmaking.' " A.L. Pharma, Inc. v. Shalala, 62
F.3d 1484, 1491 (D.C. Cir. 1995) (internal citation omitted)
(quoting Motor Vehicle Mfrs., 463 U.S. at 48, 52). The
Commission's determination that CALEA requires carriers to
implement the four punch list items fails this test. The
Commission asserted that each of the challenged punch list
capabilities is required by CALEA because each requires
carriers to make available "call-identifying information," but
it never explained--not in the Order and not in its brief--the
basis for this conclusion. Nowhere in the record did the
Commission explain how the key statutory terms--origin,
direction, destination, and termination--can cover the wide
variety of information required by the punch list. For exam-
ple, the Commission uses "origin" of a communication to
mean not only the telephone number of an incoming call, but
also a tone indicating that a new call is waiting. Adding the
waiting call to create a three-way call is yet another origin.
If a party is placed on hold and then re-joined to the call, the
Commission describes that event as "the temporary origin
... of a communication." Third Report & Order, 14 F.C.C.R.
at 16827 p 74. The Commission similarly uses "termination"
to cover many different kinds of information including tele-
phone numbers of outgoing calls, signals indicating that calls
have been placed on hold or switched to waiting calls, signals
that parties have been dropped from conference calls, busy
signals, and ringing tones. Yet the Commission never ex-
plained how each of these bits of information "identifies the
... termination of each communication." 47 U.S.C.
s 1001(2) (emphasis added). Instead, it simply concluded,
with neither analysis nor explanation, that each capability is
required by CALEA. See, e.g., Third Report & Order, 14
F.C.C.R. at 16827 p 74 ("Party join information appears to
identify the origin of a communication; party drop, the
termination of a communication; and party hold, the tempo-
rary origin, temporary termination, or re-direction of a com-
munication." (emphasis added)).
Perhaps the Commission can satisfactorily explain how
CALEA's terms can encompass such a wide range of informa-
tion. Because it has not, we cannot tell whether the punch
list capability requirements are "the product of reasoned
decisionmaking." Motor Vehicle Mfrs., 463 U.S. at 52.
The Commission's failure to explain its reasoning is particu-
larly serious in view of CALEA's unique structure. Rather
than simply delegating power to implement the Act to the
Commission, Congress gave the telecommunications industry
the first crack at developing standards, authorizing the Com-
mission to alter those standards only if it found them "defi-
cient." 47 U.S.C. s 1006(b). Although the Commission used
its rulemaking power to alter the J-Standard, it identified no
deficiencies in the Standard's definitions of the terms "ori-
gin," "destination," "direction," and "termination," which de-
scribe "call-identifying information" in terms of telephone
numbers. Were we to allow the Commission to modify the
J-Standard without first identifying its deficiencies, we would
weaken the major role Congress obviously expected industry
to play in formulating CALEA standards.
The Commission's decision to include the four challenged
punch list capabilities suffers from two additional defects.
The first relates to CALEA's requirements that Commission
rules must "meet the assistance capability requirements of
section 1002 of this title by cost-effective methods" and
"minimize the cost of such compliance on residential ratepay-
ers." Id. s 1006(b)(1), (3). Faced with multiple cost esti-
mates ranging as high as $4 billion for all carriers to imple-
ment the core J-Standard capabilities, the Commission
adopted an estimate submitted by five software suppliers
predicting that they would earn $916 million in revenues for
implementing the core J-Standard and $414 million for imple-
menting the punch list. Third Report & Order, 14 F.C.C.R.
at 16805 p 20, 16809 p 30. The Commission acknowledged
that "these estimates ... do not represent all carrier costs of
implementing CALEA," id. at 16809 p 30, yet it found them to
be "a reasonable guide of the costs to wireline, cellular, and
broadband PCS carriers for CALEA compliance," id.
The Commission never explained how its Order would
satisfy CALEA's requirements "by cost-effective methods."
47 U.S.C. s 1006(b)(1). It made no attempt to compare the
cost of implementing the punch list capabilities with the cost
of obtaining the same information through alternative means,
nor did it explain how it measured cost-effectiveness. Al-
though it mentioned residential ratepayers, it never explained
what impact its Order would have on residential telephone
rates. Instead, pointing out that the telecommunications
industry, by ratifying the J-Standard, had agreed to its
implementation cost, the Commission compared the additional
cost of each punch list capability with the total cost of the
J-Standard and then concluded that each additional cost was
"not so exorbitant as to require automatic exclusion of the
capability." Third Report & Order, 14 F.C.C.R. at 16824
p 66, 16828 p 75, 16829-30 p 82, 16832 p 89. But why? The
Commission failed to explain how it decided that implement-
ing the punch list capabilities, which increase J-Standard
costs by more than 45 percent (even by the Commission's
conservative estimates) is "not so exorbitant." Suppose
punch list costs had exceeded J-Standard costs by 90 percent.
Would that have been too "exorbitant"? Asked this question
at oral argument, Commission counsel told us only, "I sup-
pose it is a line-drawing exercise."
The Commission's response to CALEA's cost directives
reflects a classic case of arbitrary and capricious agency
action. Fundamental principles of administrative law require
that agency action be "based on a consideration of the rele-
vant factors," Citizens to Preserve Overton Park, Inc. v.
Volpe, 401 U.S. 402, 416 (1971), and rest on reasoned decision-
making in which "the agency must examine the relevant data
and articulate a satisfactory explanation for its action includ-
ing a rational connection between the facts found and the
choice made," Motor Vehicle Mfrs., 463 U.S. at 43 (internal
quotation marks omitted). Of course, we do not require
"ideal clarity"; we will "uphold a decision ... if the agency's
path may reasonably be discerned." Bowman Transp., Inc.
v. Arkansas-Best Freight System Inc., 419 U.S. 281, 286
(1974). On the record before us, however, we cannot "dis-
cern" how the Commission interpreted "cost-effective," nor
why it considered the substantial costs of the punch list
capabilities to be "not so exorbitant," nor finally what impact
it thought the Order would have on residential ratepayers.
Missing, in other words, is "a rational connection between the
facts found and the choice made." Motor Vehicle Mfrs., 463
U.S. at 43.
The second defect in the Order relates to the Commission's
failure to comply with CALEA's requirement that it "protect
the privacy and security of communications not authorized to
be intercepted," 47 U.S.C. s 1006(b)(2), with respect to post-
cut-through dialed digit extraction. This punch list capability
requires carriers to electronically monitor the communica-
tions channel that carries audible call content in order to
decode all digits dialed after calls are connected or "cut
through." Some post-cut-through dialed digits are telephone
numbers, such as when a subject places a calling card, credit
card, or collect call by first dialing a long-distance carrier
access number and then, after the initial call is "cut through,"
dialing the telephone number of the destination party. Post-
cut-through dialed digits can also represent call content. For
example, subjects calling automated banking services enter
account numbers. When calling voicemail systems, they en-
ter passwords. When calling pagers, they dial digits that
convey actual messages. And when calling pharmacies to
renew prescriptions, they enter prescription numbers.
The government contends that a law enforcement agency
may receive all post-cut-through digits with a pen register
order, subject to CALEA's requirement that the agency uses
"technology reasonably available to it" to avoid processing
digits that are content. 18 U.S.C. s 3121(c). No court has
yet considered that contention, however, and it may be that a
Title III warrant is required to receive all post-cut-through
digits. The Commission therefore had a statutory obligation
to address how its Order, which requires the capability to
provide all dialed digits pursuant to a pen register order,
would "protect the privacy and security of communications
not authorized to be intercepted." 47 U.S.C. s 1006(b)(2).
The Commission spoke of law enforcement's need to obtain
post-cut-through dialed digits and of the cost of providing
them, but it never explained, as CALEA requires, how its
rule will "protect the privacy and security of communications
not authorized to be intercepted."
Several commenters, moreover, suggested ways in which
law enforcement agencies having only pen register orders
could obtain post-cut-through phone numbers while protect-
ing the privacy of call content. The Commission rejected
these alternatives, claiming not that they are technologically
infeasible, but that they "would shift the cost burden from the
originating carrier to the LEA," "could be time-consuming,"
and might burden law enforcement's ability "to conduct elec-
tronic surveillance effectively and efficiently." Third Report
& Order, 14 F.C.C.R. at 16845 p 121. This is an entirely
unsatisfactory response to CALEA's privacy provisions. The
statute requires the Commission to consider more than the
burden on law enforcement--after all, any privacy protections
burden law enforcement to some extent. The Commission's
rules must not only meet CALEA's "assistance capability
requirements," 47 U.S.C. s 1006(b)(1), but also "protect the
privacy and security of communications not authorized to be
intercepted," id. s 1006(b)(2).
The absence of any meaningful consideration of privacy
with respect to dialed digit extraction does not seem to stem
from a failure on the Commission's part to understand the
privacy consequences of its Order. To the contrary, recogniz-
ing that there is no way to distinguish between digits dialed
to route calls and those dialed to communicate information,
the Commission expressed "concern[ ] about ... the privacy
implications of permitting LEAs to access non-call-identifying
digits (such as bank account numbers) with only a pen
register warrant." Third Report & Order, 14 F.C.C.R. at
16846 p 123. Yet the Order requires carriers to make avail-
able all post-cut-through dialed digits--those that convey
content as well as telephone numbers.
Asked at oral argument to point out how the Commission
applied CALEA's privacy mandate to post-cut-through dialed
digits, Commission counsel stated, "we addressed ourselves to
the privacy questions with a little bit of hand wringing and
worrying...." Transcript of Oral Argument at 29. Neither
hand wringing nor worrying can substitute for reasoned
decisionmaking.
For the foregoing reasons, we vacate the portions of the
Commission's Order dealing with the four challenged punch
list capabilities and remand for further proceedings consistent
with this opinion.
Location Information
We reach a different conclusion with respect to the Com-
mission's refusal to remove the antenna tower location infor-
mation capability from the J-Standard. This provision re-
quires carriers to make available the physical location of the
antenna tower that a mobile phone uses to connect at the
beginning and end of a call. Unlike the Commission's adop-
tion of the punch list, its decision with regard to location
information is both reasoned and reasonable.
To begin with, as the Commission observed in the Third
Report & Order, defining "call-identifying information" to
include antenna tower location finds support in
CALEA's text. In particular, section 103(a)(2) provides that
"with regard to information acquired solely pursuant to the
authority for pen registers and trap and trace devices ...
call-identifying information shall not include any information
that may disclose the physical location of the subscriber
(except to the extent that the location may be determined
from the telephone number)." 47 U.S.C. s 1002(a)(2). As we
note above, the Commission read this provision to imply that
location information falls within the definition of call-
identifying information. Section 103(a)(2), the Commission
ruled, "simply imposes upon law enforcement an authorization
requirement different from that minimally necessary for use
of pen registers and trap and trace devices." Third Report &
Order, 14 F.C.C.R. at 16815 p 44. Disagreeing, petitioners
argue that section 103(a)(2) narrows the definition of call-
identifying information and should not be read as an affirma-
tive grant of authority for law enforcement agencies to obtain
location information. As the Commission explained, however,
if "call-identifying information" did not include location infor-
mation, this provision would have no function. See id. at
16815 p 44 & n.95. In reaching this conclusion, the Commis-
sion was simply following the well-accepted principle of statu-
tory construction that requires every provision of a statute to
be given effect. See Washington Market Co. v. Hoffman, 101
U.S. 112, 115-16 (1879) ("We are not at liberty to construe
any statute so as to deny effect to any part of its language.").
The Commission's approach to location information also
finds support in CALEA's use of the word "signaling" in the
definition of "call-identifying information." As the agency
explains in its brief, a mobile phone "sends signals to the
nearest cell site at the start and end of a call. These signals,
which are necessary to achieve communications between the
caller and the party he or she is calling, clearly are 'signaling
information.' Information about the cell sites associated with
mobile calls therefore falls squarely within the statutory
definition of call-identifying information." Brief for Federal
Communications Commission at 38.
Not only did the Commission elucidate the textual basis for
interpreting "call-identifying information" to include location
information, but it also explained how that result comports
with CALEA's goal of preserving the same surveillance capa-
bilities that law enforcement agencies had in POTS (plain old
telephone service). "[I]n the wireline environment," the
Commission explained, law enforcement agencies "have gen-
erally been able to obtain location information routinely from
the telephone number because the telephone number usually
corresponds with location." Third Report & Order, 14
F.C.C.R. at 16816 p 45. In the wireless environment, "the
equivalent location information" is "the location of the cell
sites to which the mobile terminal or handset is connected at
the beginning and at the termination of the call." Id. Ac-
cordingly, the Commission concluded, "[p]rovision of this
particular location information does not appear to expand or
diminish law enforcement's surveillance authority under prior
law applicable to the wireline environment." Id.
The Commission's refusal to remove location information
from the J-Standard, moreover, does not share the other
problems that led us to vacate the punch list portion of the
Third Report & Order. As to cost, location information was
included in the J-Standard adopted by industry, so it is
unaffected by the deficiencies in the Commission's cost analy-
sis. And in contrast to dialed digit extraction, the Commis-
sion's analysis of the location capability did more than just
pay lip service to CALEA's privacy requirements. Most
important, the Commission demonstrated its understanding
that antenna location information could only be obtained with
something more than a pen register order, see id. at 16815
p 44, a point the Justice Department concedes in its brief: "A
pen register order does not by itself provide law enforcement
with authority to obtain location information, and we have
never contended otherwise." Final Brief for the United
States at 19. Expressly relying on CALEA's privacy protec-
tion provisions, moreover, the Commission rejected a New
York Police Department proposal that would have required
triangulating signals from multiple cellular antenna towers to
pinpoint a wireless phone's precise location throughout a call's
duration. See Third Report & Order, 14 F.C.C.R. at 16816
p 46. "[S]uch a capability," the Commission found, "poses
difficulties that could undermine individual privacy." Id.
For these reasons, we deny the petitions for review with
respect to location information.
III
This brings us to petitioners' challenge to the Commission's
decision not to remove the packet-mode data requirement
from the J-Standard. In conventional circuit-mode telecom-
munications, a single circuit is opened between caller and
recipient and all electronic signals that make up the communi-
cation travel along the circuit. In digital packet-switched
networks, communications do not travel along a single path.
Instead, a call is broken into a number of discrete digital data
packets, each traveling independently through the network
along different routes. Data packets are then reassembled in
the proper sequence at the call's destination. Like an envel-
ope, each digital packet has two components: it contains a
portion of the communication message, and it bears an ad-
dress to ensure that it finds its way to the correct destination
and is reassembled in proper sequence. The address infor-
mation appears in the packet's "header." The message with-
in the packet is known as the "body" or "payload." The
J-Standard requires that carriers make available both header
and payload.
Telecommunication carrier petitioners claim that packet
headers (call-identifying information) cannot be separated
from packet bodies or payloads (call content). Accordingly,
they and the privacy petitioners argue that any packet-mode
data provided to a law enforcement agency pursuant to a pen
register order will inevitably include some call content, thus
violating CALEA's privacy protections. The FBI disagrees.
"[A]s a technical matter," it argued before the Commission,
"it is perfectly feasible for a LEA to employ equipment that
distinguishes between a packet's header and its communica-
tions payload and makes only the relevant header information
available for recording or decoding." Third Report & Order,
14 F.C.C.R. at 16818 p 54.
The Commission considered these conflicting views about
the feasibility of separating call content from packet header
data, concluding that "the record is not sufficiently developed
to support any particular technical requirements for packet-
mode communications." Id. at 16817 p 48. At the same time,
the Commission acknowledged that "privacy concerns could
be implicated if carriers were to give to LEAs packets
containing both call-identifying and call content information
when only the former was authorized." Id. Stating that
"further efforts can be made to find ways to better protect
privacy by providing law enforcement only with the informa-
tion to which it is lawfully entitled," the Commission asked
the Telecommunications Industry Association, which devel-
oped the J-Standard, "to study CALEA solutions for packet-
mode technology and report to the Commission in one year
on steps that can be taken, including particular amendments
to [the J-Standard], that will better address privacy con-
cerns." Id. at 16819 p 55. In the meantime, however, finding
the record insufficient to warrant modification of the
J-Standard's packet-mode data provision, the Commission
directed that it be implemented "no later than September 30,
2001." Id. "That date," the Commission explained, "is 15
months after the June 30, 2000 CALEA compliance deadline,
and will afford manufacturers that have not yet developed a
packet-mode capability the time needed to do so." Id. At
the same time, the Commission emphasized that it viewed this
as an interim solution. "We recognize that, in view of the
growing importance of packet-mode communications, a timely
permanent solution is essential. Accordingly, we expect that
TIA will deliver a report to us no later than September 30,
2000 that will detail a permanent solution...." Id. at 16820
p 56.
The Commission's denial of the petitions to remove packet-
mode data from the J-Standard suffers from none of the
shortcomings that undermined its handling of the punch list
capabilities. First, because nobody questions that packet
header information contains "call-identifying information," the
ambiguity of that term's definition does not affect the packet-
mode requirement. Second, as with location information, but
unlike the four punch list capabilities, because the packet-
mode requirement was included in the J-Standard adopted
by industry it is unaffected by the deficiencies in the Commis-
sion's cost analysis. Third, unlike the case of dialed digit
extraction, the Commission thoroughly considered the privacy
implications of packet-mode data and invited further study to
"better address privacy concerns." Id. at 16819 p 55.
Finally, nothing in the Commission's treatment of packet-
mode data requires carriers to turn over call content to law
enforcement agencies absent lawful authorization. Although
the Commission appears to have interpreted the J-Standard
as expanding the authority of law enforcement agencies to
obtain the contents of communications, see id., the Commis-
sion was simply mistaken. All of CALEA's required capabili-
ties are expressly premised on the condition that any infor-
mation will be obtained "pursuant to a court order or other
lawful authorization." 47 U.S.C. s 1002(a)(1)-(3). CALEA
authorizes neither the Commission nor the telecommunica-
tions industry to modify either the evidentiary standards or
procedural safeguards for securing legal authorization to ob-
tain packets from which call content has not been stripped,
nor may the Commission require carriers to provide the
government with information that is "not authorized to be
intercepted." Id. See also Final Brief for the United States
at 4 ("If the government lacks the requisite legal authority to
obtain particular information, nothing in Section 103 obligates
a carrier to provide such information."). Petitioners thus
have no reason to fear that "compliance with the Order will
force carriers to violate their duty under CALEA to 'protect
the privacy and security of communications ... not autho-
rized to be intercepted.' " Final Brief of Petitioners USTA,
CTIA, and CDT at 35. We therefore deny the petition for
review with respect to packet-mode data.
IV
We grant the petitions for review in part, vacate the
provisions of the Third Report & Order dealing with the four
challenged punch list capabilities, and remand to the Commis-
sion for further proceedings consistent with this opinion. In
all other respects, we deny the petitions for review.
So ordered.