Section 107(c) and Section 109(b) Petitions

Communications Assistance for Law Enforcement Act (CALEA)

FCC-06-56A1

Section 107(c) and Section 109(b) Petitions

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Federal Communications Commission

FCC 06-56

Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Communications Assistance for Law
Enforcement Act and Broadband Access and
Services

)
)
)
)
)
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ET Docket No. 04-295
RM-10865

SECOND REPORT AND ORDER AND MEMORANDUM OPINION AND ORDER
Adopted: May 3, 2006

Released: May 12, 2006

By the Commission: Chairman Martin, and Commissioners Copps, Adelstein and Tate issuing separate
statements.
TABLE OF CONTENTS
Paragraph
I. INTRODUCTION .............................................................................................................................................2
II. BACKGROUND ...............................................................................................................................................4
III. DISCUSSION ....................................................................................................................................................6
A. REQUIREMENTS AND SOLUTIONS.................................................................................................7
B. SECTIONS 107(C) AND 109(B) PETITIONS ....................................................................................27
C. ENFORCEMENT OF CALEA .............................................................................................................63
D. COST RECOVERY ISSUES ................................................................................................................69
E. SYSTEM SECURITY REQUIREMENTS..........................................................................................75
F. FUTURE SERVICES AND TECHNOLOGIES..................................................................................77
G. CONSOLIDATION OF CALEA RULES ............................................................................................81
H. MISCELLANEOUS...............................................................................................................................83
IV. PROCEDURAL ISSUES................................................................................................................................84
V. ORDERING CLAUSES..................................................................................................................................89
APPENDIX A – LIST OF COMMENTERS
APPENDIX B – FINAL RULES
APPENDIX C – REGULATORY FLEXIBILITY ANALYSES
APPENDIX D – STANDARDS FOR PACKET-MODE TECHNOLOGIES
APPENDIX E – SECTION 109(B)(1) PETITIONS FOR COST-SHIFTING RELIEF:
FILING INSTRUCTIONS
APPENDIX F – SECTION 107(C) PETITIONS FOR EXTENSION OF TIME:
FILING INSTRUCTIONS
APPENDIX G – SAMPLE MONITORING REPORT (FORM XXX)

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I. INTRODUCTION
1.
In the Second Report and Order (Second R&O), we address several issues regarding
CALEA implementation raised in the Notice of Proposed Rulemaking (Notice) in this proceeding. In
particular, the Second R&O addresses the assistance capabilities required, pursuant to section 103 of the
Communications Assistance for Law Enforcement Act (CALEA),1 for facilities-based broadband Internet
access providers and providers of interconnected Voice over Internet Protocol (VoIP).
Telecommunications industry standard-setting bodies, working in concert with law enforcement agencies
(LEAs) and other interested parties, are developing technical requirements and solutions for these
providers, and we conclude that, absent the filing of a deficiency petition under CALEA section 107(b), it
would be premature for the FCC to intervene in the standards development process. Additionally, we
permit all carriers providing facilities-based broadband Internet access and interconnected VoIP services
until May 14, 2007 to come into compliance with CALEA.2 Further, we require that all carriers
providing facilities-based broadband Internet access and interconnected VoIP service to submit interim
reports to the Commission to ensure that they will be CALEA-compliant by May 14, 2007. We also
require that all facilities-based broadband Internet access and interconnected VoIP providers to whom
CALEA obligations were extended in the First R&O come into compliance with the system security
requirements in our rules within 90 days of the effective date of this Second R&O.
2.
More generally, we herein specify mechanisms to ensure that telecommunications
carriers comply with CALEA. Specifically, under the express terms of the statute, all carriers subject to
CALEA are obliged to become CALEA-compliant. We find that sections 107(c) and 109(b) of CALEA
provide only limited and temporary relief from compliance requirements, and that they are
complementary provisions that serve different purposes, which are, respectively: (1) extension of the
CALEA section 103 compliance deadline for equipment, facility, or service deployed before October 25,
1998; and (2) recovery of CALEA-imposed costs. We also conclude that, in addition to the enforcement
remedies through the courts available to LEAs under CALEA section 108, we may take separate
enforcement action against carriers that fail to comply with CALEA. Moreover, we conclude that carriers
are generally responsible for CALEA development and implementation costs for post-January 1, 1995
equipment and facilities.
3.
In the Memorandum Opinion and Order (MO&O), we deny in part and grant in part a
petition for reconsideration and clarification filed by the United States Telecom Association
(USTelecom). USTelecom requested the Commission to re-set the CALEA compliance deadline for
facilities-based broadband Internet access and interconnected VoIP services from the May 14, 2007 date
established by the First R&O to 18 months from the date of this Second R&O and to clarify the specific
broadband access services subject to the 18-month deadline. We deny USTelecom’s request to re-set the
CALEA compliance deadline for facilities-based broadband Internet access and interconnected VoIP
services, but conclude that the public interest will be best served by applying the existing May 14, 2007

Pub. L. No. 103-414, 108 Stat. 4279 (1994) (codified as amended in sections of 18 U.S.C. and 47 U.S.C.).

This is the same CALEA compliance date established by the First Report and Order (First R&O) in this
proceeding for newly covered entities and providers of newly covered services. See Communications Assistance for
Law Enforcement Act and Broadband Access and Services, First Report and Order and Further Notice of Proposed
Rulemaking, ET Docket No. 04-295, RM-10865, 20 FCC Rcd 14989 (2005).

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CALEA compliance date to all facilities-based broadband Internet access and interconnected VoIP
services.

II. BACKGROUND
4.
In March 2004, the Department of Justice (DOJ), the Federal Bureau of Investigation
(FBI), and the Drug Enforcement Administration (DEA) (collectively, Law Enforcement) filed with the
Commission a petition for expedited rulemaking, requesting that we initiate a proceeding to resolve
various outstanding issues associated with the implementation of CALEA.3 We responded in August
2004 by issuing a Notice of Proposed Rulemaking and Declaratory Ruling in this proceeding.4 The
Notice examined issues relating to the scope of CALEA’s applicability to packet-mode services, such as
broadband Internet access, and implementation and enforcement issues.5
5.
In September 2005, the First R&O concluded that CALEA applies to facilities-based
broadband Internet access providers and providers of interconnected VoIP service,6 and the concurrent
Further Notice of Proposed Rulemaking (Further Notice) sought comment on whether CALEA
obligations should be extended to providers of other types of VoIP services7 and on whether something
less than full CALEA compliance should be required of certain classes or categories of facilities-based
broadband Internet access providers.8 The First R&O stated: “In the coming months, we will release
another order that will address separate questions regarding the assistance capabilities required of the
providers covered by today’s Order pursuant to section 103 of CALEA.9 This subsequent order will
include other important issues under CALEA, such as compliance extensions and exemptions, cost
recovery, identification of future services and entities subject to CALEA, and enforcement.”10 Today’s
Second R&O addresses these questions and issues and specifies what telecommunications providers must
do to facilitate electronic surveillance of their equipment, facilities, and services by LEAs, pursuant to
court orders or other lawful authorization.
III. DISCUSSION
6.
Introduction. In this Second R&O, we first examine the obligations of facilities-based
broadband Internet access and interconnected VoIP providers to implement CALEA compliance solutions
3

Joint Petition for Expedited Rulemaking, RM-10865 (filed Mar. 10, 2004).

See Communications Assistance for Law Enforcement Act and Broadband Access and Services, Notice of
Proposed Rulemaking and Declaratory Ruling, ET Docket No. 04-295, RM-10865, 19 FCC Rcd 15676 (2004).
5

Notice, 19 FCC Rcd at 15677, para. 1.

First R&O, 20 FCC Rcd at 14989, para. 1.

Further Notice, 20 FCC Rcd at 15013, para. 48.

Id. at 15013, para. 49.

47 U.S.C. § 1002.

First R&O, 20 FCC Rcd at 14990, para. 3.

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under section 103 of the statute, including solutions based on either CALEA “safe harbor” standards or
the use of trusted third parties. We next examine the scope of relief available to telecommunications
carriers pursuant to CALEA sections 107(c) and 109(b), issue new guidelines to govern the filing and
evaluation of petitions associated with those rule sections, and dispose of pending section 107(c)
petitions. Third, we address CALEA enforcement issues, both generally and with specific regard to
facilities-based broadband Internet access and interconnected VoIP providers, including the filing of
reports by these providers to ensure their timely compliance with the assistance capability requirements of
CALEA section 103. Fourth, we examine CALEA cost issues and specify cost recovery mechanisms for
wireline, wireless, and other telecommunications carriers. Fifth, we specify a date for facilities-based
broadband Internet access and interconnected VoIP providers to comply with CALEA system security
requirements. Finally, we address the CALEA compliance obligations of providers of future
telecommunications services and technologies.
A.

REQUIREMENTS AND SOLUTIONS

7.
Overview. As we observed in the Notice, packet technologies are fundamentally different
from the circuit switched technologies that were the primary focus of the Commission’s earlier decisions
on CALEA.11 Nonetheless, carriers, manufacturers and Law Enforcement have applied the statutory
definition of call-identifying information (CII) in developing standards or proprietary solutions for packet
technologies. In some cases, however, the exact application of these terms to packet technologies remains
to be determined. For example, CII may be found within several encapsulated layers of protocols, and as a
packet makes its way through the network of the broadband Internet access service provider, these
providers’ equipment generally do not examine or process information in the layers used to control
packet-mode services such as VoIP, and in fact operate at layers below the ones that carry control
information for broadband access services. As a result, broadband Internet access service providers may
not be able to easily isolate CII.12
8.
In this proceeding, we have explored the complexity of the technical issues regarding
packet technologies to ensure that broadband Internet access and VoIP providers can comply with
CALEA and not compromise the ability of LEAs to receive the information to which they are entitled
under the statute. Specifically, as discussed in detail below, we probed the capabilities of broadband
Internet access and VoIP providers to extract CII and provide it to LEAs under CALEA, and inquired
about compliance solutions for these providers based upon either CALEA “safe harbor” standards or the
use of trusted third parties. As we discuss below, the record demonstrates that Law Enforcement and
industry have made progress toward the goal of achieving successful implementation of CALEA with
regard to the deployment of packet technologies by broadband Internet access and VoIP providers, but
this is an ongoing process. Although section 107(b) of CALEA allows the Commission, upon petition, to
establish rules, technical requirements or standards necessary for implementing section 103 if any entity
believes that industry-created requirements or standards are deficient, CALEA clearly provides that LEAs
and industry work together in the first instance to formulate CALEA compliance standards. Accordingly,
we will continue to monitor developments in this area as Law Enforcement and industry continue
working together, primarily through various standards organizations, to develop long-term solutions to
these complex technical issues. We also determine that all carriers providing facilities-based broadband

Notice, 19 FCC Rcd at 15712, para. 63.

Id. at 15712-13, para. 65.

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Internet access and interconnected VoIP services must be in compliance with section 103 of CALEA by
May 14, 2007.
1. CALEA Obligations Under Section 103
9.
Background. Section 103(a)(1) of CALEA requires telecommunications carriers to
establish the capability of providing to LEAs call content information, pursuant to a court order or other
lawful authorization; and section 103(a)(2) of CALEA requires telecommunications carriers to establish
the capability of providing to LEAs reasonably available call-identifying information (CII), pursuant to a
court order or other lawful authorization.13 In this section of the Second R&O, we discuss a carrier’s
obligations under section 103 and compliance solutions as they relate to broadband Internet access and
interconnected VoIP services.
10.
CALEA defines CII 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 carrier,” but CALEA does not
define “origin,” “direction,” “destination,” or “termination.”14 The Commission has adopted definitions
of the component terms (origin, direction, destination, and termination) in the statutory definition of CII
in addressing petitions regarding standards for circuit switched networks in J-STD-025.15 However, as
noted above, packet technologies are substantially different from the circuit switched technologies that
were the primary focus of the Commission’s earlier decisions on CALEA. Accordingly, in the Notice, we
sought comment on whether the Commission should clarify the statutory term “call-identifying
information” for broadband Internet access and VoIP services. We asked commenters to provide specific
suggestions for these definitional issues.16
11.
We also invited comment as to how the Commission should apply the term “reasonably
available” to broadband Internet access.17 We observed that the Commission has previously determined
that information may not be “reasonably” available in circuit switched networks if the information is
accessible only by significantly modifying a network, and further observed that cost concerns are best
addressed as part of a section 107(c) analysis.18 We tentatively concluded that we should apply the same
“reasonably” available criteria to broadband Internet access and VoIP providers; i.e., information may not
be reasonably available to those providers if it is accessible only by significantly modifying their
13

47 U.S.C. § 1002(a)(1), (a)(2).

47 U.S.C. § 1001(2).

See Communications Assistance for Law Enforcement Act, Order on Remand, CC Docket No. 97-213, 17 FCC
Rcd 6896 (2002) at 6911, para. 47. See also 47 C.F.R. §§ 22.1102, 24.902, 64.2202. J-STD-025 was an interim
standard published by the Alliance for Telecommunications Industry Solutions (ATIS) and the Telecommunications
Industry Association (TIA) in December 1997 and was replaced by J-STD-025-A in May 2000. J-STD-025-A
incorporated additions made to J-STD-025 by the Commission in CC Docket No. 97-213; see Third Report and
Order, 14 FCC Rcd 16794 (1999). In December 2003, ATIS and TIA published J-STD-025-B; see
http://www.atis.org/PRESS/pressreleases2004/031904.htm (last visited in May 2006). J-STD-025-B focuses on
refining CALEA packet-mode communications requirements for the interface to the collection equipment of LEAs.
16

Notice, 19 FCC Rcd at 15713, para. 67.

Id.

Id. at 15713-14, para. 67.

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networks. However, we recognized that, when looking at those providers’ service architectures, it is not
always readily apparent where CII is available. Accordingly we sought comment on these related issues,
such as instances in which CII may be reasonably available from either a broadband Internet access
provider or a VoIP provider, but not from both. We stated that, if the information is reasonably available
from both, we would expect that both would have a CALEA obligation with respect to that information
and would work cooperatively with each other and with the LEA to provide the LEA with all required
information.19
12.
Discussion. A number of parties commented generally on the Commission’s authority to
intervene in the development of CALEA technical standards. Cingular notes that the U.S. Court of
Appeals for the District of Columbia Circuit (D.C. Circuit) stated: “. . . Congress gave the
telecommunications industry the first crack at developing standards, authorizing the Commission to alter
those standards only if it found them ‘deficient.’"20 Cingular and many other parties conclude that the
Commission must defer to the efforts of industry standards bodies to formulate standards, absent the filing
of a petition under section 107(b) with the Commission.21
13.
With regard to the availability of CII in broadband access and VoIP networks,
commenters generally agree that different information is available to different service providers, and that
different parts of that information are “reasonably available” to different service providers. However,
several parties identify situations in which, they contend, a broadband Internet access provider would not
reasonably be able to extract CII used by non-affiliated VoIP providers.22 With regard to the
Commission’s tentative conclusion that CII may be reasonably available to a broadband access or VoIP
provider as long as that provider’s network does not have to be significantly modified, some parties argue
that this standard is inappropriate for Internet applications.23 DOJ expresses particular concern about the
Commission using cost considerations to decide what is “reasonably available” because, DOJ asserts, the
Commission could mistakenly excuse an entire class of carriers from delivering a capability, even though
only one or two carriers qualify for such relief based on non-technical considerations.24 However,

Id. at 15714, para. 68.

Cingular Comments at 17, citing USTA v. FCC, 227 F.3d 450,460 (D.C. Cir. 2000).

Cingular Comments at 17. Similarly, USTelecom observes that the CALEA statute calls for the
telecommunications industry to develop a standard in consultation with LEAs, that the Commission becomes
involved in this process only if a deficiency petition is filed, and that the Commission may not simply overturn a
standard, but rather must correct any deficiency. USTelecom Comments at 8-9 citing 47 U.S.C. §1006. BellSouth,
DOJ, and SIA generally concur. BellSouth Comments at 16; DOJ Comments at 41; SIA Comments at 20; SIA
Reply Comments at 13. DOJ, USTelecom, and Verizon also argue that standards bodies and industry groups have
the resources, which the Commission may lack, to determine call-identifying information for multiple technologies.
DOJ Comments at 41; DOJ Reply Comments at 23-24; USTelecom Comments at 9; Verizon Comments at 21;
Verizon Reply Comments at 19-20.

Global Crossing Reply Comments at 9; I&P Comments at 49; NCTA Comments at 11; SIA Comments at 10-11;
TIA Comments at 14; US ISPA Comments at 23, 45.

US ISPA Comments at 20; I&P Comments at 45.

DOJ Comments at 44-48.

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industry commenters strongly disagree with DOJ regarding the exclusion of cost considerations from a
“reasonably available” inquiry.25
14.
We note the D.C. Circuit’s opinion referenced by Cingular, as well as the comments of
both DOJ and the telecommunications industry that express concern about Commission intervention in
the continuing work by Law Enforcement and industry to develop CALEA technical standards for
broadband Internet access and VoIP services. Addressing analogous circumstances, the Court explained
that such intervention “would weaken the major role Congress obviously expected industry to play in
formulating CALEA standards.”26 In the course of developing standards for CALEA compliance by
broadband Internet access and VoIP providers, we expect that industry standard-setting bodies, working
in concert with Law Enforcement and other interested parties, will develop an appropriate definition of
“call-identifying information” in the context of broadband Internet access and VoIP networks as well as
an appropriate definition of what constitutes either “reasonable availability” of CII in such networks or a
“significant modification” of such networks. If this process proves unsatisfactory, any interested party
may submit to the Commission a deficiency petition under CALEA section 107(b).27 We thus take no
action on these issues at this time.28
15.
The First R&O in this proceeding29 established a CALEA compliance date of May 14,
2007 for newly covered entities and providers of newly covered services. USTelecom has asked the
Commission to identify specifically all broadband Internet access services subject to that compliance
date.30 To eliminate any possible confusion about the applicability of that deadline, we conclude that the
public interest will be best served by applying the May 14, 2007 compliance date to all facilities-based
broadband Internet access and interconnected VoIP services. We agree with USTelecom that applying
25

TIA Comments at 15; BellSouth Comments at 22; US ISPA Comments at 20-21.

USTA, 227 F.3d at 461.

47 U.S.C. § 1006(b).

Declining to interpret the statutory definition of “call-identifying information” in this area until industry standardsetting bodies do so in the first instance is consistent with the D.C. Circuit’s decision in USTA. That decision
“turn[ed] on what the Act means by ‘call-identifying information.’” 227 F.3d at 457. Responding to deficiency
petitions challenging an industry standard, the Commission had added several capabilities beyond those required by
that standard (called the “J-Standard”). Id. at 456. The Commission concluded that these additional capabilities
were required by the statutory definition of “call-identifying information,” but the D.C. Circuit held that the
Commission had not provided an adequate explanation for why this was so. Id. at 460. The Court noted that this
failure was “particularly serious in view of CALEA’s unique structure.” Id. The J-Standard had provided an
interpretation of the statutory definition of “call-identifying information,” but the Commission failed to identify any
“deficiencies” in that definition. Id. at 461-62. The Court concluded that this was in error: “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.” Id. at 461. To attempt a
definition of the elements of “call-identifying information” here – without any standard-setting bodies’ definitions
even before us – would be at least as disruptive to the statutory scheme as the approach rejected by the D.C. Circuit
in USTA.

See n.2, supra.

See Petition for Reconsideration and for Clarification of the CALEA Applicability Order, filed by USTelecom in
ET Docket No. 04-295, at 3-5 (Nov. 14, 2005) (USTelecom Petition). A list of parties that filed
oppositions/comments and replies in response to the petition is shown in Appendix A.

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the compliance date uniformly to these services is consistent with the policy objectives identified in the
First R&O.31 We find that applying the same compliance dates to all providers of facilities-based
broadband Internet access and interconnected VoIP services will avoid any skewing effect on competition
and will prevent migration of criminal activity onto networks with delayed compliance dates.
16.
One firm date establishes a clear goal for all carriers, equipment manufacturers, and law
enforcement that must cooperate in the process of identifying, implementing and deploying solutions.
One firm date also should encourage all interested parties to move quickly to develop solutions which, in
turn, will benefit smaller carriers who face greater challenges in complying with CALEA in the absence
of standards and the availability of compliant equipment in the marketplace.32 Thus, we reject
suggestions for different compliance deadlines for VoIP and broadband Internet access services,33 or
linking compliance deadlines to certain events or criteria, such as the development of standards, a
Commission decision that a service provider is subject to CALEA, or carrier size.34
17.
We also find that May 14, 2007 is a reasonable time period for compliance with the
Section 103 requirements.35 We note, at the outset, that VoIP standards for CALEA are nearing or are at
completion for various technologies.36 Thus, manufacturers and carriers are in a good position to
implement and deploy solutions for VoIP by that date, even though we recognize that VoIP providers
who plan a nationwide deployment will need to incorporate a CALEA solution into numerous routers or
servers or negotiate arrangements with numerous interconnecting carriers. We similarly conclude that
providers of broadband Internet access services should be able to comply with Section 103 by May 14,
31

See id. at 4. We note that no commenter on the USTelecom Petition specifically opposed this portion of the
petition.

See, e.g., Global Crossing Reply Comments at 7; GVNW Consulting Comments at 5-6 (equipment vendors will
not negotiate with small carriers to develop a custom solution if they have not developed a solution for a larger
market); Advocacy Reply Comments at 7-8, Southern LINC Reply Comments at 6-7 (small carriers lack market
power and must wait until larger carriers or manufacturers develop solutions). Some suggest that we allow small
carriers more time to come into compliance. See, e.g., Advocacy Reply Comments at 7; Southern LINC Reply
Comments at 6-7 (suggests staggered schedules based on carrier size). Others suggest that we not establish a
compliance deadline for small carriers, allowing them to work out compliance plans with Law Enforcement. See,
e.g., UPLC Reply Comments at 13; United Utilities Reply Comments at 6; Vonage Reply Comments at 6.
33

See, e.g., TIA Comments at 8-9; US ISPA Comments at 36-37; Verint Reply Comments at 16. Note: Verint filed
a document entitled Comments of Verint Systems, Inc.; however, it was filed during the reply comment period, and
so we are treating it as a reply comment.

See, e.g., TIA Comments at 8-9 (supports an 18 month compliance period for content surveillance which would
begin to run from when the FCC adopts final rules on “substantial compliance” or from when the FCC decides a
service is subject to CALEA under the “substantial replacement” provision); SIA Comments at 16-18 (suggests that,
for entities newly subject to CALEA, we require compliance one year from the latest date on which: (1) safe harbor
standards are established that satisfy Section 103 requirements or the date on which the Commission resolves a
deficiency petition filed under Section 107(b), (2) the Attorney General issues a final notice of capacity for the
newly subject service/entity, and (3) the Commission establishes system security and integrity rules for the newly
subject entities).
35

See First Report and Order, 20 FCC Rcd at 15012, para. 46 & n.138.

For example, ATIS standard T1.678 supports surveillance of VoIP in wireline networks using two different call
set-up protocols, and CableLabs’ Packet Cable Electronic Surveillance Specification supports surveillance of VoIP
in cable networks. See Appendix D, infra; see also DOJ Opposition at 7-8.

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2007. Although standards for newer broadband Internet access technologies are yet to be developed,
especially regarding the delivery of CII, we note that full content surveillance has already been addressed
by standards groups for certain older technologies37 and some carriers may be able to rely on “passive”
techniques (e.g., using probes at certain points throughout their network) to implement surveillance.
Other factors should facilitate carrier compliance by that date. For example, some solutions will be
software based, and thus carriers will not necessarily have the burden of deploying new equipment to
come into compliance. Further, facilities-based broadband Internet access and VoIP services interconnect
with the public Internet and public switched telephone network (PSTN), respectively. Thus, broadband
access architectures and protocols are compatible with standards used for the Internet and VoIP
architectures and protocols are compatible with standards used for the PSTN, providing a foundation
upon which CALEA solutions for broadband access and VoIP services can be developed.38
2.

Compliance Solutions Based on CALEA “Safe Harbor” Standards

18.
Background. In the Notice, the Commission invited comment on a variety of industry
standards for packet-mode technologies to determine whether any of these standards are deficient and
thus preclude carriers, manufacturers, and others from relying on them as “safe harbors” in complying
with section 103 of CALEA. We noted that, over the past several years, various organizations have been
developing standards for various types of packet technologies that support a variety of applications used
in both wireline and wireless networks. We stated that these standards could serve, pursuant to section
107(a) of CALEA, as safe harbors for section 103 compliance by telecommunications carriers. Section
107(a) is titled “Safe Harbor” and subsection 107(a)(2) provides: “A telecommunications carrier shall be
found to be in compliance with the assistance capability requirements under section 103, and a
manufacturer of telecommunications transmission or switching equipment or a provider of
telecommunications support services shall be found to be in compliance with section 106, if the carrier,
manufacturer, or support service provider is in compliance with publicly available technical requirements
or standards adopted by an industry association or standard-setting organization, or by the Commission
under subsection (b), to meet the requirements of section 103.”39 We noted that the standards process is
ongoing in several different venues, with some standards already having undergone modification and new
ones under development, and that compliance with a safe harbor standard is not required by CALEA.40
19.
In the Notice, we also noted Law Enforcement’s assessment that packet-mode standards
that have been published are deficient. We stated our belief that underlying this assessment are Law
Enforcement’s assumptions that the definition of CII can be clearly applied to packet networks, that
37

For example, the TIA/ATIS standard J-STD-025 for several different technologies such as X.25 packet service,
ISDN, short message service for cellular and PCS, and various wireless packet-mode data services (e.g., CDMA,
TDMA, and GSM). See again Appendix D, infra.

For all of these reasons, we reject USTelecom’s suggestion that the 18-month compliance period should run from
the date of this Second Report and Order. See USTelecom Petition at 1-3; see also, e.g., 8x8 Comments at 2;
ACLU Comments at 5; CTIA Comments at 1-3; Global Crossing Comments at 2-3; TIA Comments at 4 (all
supporting USTelecom’s Petition in this respect). We find that the May 14, 2007 deadline gives providers of
covered services sufficient time to develop compliance solutions. Moreover, as discussed infra in Section III.B.2.,
any telecommunications carrier that believes compliance with section 103 is not reasonably achievable may seek
relief under section 109(b).
39

47 U.S.C § 1006(a)(2).

Notice, 19 FCC Rcd at 15716, para. 77.

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information so identified is “reasonably available” to the carrier, and that the provision of the information
to LEAs by the carrier is “reasonably achievable.” We further noted that the Telecommunication Industry
Association disagrees with Law Enforcement’s assessment.41 We asked parties to comment on industry
standards for packet-mode technologies in an attempt to determine whether any of these standards are
deficient and thus preclude carriers, manufacturers, and others from relying on them as safe harbors in
complying with section 103. We made clear, however, that we did not intend to inhibit the ongoing work
by standards organizations, carriers, and manufacturers to develop and deploy CALEA-compliant
facilities and services. We recognized that CALEA provides that carriers and others may rely on publicly
available technical requirements or standards adopted by an industry association or standard-setting
organization to meet the requirements of section 103, unless the Commission takes specific action in
response to a petition.42
20.
In the Notice, therefore, we invited comment as to whether there is any need to define
what constitutes publicly available technical requirements or standards adopted by an industry association
or standard-setting organization, and sought comment regarding the appropriateness of available
standards and specifications to be used as safe harbors for packet-mode technologies for purposes of
CALEA. We observed that it appears that any group or organization could publish a set of technical
requirements or standards and claim it to be a safe harbor, and we requested comment on whether we
should define what constitutes publicly available technical requirements or standards adopted by an
industry association or standard setting organization.43 We also sought comment on the appropriate
format to be used for the transmission of CII data to LEAs. We noted that, when broadband telephony
(including VoIP) CII is provided to LEAs, they may have concerns with the format of the electronic
interface used to provide the CII. We requested comment on whether the CII should be converted into a
format preferred by LEAs.44
21.
Discussion. No specific deficiencies in any packet-mode standard were cited by any
commenter. Rather, there was a consensus to allow the standards process to proceed and to resolve issues
with deficiency petitions.45 In fact, both industry commenters and DOJ note the appropriateness of this
process.46 Further, industry commenters observe that Law Enforcement has not filed a deficiency petition
with respect to any packet-mode standard.47 Similarly, with regard to whether the Commission should
seek to determine the industry bodies that are appropriate to generate safe harbor standards, there is broad
41

Id. at 15716, para. 78.

Id. at 15717, para. 79.

Id. at 15717, para. 80.

Id. at 15718-19, para. 84.

DOJ Comments at 43; SBC Comments at 20-21; US ISPA Reply Comments at 3; Level 3 Reply Comments at 56; TIA Comments at 13; and Cingular Comments at 17.

BellSouth Comments at 16 (stating that “the Commission should leave technical issues … to the standards
process”); USTelecom Comments at 8 (stating that “As CALEA envisioned, it is only through collaboration that an
industry standard can be adopted;” Verizon Reply Comments at 3 (“arguing that the standards process is the best
forum to resolve complex technical issues”); DOJ Reply Comments at 24 (stating that “the proper way to resolve
section 103 technical capability issues under CALEA is through the standard-setting process and deficiency
petitions.”

Cingular Comments at 17; SBC Comments at 21.

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consensus in the record that we should not.48 Finally, with regard to the issue of the format of CII to be
provided to LEAs, there was a difference of opinion among commenters as to whether a single format is
appropriate,49 but no one recommended that the Commission determine this issue in advance of industry.
22.
Consistent with a broad range of comments, we find that it would be premature for the
Commission to pre-empt the ongoing industry process to develop additional standards for packet-mode
technologies. We believe that industry organizations, whose meetings are generally open to all interested
parties – including LEAs – can best develop those standards, just as they previously developed circuit
switched standards. Further, given the diversity of technologies supporting communications services and
the breadth of organizations involved both domestically and internationally in developing packet-mode
standards, we find it both infeasible and inappropriate to specify the organizations qualified to develop
standards that may be used as “safe harbors.” Finally, we find no reason to become involved at this time
in the technically complex issue of determining the appropriate format to be used for the transmission of
broadband CII data to LEAs. Rather, for all of these technical issues, we find that the industry standards
process remains the preferred forum. We note again, however, to the extent that any party perceives a
problem with an industry developed packet-mode standard, it may file with the Commission a deficiency
petition under section 107(b) of CALEA.
3. Compliance Solutions Based on a Trusted Third Party
23.
Background. In the Notice, we sought comment on the feasibility of using a trusted third
party (TTP) approach to extract CII and content from packets.50 Under this approach, a TTP would
operate a service bureau with a system that has access to a carrier’s network equipment and remotely
manage the intercept process for the carrier.51 We noted that the TTP could either rely on a mediation
device to collect separated call content and CII from various points in the carrier’s network and deliver
the appropriate information to a LEA, or could rely on an external system to collect combined call content
and CII and deliver appropriate information to the LEA.52 In the Notice, we focused on the external
system approach which, we noted, could analyze the combined information and provide the LEA only
that information to which it is entitled.53 We sought comment on whether an external system would be an
efficient method to extract information from packets. We stated that external systems might provide
48

DOJ Comments at 43 (stating the Commission should permit any generally recognized industry association or
standard setting boding to produce a CALEA standard); Sprint Reply Comments at 3 (“if any LEA believes that any
organization is not qualified under CALEA to develop “safe harbor” standards, that LEA can raise the issue in a
Section 107(b) industry petition.”); SIA Comments at 15 (stating that the statute places no limitations on the
definition of “industry association” or “standard-setting organization” and that the FCC may not exceed the
authority delegated by Congress.).

Cingular Comments at 21 (“There is no obligation under CALEA, however, that carriers convert all information
into J-STD-025 format”); Motorola Comments at 19 (“The carrier cannot be required to deliver the information or
content in a code format that is different than the code format selected by the carrier for its system, so long as the
format is capable of being transmitted to law enforcement.”) However, two parties stated that some format
standards were appropriate: I&P Comments at 49; Verint Reply Comments at 11.

Notice, 19 FCC Rcd at 15715, para. 72.

Id. at 15714, para. 69.

Id. at 15714, para. 70.

Id. at 15715, para. 71.

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economies of scale for small carriers, and asked about the approximate relative costs of internal versus
external systems for packet extraction.54
24.
We recognized that tension could develop between relying on a TTP model and relying
on safe harbor standards. For example, we inquired whether, if a TTP approach makes CII “reasonably”
available to a telecommunications carrier, a standard that allows a carrier to provide only the information
it uses to process a packet should be considered a safe harbor if a LEA would not have all call-identifying
information for the communication.55 We also recognized that reliance on a TTP might shift the burden
now shared by carriers and manufacturers in complying with CALEA.56 We noted that the financial
responsibility for funding a TTP approach could follow several models: the TTP could be owned by the
packet service provider or a LEA, or it could be an independent surveillance service provider who
contracts with individual carriers.57 Finally, we sought comment on how a telecommunications carrier
that relies on a TTP would meet its obligations under section 103(a) of CALEA to protect the privacy and
security of communications and CII not authorized to be intercepted, as well as to protect information
regarding the government’s interception of communications and access to CII.58
25.
Discussion. Commenters agree that use of a TTP should be an option available to
broadband access and VoIP providers.59 Some contend that a TTP approach will result in cost savings,60
while others express skepticism that this approach will be more cost-effective than an in-house
approach.61 DOJ expresses concern that the use of TTPs by service providers may diminish providers’
incentives to find cost-effective intercept solutions and that providers could attempt to use TTPs to shift
their CALEA financial responsibilities to LEAs.62 However, SBC asserts that LEAs are required to
compensate service providers for certain surveillance costs, irrespective of whether those providers
choose to use a TTP.63 Regarding the use of TTP capabilities to determine which features of a carrier’s
packet network are reasonably available for standards purposes, DOJ and many industry commenters
54

Id. at 15715, para. 72.

Id. at 15715, para. 73.

Id. at 15715, para. 74.

Id. at 15716, para. 75.

Id. at 15716, para. 76.

BellSouth Comments at 43; DOJ Comments at vi, 49; I&P Comments at 51; Level 3 Comments at 6-7; Nextel
Comments at 8; RCA Comments at 4-5; SBC Comments at 18; US ISPA Comments at 27; Verizon Comments at
23; DOJ Reply Comments at 27-28; Fiducianet Reply Comments at 3; NCTA Reply Comments at 7; Southern
LINC Reply Comments at 13; UPLC Reply Comments at 14-15; US ISPA Reply Comments at 7-8; Verizon
Reply Comments at 20-21; Verint Reply Comments at 8.

VeriSign Comments at 17.

I&P Comments at 51; STC Comments at 2-3; UPLC Reply Comments at 14-15; Level 3 Comments at 6-7; Verint
Reply Comments at 8; RTP Comments at 12.

DOJ Comments at 51; DOJ Reply Comments at 32-34.

SBC Comments at 18-19. SBC also refers to the Omnibus Crime Control and Safe Streets Act (OCCSSA),
18 U.S.C. §§ 2510-2522, especially 18 U.S.C. § 2518(4), which says, “Any provider of wire or electronic
communication service, landlord, custodian or other person furnishing such facilities or technical assistance shall be
compensated therefor by the applicant for reasonable expenses incurred in providing such facilities or assistance.”

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agree that those capabilities should not determine reasonable availability.64 Some parties express privacy
concerns about TTPs;65 however, others note that there are privacy obligations on carriers due to statutes
other than CALEA, and that TTPs already deal with customer-private data, including information needed
to support customer billing and to control Internet spam.66
26.
The record indicates that TTPs are available to provide a variety of services for CALEA
compliance to carriers, including processing requests for intercepts, conducting electronic surveillance,
and delivering relevant information to LEAs. Given the effectively unanimous view of commenters that
the use of TTPs should be permitted but not required, we conclude that TTPs may provide a reasonable
means for carriers to comply with CALEA, especially broadband access and VoIP providers and smaller
carriers. We emphasize, however, that if a carrier chooses to use a TTP, that carrier remains responsible
for ensuring the timely delivery of CII and call content information to a LEA and for protecting
subscriber privacy, as required by CALEA. Thus, a carrier must be satisfied that the TTP's processes
allow the carrier to meet its obligations without compromising the integrity of the intercept.67 Carriers
will not be relieved of their CALEA obligations by asserting that a TTP's processes prevented them from
complying with CALEA. We note DOJ’s concern about carriers attempting to use TTPs to shift costs to
LEAs, but we make no decision here that would allow carriers who choose to use a TTP to shift the
financial responsibility for CALEA compliance to the Attorney General under Section 109 (see
discussion on cost recovery, infra). We will evaluate whether the availability of a TTP makes callidentifying information “reasonably” available to a carrier within the context of section 103 in acting on a
section 109 petition that a carrier may file (see discussion on section 109 petitions, infra). As noted by
several commenters, telecommunications carriers and manufacturers have legally-mandated privacy
obligations, and we take no action herein to modify those obligations based on potential broadband access
and VoIP provider use of TTPs.68 Finally, in accord with the consensus of comments, we will defer to
standards organizations and industry associations and allow them to determine the degree to which the
ability of a TTP external system to extract and isolate CII makes that information reasonably available for
purposes of defining CALEA standards and safe harbors.
B.

SECTIONS 107(C) AND 109(B) PETITIONS

27.
In this section of the Second Report and Order, we address the scope of relief available to
telecommunications carriers pursuant to CALEA sections 107(c)(2) and 109(b); clarify guidelines to
64

DOJ Comments at 50; Motorola Comments at 19; Nextel Comments at 8; NTCA Comments at 6; TIA Comments
at 19; US ISPA Comments at 28-29; Verizon Comments at 25; US ISPA Reply Comments at 8.

ACLU Comments at 9; EFF Comments at 26; TCA Comments at 3; US ISPA Comments at 28.

Cingular Comments at 20; Fiducianet Reply Comments at 8; VeriSign Reply Comments at 16.

We note, however, that a carrier’s independent determination in the first instance that compliance through a TTP
would not compromise the integrity of an intercept is neither controlling on the Commission on the issue of
compliance with the carrier’s CALEA obligations nor dispositive of compliance with any specific requirements
imposed by a court authorizing an interception or electronic surveillance pursuant to Titles 18 or 50 of the United
States Code.

We note that the evolution and structure of the TTP industry is still ongoing. As a result, we recognize that there
may be heretofore unknown circumstances in which additional or special privacy or security measures may be
warranted (e.g. in the case of a foreign owned or controlled TTP) and which may necessitate further Commission
action in this area.

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govern the filing and evaluation of petitions filed under these two sections; and dispose of pending
section 107(c)(2) petitions. As discussed below, under the express terms of the statute, all
telecommunications carriers subject to CALEA must comply with its mandate. Sections 107(c) and
109(b) provide only limited and temporary relief from CALEA compliance requirements; they are
“complementary provisions that serve different purposes.”69
28.
Due to the time limitations set forth in the CALEA statute, telecommunications carriers
may not use section 107(c)(1) to obtain extensions of the compliance deadline in connection with most
packet services.70 We find that it would be inconsistent with the express time limitations of section
107(c) for the Commission to grant 107(c) extension relief to equipment, facilities or services deployed
after the effective date of CALEA pursuant to other CALEA provisions, section 229 of the
Communications Act, or section 706 of the Telecommunications Act of 1996. We also find that, to obtain
section 109(b)(1) relief, in connection with a given assistance capability requirement under section 103, a
telecommunications carrier must demonstrate that it undertook active and sustained efforts to come into
compliance with that requirement, and that compliance could not reasonably be achieved without
“significant difficulty or expense.”71 As a result, telecommunications carriers filing section 109(b)
petitions face a high burden to obtain relief.
29.
In the case of packet-mode compliance requirements addressed in this Second Report and
Order, we expect that telecommunications carriers will work diligently until the end of the 18-month
69

See Notice, 19 FCC Rcd at 15724, para. 96.

Most packet-mode technologies were deployed after section 107(c)(1)’s expiration date, October 25, 1998.
Section 107(c)(1) provides, “A telecommunications carrier proposing to install or deploy, or having installed or
deployed, any equipment, facility, or service prior to the effective date of section 1002 [October 25, 1998] of this
title may petition the Commission for 1 or more extensions of the deadline for complying with the capability
requirements under section 1002 of this title.” 47 U.S.C. § 1006(c)(1); CALEA § 108 (emphasis added). Section
1002 sets forth the CALEA compliance requirements. 47 U.S.C. § 1002; CALEA § 103.
71

See 47 U.S.C. § 1008(b)(1); CALEA § 109(b)(1). A telecommunications carrier may demonstrate that
compliance is not “reasonably achievable” if the Commission determines that compliance would impose a
“significant difficulty or expense” on the “carrier or on the users of the carrier’s systems.” Id. In making this
determination, the Commission considers the following factors: (1) the effect on public safety and national security;
(2) the effect on rates for basic residential telephone service; (3) the need to protect the privacy and security of
communications not authorized to be intercepted; (4) the need to achieve the capability assistance requirements of
section 103 by cost-effective methods; (5) the effect on the nature and cost of the equipment, facility, or service at
issue; (6) the effect on the operation of the equipment, facility, or service at issue; (7) the policy of the United States
to encourage the provision of new technologies and services to the public; (8) the financial resources of the
telecommunications carrier; (9) the effect on competition in the provision of telecommunications services; (10) the
extent to which the design and development of the equipment, facility, or service was initiated before January 1,
1995; and (11) such other factors as the Commission determines are appropriate. Id.
If the Commission finds that compliance is not reasonably achievable and grants a section 109(b)(1) petition, then
the telecommunications carrier need not pay the costs of coming into CALEA compliance. However, upon
receiving section 109(b)(1) favorable ruling, the telecommunications carrier must apply to the Attorney General,
who may agree, subject to the availability of appropriations, to pay that telecommunications carrier for the
additional reasonable costs of making compliance with the capability requirements reasonably achievable. 47 U.S.C.
§ 1008(b)(2)(A); CALEA § 109(b)(2)(A). If the Attorney General does not agree to pay such costs, that
telecommunications carrier shall be deemed to be in compliance with the capability requirements. 47 U.S.C.
§ 1008(b)(2)(B); CALEA § 109(b)(2)(B).

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compliance period, established in the First Report and Order, to implement an appropriate packet-mode
CALEA solution. Once the compliance period expires, telecommunications carriers seeking relief
pursuant to section 109(b) will be expected to document the efforts they undertook throughout the
18-month compliance period to achieve CALEA compliance and to demonstrate how the solution for
which they wish to receive cost recovery relief constitutes a “significant difficulty or expense.” Because
section 109(b) is not a compliance extension device, however, the filing of a section 109(b) petition will
not, by itself, toll the compliance date.
30.

Specifically, in this section, we find that:

Section 107(c)(1) may not be used by telecommunications carriers seeking extensions for
equipment, facilities, and services (hereinafter “facilities”) deployed on or after October
25, 1998 (the effective date of the CALEA section 103 and 105 requirements).

Section 109(b)(1) does not itself authorize the Commission to grant a
telecommunications carrier an extension of the CALEA compliance deadlines.

Section 109(b)(1) imposes a high burden of proof for telecommunications carriers to
demonstrate that they made reasonable efforts to develop CALEA solutions and that none
of them are reasonably achievable. In the absence of CALEA compliance standards or
industry solutions, a petitioner must demonstrate that it exercised a high degree of due
diligence in order to develop its own solution, but was unable to implement this solution
because of a “significant difficulty or expense.”

Office of Management and Budget (OMB) approval of the paperwork collection
requirements of this Second Report and Order is required. Once approval is received, we
will issue a public notice setting forth a deadline that will require all telecommunications
carriers who have pending section 107(c)(1) petitions currently on file with the
Commission to inform the Commission whether, pursuant to our actions taken here, such
petitions concern “equipment, facilities, or services” deployed prior to October 25, 1998.

Once OMB approval is received, we will issue a public notice setting forth a deadline that
will require all telecommunications carriers providing facilities-based broadband Internet
access or interconnected VoIP services to file monitoring reports with the Commission
that briefly describe steps that they are taking to come into compliance with CALEA
section 103. We also will issue a public notice to notify carriers of OMB approval of
paperwork collection requirements for filing petitions under sections 107(c) and 109(b).
1.

Section 107(c)(1) Relief
a.

Section 107(c)(1) Does Not Apply to Any Equipment, Facility, or
Service Deployed On or After October 25, 1998

31.
We adopt our tentative conclusion that section 107(c)(1)’s unambiguous language
expressly limits extensions to cases where the petitioning telecommunications carrier proposes to install
or deploy, or has installed or deployed, its “‘equipment, facility, or service prior to the effective date of

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section 103 …,’72 i.e., prior to October 25, 1998.”73 Given this limitation, a section 107(c) extension is
not available to cover equipment, facilities, or services installed or deployed on or after October 25, 1998.
Commenters failed to present any other reasonable way to read this section, and we reject arguments by
commenters that the Commission should nonetheless ignore Congress’s limited grant of authority to
entertain CALEA extension petitions and look to other statutes for authority to grant extensions for
facilities deployed after Congress’s cut-off date.
32.
We reject commenters’ argument that the Commission could entertain extension petitions
pursuant to statutes other than section 107(c), including CALEA section 109(b)(1) and section 706 of the
Telecommunications Act of 1996. 74 While we agree that section 107(c)(1) does not appear to prohibit the
Commission from exercising authority under another statute, we find it unlikely that Congress intended
the Commission to do so. The language of section 107(c)(1) is very specific as to what equipment,
facilities, and services are covered. Congress determined that, effective October 25, 1998,
telecommunications carriers should incorporate a CALEA compliance plan into the design of any new
facilities deployments in so far as they are not exempt from CALEA.75 To the extent that, in hindsight,
after exercising due diligence, a specific CALEA compliance plan was not reasonably achievable due to a
“significant expense” or “significant harm,”76 telecommunications carriers could then seek relief pursuant
to section 109(b)(1). Therefore, in designing sections 107(c)(1) and 109(b)(1), Congress appears to have
balanced carefully what it found to be a reasonable compliance period against a firm deadline for CALEA
compliance. If Congress had intended for the Commission to continue granting extension petitions after
October 25, 1998, we find it unlikely that Congress would have placed the time limitations in section
107(c)(1).
33.
To interpret other statutes to grant the Commission CALEA extension authority would
undermine Congress’s intent that, after a reasonable compliance period, all telecommunications carriers
would comply with their lawful CALEA obligations. Thus, we reject commenters’ arguments that
CALEA section 109(b)(1), section 706 of the Telecommunications Act of 1996, and section 229(a) of the
Communications Act provide the Commission with authority to grant extension petitions for facilities
deployed on or after October 25, 1998. First, although we believe that the Commission has broad
discretion under CALEA section 109(b)(1)(K) to impose conditions on relief granted by that section, we
disagree with Global Crossing that the Commission should use that section to grant extension relief given

See 47 U.S.C. § 1006(c)(1); CALEA § 107(c)(1) (emphasis added).

Notice, 19 FCC Rcd at 15725, para. 97.

Cingular Comments at 23; Nextel Comments at 10-11; SBC Reply Comments at 6-7. These commenters argue
that the language of section 107(c)(1) does not expressly preclude the Commission from exercising extension
authority pursuant to other statutes.

See, e.g., First Report and Order at para. 38 (noting that a facilities-based broadband Internet service provider
continues to have no CALEA obligation with respect to, for example, the storage functions of its email service, its
web-hosting and DNS lookup functions or any other ISP functionality of its Internet access service).
Telecommunications carriers may petition the Commission for a ruling on whether certain facilities or services are
subject to CALEA (see discussion on future services and technologies, paras. 77-80, infra).

47 U.S.C. § 1008(b)(1); CALEA § 109(b)(1). A telecommunications carrier may demonstrate that compliance is
not “reasonable achievable” if the Commission determines that compliance would impose a “significant difficulty or
expense” on the “carrier or on the users of the carrier’s systems.” Id.

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the express limitation in section 107(c)(1).77 Second, we disagree with OPASTCO78 that the Commission
should employ section 706 as overriding statutory authority, because we find that section 706’s directive
that the Commission encourage the deployment of “advanced telecommunications capability”79 is
consistent with a criterion that the Commission must examine in a section 109(b)(1) petition.80 Because
section 109(b)(1) directs the Commission to balance this one policy objective against 10 other factors, we
decline to rely solely on one factor to the exclusion of all others. Third, we disagree with commenters
who argue that the Commission has broad authority to entertain extension petitions under section 229(a)
of the Communications Act,81 which is the provision that grants the Commission authority to implement
CALEA. We believe that, where Congress has specifically limited Commission extension authority in the
CALEA statute itself, it would be inappropriate to employ section 229(a) to nevertheless find this
authority.82
b.

Contents of Section 107(c)(1) Petitions

34.
We note that participation in the FBI’s Flexible Deployment Program has permitted even
small and rural telecommunications carriers to work with LEAs to develop circuit-mode CALEA
compliance solutions.83 Packet-mode telecommunications carriers, however, are still in a much earlier
stage of CALEA deployment. Our finding today that section 107(c)(1) is not available for facilities
deployed on or after October 25, 1998 will compel most of these telecommunications carriers to
implement CALEA compliant solutions. To the extent that telecommunications carriers deployed packetmode facilities prior to this date, we expect those telecommunications carriers to follow the guidelines set
forth below for section 107(c)(1) petitions.
35.
Telecommunications carriers that deployed circuit-mode facilities prior to October 25,
1998. For this class of telecommunications carriers, we adopt the Notice’s proposal that petitions contain
(1) an explanation for why an extension is necessary, (2) a compliance plan setting forth specific dates for
compliance no later than two years after the petition’s filing date,84 (3) a description of petitioner’s “due

See Global Crossing Comments at 14 (arguing that this approach will uphold Congress’ intent that
telecommunications carriers deploy advanced facilities until CALEA solutions are developed and until the
Commission has had an opportunity to review these new facilities).

OPASTCO Comments at 4 (arguing that, if extensions of time are not granted, new technology will not be
deployed).

Section 706 (“The Commission… shall encourage the deployment… of advance telecommunications capability…
by utilizing… regulating methods that remove barriers to infrastructure investment.”).

In deciding whether to grant a section 109(b)(1) petition, the Commission must weigh “[t]he policy of the United
States to encourage the provision of new technologies and services to the public.” Section 109(b)(1)(G).

47 U.S.C. § 229(a) (“The Commission shall prescribe such rules as are necessary to implement the requirements
of the Communications Assistance for Law Enforcement Act.”).

See Nextel Comments at 10-11; CTIA Comments at 6; OPATSCO Comments at 4 (arguing for relief for rural
carriers).

As noted in the Notice, the Commission has on file approximately 300 section 107(c)(1) petitions. This is almost
600 fewer than the number of petitions that we had on file in 2003.

Section 107(c)(2) permits the Commission to grant extensions of only two years.

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diligence” attempts to become CALEA compliant since June 30, 2002,85 and (4) information satisfying
the information requests attached in Appendix F to this Second Report and Order.86 Such information
will enable us to better evaluate whether a telecommunications carrier merits an extension. We decline to
adopt our tentative proposal that a circuit-mode telecommunications carrier that participates in the FBI’s
Flexible Deployment Program should be deemed de jure to meet the section 107(c)(1) standard. Upon
consideration of its comments, we agree with DOJ that section 107(c) requires more than enrollment in
Flex Deployment.87 We will consider enrollment plus the other items included in our instructions in
determining whether section 107(c) relief is appropriate.88 As in the past, upon the filing of a section
107(c)(1) petition, we will continue to grant a provisional extension for a period of two years unless or
until we issue an order that states otherwise.
36.
We reject assertions that our section 107(c)(1) approach is overly burdensome.89 We
interpret section 107(c)(1) so that telecommunications carriers may minimize the statutory burden
themselves if they proactively seek CALEA solutions. Commenters argue that telecommunications
carriers, especially small ones, face particular challenges, including, for example, lack of clout to
negotiate with manufacturers and lack of resources.90 We find that section 107(c) allows us to take into
account the particular situation of a telecommunications carrier, including its bargaining power and
financial resources, when analyzing whether CALEA compliance is “not reasonably achievable through
application of technology available within the compliance period.”
37.
Telecommunications carriers that deployed packet-mode facilities prior to October 25,
1998. We adopt the Notice’s proposal that, to obtain an extension of time, a packet mode
telecommunications carrier must provide documentation setting forth (1) an explanation why an extension
of time is necessary, (2) a compliance plan including specific dates for compliance no later than two years
after the petition’s filing date, (3) a description of petitioner’s “due diligence” attempts to become
CALEA compliant since November 19, 2001, i.e., the date mandated for packet-mode CALEA
compliance by the Commission’s September 28, 2001 Public Notice,91 and (4) information satisfying the

The Notice proposed that “description should include a documented recital of negotiations with equipment
manufacturers and third-party CALEA service providers, or other persuasive evidence that the petitioner actively
and diligently searched for available CALEA-compliant solutions. Regarding petitioner showings about costs
associated with circuit-mode CALEA compliance, we expect that parties will submit detailed and specific
information, and we direct parties’ attention to the discussion in the Second R&O, including our determination that
costs not directly related to CALEA compliance may not be included.” Notice, 19 FCC Rcd at 15723, para. 93.

In the Notice, we proposed that petitioners provide information that conformed to Exhibit E to that document. In
order to better reflect the record and the analysis produced in this proceeding, we have refined that exhibit and
created filing instructions to better guide section 107(c)(2) petitioners in Appendix F, infra.

See DOJ Comments at 61.

See again Appendix F, infra.

See, e.g., NTCA Comments at 6-7; RTG Comments at 2-3; Advocacy Reply Comments at 7-8; CTIA Reply
Comments at 4.
90

See, e.g., NTCA Comments at 8; RTG Comments at 6; Advocacy Reply Comments at 6; USTelecom Comments
at 14.
91

The Notice tentatively concluded that this description must include “a documented recital of negotiations with
equipment manufacturers and third-party CALEA service providers, or other persuasive evidence that the petitioner
Footnote continued on the next page.

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information requests attached in Appendix F hereto.92 Other than arguments of burden, which we discuss
above, commenters failed to provide convincing evidence or arguments to show why the Commission
should depart from its proposal in the Notice.
2.

Section 109(b)(1) Relief

38.
In this section, we affirm the Notice’s tentative conclusions that “Congress anticipated
that section 109(b)(1) would be used in extraordinary cases by telecommunications carriers facing
particularly high CALEA-related costs and difficulties.”93 We first describe below the scope of relief
granted under section 109(b)(1) and its relationship to other CALEA provisions. Second, we find that a
petitioner must meet a high burden of proof to satisfy section 109(b)(1) and may not use the absence of
available solutions as the sole basis for section 109(b)(1) relief. Third, we find that a petitioner must
exercise due diligence to present a specific solution or a pathway designed to reach a specific solution.
Finally, we explain how we will weigh section 109(b)(1)’s eleven factors in evaluating a petition.
a.

Scope of Section 109(b)(1) Relief and Its Relationship To Other
CALEA Sections

39.
Section 109(b)(1) relief shifts the burden of paying for a specific CALEA solution to DOJ.
Section 109(b)(1) is a mechanism for a telecommunications carrier to recover CALEA compliance costs
from DOJ if the telecommunications carrier can demonstrate that compliance with CALEA capability
requirements is not “reasonably achievable.” Section 109(b)(1) defines “reasonably achievable” to mean
that compliance would impose a “significant difficulty or expense” on the telecommunications carrier.94
If the Commission grants a section 109(b)(1) petition, the only relief that a telecommunications carrier
receives is the following: the telecommunications carrier may, pursuant to section 109(b)(2)(A), request
DOJ to pay for the additional reasonable costs for making CALEA compliance reasonably achievable.
DOJ may then agree to pay for these costs. If DOJ declines to pay for these costs, then the
telecommunications carrier “shall be deemed to be in compliance” with the capability requirements for
the equipment, facilities, and/or services that were the subject of the section 109(b)(1) petition.95
40.
Section 109(b)(1) neither compels a telecommunications carrier to adopt a specific
CALEA solution nor requires DOJ to pay for the telecommunications carrier’s preferred solution. As
discussed above, under section 103, a telecommunications carrier is entitled to implement whatever
solution it believes best suits its network needs.96 However, to recover costs from DOJ, a
actively and diligently searched for available CALEA-compliant solutions since November 19, 2001.” Notice,
19 FCC Rcd at 15727-28, para. 103.
92

In the Notice, we proposed that petitioners provide information that conformed to Exhibit F to that document. In
order to better reflect the record and the analysis produced in this proceeding, we have refined that exhibit and
created filing instructions to better guide section 107(c)(2) petitioners in Appendix F to this Second R&O and
MO&O.

Notice, 19 FCC Rcd at 15728, para. 104.

Id. at 15685, para. 19 (“Section 109 of CALEA addresses the payment of costs by the Attorney General to
telecommunications carriers who comply with the capability requirements of section 103.”).

47 U.S.C. § 1008(b)(2)(B).

47 U.S.C. § 1002(b)(1).

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telecommunications carrier must satisfy the obligations set forth in section 109(b)(1). This means that the
telecommunications carrier must demonstrate that compliance would impose a significant difficulty or
expense.97 If there is a reasonable means of compliance available, even if it is not the telecommunications
carrier’s preferred solution, then the Commission may find that a less expensive, alternative solution
would not impose a significant difficulty or expense and deny the petition. Section 109(b)(1) makes no
reference to the solution preferences of a telecommunications carrier – rather it focuses on whether
compliance with section 103 would impose a “significant difficulty or expense.” A telecommunications
carrier that fails to make this showing may not request payment from DOJ. If, on the other hand, the
Commission finds that compliance is not reasonably achievable within the meaning of section 109(b),
DOJ has the option to pay the appropriate costs of whatever compliance solutions DOJ deems
appropriate.
41.
Section 109(b)(1) relief terminates when the equipment, facilities or services undergo a
substantial replacement, modification or upgrade. As discussed in more detail below, a section 109(b)(1)
petition must explain with specificity the equipment, facility, or service for which the petitioner seeks
relief.98 The Commission’s order granting section 109(b)(1) relief will specify what equipment, facility,
and/or service is covered by the order. Once that equipment, facility, or service is replaced, significantly
upgraded or otherwise undergoes major modification, the carrier is no longer relieved of its CALEA
obligations and the replacement must comply with section 103.99 To obtain section 109(b)(1) relief for
the modified equipment, the telecommunications carrier would have to file a new 109(b)(1) petition.100
42.
Section 109(b)(1) relief does not include extensions of time. Section 109(b)(1) is a cost
recovery vehicle. Section 107(c)(1) is the CALEA provision that addresses extensions of time. As
discussed in Section III.B.1, supra, Congress determined that telecommunications carriers cannot seek
extension relief for facilities deployed on or after October 25, 1998.

The Section 109(b)(1) Burden of Proof

This is explained in further detail in section III.B.2.b, infra.

47 U.S.C. § 1008(b)(1) (determination of “reasonably achievable” is made with regard to the telecommunications
carrier’s particular “equipment, facility, or service”).

Compare CALEA section 109(d), 47 U.S.C. § 1008(d) (applying this standard to equipment, facilities, and
services deployed on or before January 1, 1995); see also Notice, 19 FCC Rcd 15680-81, para. 10 (describing
standard). We note that the FBI began a rulemaking in 1998 seeking to define “significant upgrade or major
modification” and other CALEA terms. Notice, 19 FCC Rcd at 15685-86, para. 19 (citing 63 Fed. Reg. 23, 231
(1998); 66 Fed. Reg. 50931 (2001)).

100

Section 109(b)(1) relief may also be terminated with regard to equipment, facilities or services in advance of a
substantial replacement, modification or upgrade. We note that section 109(b)(1) does not foreclose the
Commission’s consideration and grant of an interested party’s subsequent petition based on a change in the
circumstances underlying a section 109(b)(1) determination that compliance is not reasonably achievable.
Moreover, as the Commission stated in the Notice, we do not interpret section 109(b)(1) to provide a permanent
exemption from the CALEA section 103 compliance mandate. See Notice, 19 FCC Rcd at 15726, para. 99. Thus,
the Commission may time-limit or otherwise condition a carrier’s section 109(b)(1) relief based on facts known to
the Commission at the time such relief is granted.

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43.
We affirm the Notice’s tentative conclusion that a telecommunications carrier faces a
high burden of proof in order to be relieved of its obligations to pay for CALEA compliance.101
Specifically, section 109(b)(1) requires a petitioner to demonstrate, with respect to each section 103
assistance capability requirement for which it seeks relief, that it has examined all possible solutions and
that all of these solutions would impose a significant difficulty or expense on the petitioner. This means
that if the Commission is aware of a CALEA solution that the telecommunications carrier has not
explored and covered in its petition, the Commission will likely dismiss the section 109(b)(1) petition as
prima facie insufficient.102 In its petition, the telecommunications carrier must explain with specificity
the possible CALEA solution and the significant difficulty or expense that that solution would impose on
the telecommunications carrier so that the Commission and later DOJ may render their respective
determinations, under sections 109(b)(1) and 109(b)(2)(A). We adopt the tentative conclusion in the
Notice that telecommunications carriers may not rely solely on the absence of industry standards and
solutions under section 109(b)(1)(K) as a basis for section 109(b)(1) relief.103
44.
We further adopt our tentative conclusion that a section 109(b)(1) petition must seek
relief for “precisely identified ‘equipment facilities, or services.’”104 In this regard, a petitioner must
describe with specificity how, in its due diligence, the telecommunications carrier made reasonable efforts
to identify a specific solution or a pathway to a specific solution. Without this showing, the Commission
will have no factual basis to evaluate whether a telecommunications carrier has satisfied the requirements
of section 109(b).
45.
In addition, to the extent that multiple solutions to a particular CALEA capability
requirement exist, the petitioner must demonstrate that it would suffer significant difficulty or expense if
it were to implement any of them. We believe that the statute requires this showing for at least two
reasons. First, the inquiry under section 109(b)(1) is whether CALEA compliance imposes a specific
harm, not whether a telecommunications carrier is unable to institute its solution of choice. If alternative,
less expensive solutions exist that are reasonably achievable, then the telecommunications carrier is not
entitled to a section 109(b)(1) determination that CALEA compliance would impose a significant
difficulty or expense. Second, it would be unreasonable to read the statute to require DOJ to pay the costs
for a more expensive solution if a less expensive solution exists. If multiple solutions exist, DOJ should
have the option to pay for the least expensive one available.105

101

In the Notice, the Commission invited comment on the telecommunications carrier’s burden of proof, including
what type of showing a petitioner must make in the absence of available technologies. See Notice, 19 FCC Rcd at
15728-29, paras. 104, 105.

102

This does not mean that the petitioner must adopt the solution. Rather, it means that the petitioner will not
receive section 109(b)(1) relief until it demonstrates that the solution would impose a significant difficulty or harm
on the petitioner.
103

Notice, 19 FCC Rcd at 15728, para. 105. In making a section 109(b)(1) determination, in addition to examining
10 specified factors, the Commission may examine “[s]uch other factors as the Commission determines are
appropriate.” 47 U.S.C. § 1008(b)(1)(K).

104

Notice, 19 FCC Rcd at 15725, para. 98.

105

Our interpretation of how the statute would operate in practice is consistent with the different language Congress
used in sections 107(c)(1) and 109(b)(1). Unlike section 107(c), section 109(b) contains no requirement that we
evaluate what is “reasonably achievable” with reference to available technology. In other words, while a petitioner
may seek relief under section 107(c) on the grounds that the industry has not developed a standard or a solution,
Footnote continued on the next page.

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Petitioner Due Diligence Requirement

46.
In the Notice, the Commission tentatively concluded that section 109(b)(1) petitioners
will be expected to demonstrate active and sustained efforts at developing and implementing CALEA
solutions for their operations, i.e., regardless of whether CALEA solutions for packet-mode are generally
available.106 We explained this “due diligence” showing as requiring petitioners to submit detailed
information about discussions and negotiations with switch manufacturers, other equipment
manufacturers, and TTPs, both before and after the FBI announced the termination of the Flexible
Deployment Program in connection with packet-mode technology. We tentatively concluded that unless
we are persuaded that petitioners have engaged in sustained and systematic negotiations with
manufacturers and third-party providers to design, develop, and implement CALEA solutions, we should
reject submitted petitions.107
47.
Many commenters disagreed with our analysis and conclusions, but none persuasively
demonstrated that section 109(b)(1) excludes consideration of due diligence and none persuade us that
consideration of due diligence is unnecessary for a proper interpretation and application of section
109(b)(1). Basically, the due diligence requirement is necessary to ensure that telecommunications
carriers demonstrate the showing required by section 109(b)(1). Section 109(b)(1) requires the
Commission to determine, upon petition, whether compliance with section 103 is reasonably achievable
for “any equipment, facility, or service installed or deployed after January 1, 1995.” Unless the evidence
demonstrates that the petitioner has comprehensively considered how to become compliant with CALEA
section 103, it would be difficult for the Commission to conclude that section 103 compliance is not
reasonably achievable. Simply put, the evidence must demonstrate that alternative solutions were not
reasonably achievable.108

section 109(b) does not provide relief on those grounds. We therefore adopt our tentative conclusion that the
requirements of section 109(b) would not be met by a petitioning telecommunications carrier that merely asserted
that CALEA standards had not been developed, or that solutions were not readily available from manufacturers.
See DOJ Comments at 70-71.
This interpretation is further supported by section 107(a)(3) that provides that the absence of industry standards
does not relieve an entity from its section 103 capability requirements. Section 107(a)(3) provides:
(3)

ABSENCE OF STANDARDS. -- The absence of technical requirements or standards for
implementing the assistance capability requirements of section 103 shall not -(A) preclude a telecommunications carrier, manufacturer, or telecommunications support services
provider from deploying a technology or service; or
(B) relieve a carrier, manufacturer, or telecommunications support services provider of the
obligations imposed by section 103 or 106, as applicable.

CALEA section 107(a)(3); 47 U.S.C. 1006(a)(3).
106

Notice, 19 FCC Rcd at 15728, para. 105; see DOJ Comments at 70-71.

107

See DOJ Comments at 71.

108

Id. at 69.

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48.
To meet this requirement, the petitioner may need to compare, for example, the cost of
making annual payments to a trusted third party for a CALEA service for a number of years to the cost of
purchasing equipment and/or systems up front that enable the petitioner to meet CALEA capability
requirements themselves. Some solutions may include both elements: leasing capabilities and buying
equipment. In addition, the petitioner may also seek to include recurring CALEA-specific operations
costs in the cost calculation. Thus, it is necessary to capture the impact of delayed vs. immediate
expenditures in calculating the total cost of any solution, and to express the cost of alternative solutions in
comparable dollars. A calculation of the (net) present value or present worth of expenditures of the
solution is a recognized way to accomplish this dual purpose.109
49.
Our analysis and conclusions here do not compel telecommunications carriers to adopt
any particular “equipment, facility, service, or feature” or “any specific design of equipment, facilities,
services, features, or system configurations.”110 Service providers are free to configure and build their
systems any way they choose. But a service provider that seeks cost recovery relief pursuant to section
109(b)(1) must demonstrate that CALEA compliance per se is not reasonably achievable. A petition must
include persuasive evidence that the petitioner cannot afford to achieve compliance through network
upgrades or equipment retrofits. It must include a demonstration that the petitioner’s preferred CALEA
solution is not reasonably achievable and that no alternative CALEA solution is reasonably achievable,
including alternative manufacturer-provided service packages, services provided by TTPs, and sharing
arrangements with other service providers.111
50.
A due diligence showing is particularly necessary to enable us to consider whether
section 109(b)(1) relief is appropriate in cases where CALEA standards have not been developed and/or
CALEA solutions are not generally available. We reject the idea that we may grant section 109(b)(1)
relief merely because standards have not been developed or solutions are not generally available.112 We
therefore adopt our tentative conclusion that the requirements of section 109(b)(1) would not be met by a
petitioning telecommunications carrier that merely asserted that CALEA standards had not been
developed, or that solutions were not readily available from manufacturers.113
51.
Nevertheless, we emphasize that section 109(b)(1)’s due diligence analysis is factspecific and will take into account, for example, the resources of the petitioner. We recognize that some
telecommunications carriers, particularly small telecommunications carriers, may conclude that they
cannot afford the efforts required to develop their own solutions. Thus, for example, a small rural
telecommunications carrier might provide evidence that the lack of industry standards and solutions,
coupled with its lack of financial resources, would justify a finding that the small telecommunications
109

See, e.g., Stephen A. Ross, Randolph A. Westerfield & Jeffrey Jaffe, Corporate Finance at 178-210 (7th ed.
2005). See Appendix E, infra, at Sections VI.C.5 and VI.D.3. We decline to specify any particular methodology
for calculating present value/worth, or to set input parameters, which include for example, the interest/discount rate
and the length of study period. Nevertheless, whichever methodology and input parameters that the petitioner uses
must be consistent with the petitioner’s and the industry’s best practices, and they must be used consistently in
determining the present value of all solutions presented in the petition.
110

See CALEA section 103(b)(1)(A), (B); 47 U.S.C. 1002(b)(1)(A), (B).

111

See DOJ Comments at 69-71; DOJ Reply Comments at 33-34.

112

See para. 27, supra.

113

Notice, 19 FCC Rcd at 15725-26, para. 98, and 15728-29, para. 105; see DOJ Comments at 70.

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carrier had met its due diligence requirements by proffering only one solution, so long as it is a bona fide
solution.114
52.
We expect that significant progress in developing CALEA standards and solutions for
broadband Internet access and interconnected VoIP services will be achieved during the 18-month
compliance period. We expect that few if any petitioners could successfully demonstrate the due
diligence necessary to support a section 109(b)(1) petition until the close of the transition. We in fact
expect broadband Internet access and interconnected VoIP providers to utilize that transition period as an
opportunity to promote the development of CALEA standards and solutions. Failure to utilize this
opportunity, or to document steps taken to promote CALEA compliance throughout the transition period,
will seriously damage a petitioner’s chances of obtaining section 109(b)(1) relief.115
d.

Section 109(b)(1)’s Eleven Criteria

53.
In determining whether a telecommunications carrier has successfully demonstrated that
compliance with a CALEA section 103 assistance capability requirement is not reasonably achievable
pursuant to section 109(b)(1), the Commission must examine the 11 statutory criteria set out in section
109(b)(1). We affirm the Commission’s tentative conclusion in the Notice that the Commission need not
weigh equally all 11 criteria, and its tentative conclusion that we should assign greater weight to national
security and public safety-related concerns.116 We also conclude that we should require petitioners to
include in their showing precisely identified CALEA section 103 capability requirements and
“equipment, facilities, or services” for which relief is sought. We affirm our finding in the Notice that
under the requirements of section 109(b)(1)(B) and 109(b)(1)(D), petitioners must include a thorough
analysis of precisely identified costs to satisfy CALEA obligations, as well as their effects on local
service ratepayers, where relevant; general allegations that projected costs were “too high” or
unreasonably burdensome will not suffice. We direct parties’ attention to the cost discussion in the
previous CALEA Second Report and Order, and we reaffirm our determination there that costs not
directly related to CALEA compliance may not be included in section 109(b) petitions.117
54.
To provide further guidance as to how the Commission will apply consideration of the
eleven section 109(b)(1) evaluative criteria in particular cases, we provide the discussion set out below.
We nevertheless caution interested persons that these guidelines are intended to provide general guidance
only. The Commission will examine each section 109(b) petition based on the facts contained therein and
in the context of a specific analysis of national security factors and other factors that exist at that time.
Section 109(b(1) directs the Commission to examine the following criteria:
(A) “The effect on public safety and national security.” Because the purpose of the CALEA
statute is to ensure public safety and national security, this criterion is critically important. In a particular
114

By “bona fide solution” we mean a solution that could be implemented as described by petitioner if we grant its
section 109(b) petition and the Attorney General subsequently agrees to pay for costs pursuant to section
109(b)(2)(A).
115

In connection with our decision that persuasive evidence must be submitted to prove cost and other economic
impact-related assertions, we adopt our tentative conclusion that petitioners must include copies of all offers, bids,
and price lists negotiated with manufacturers and third party CALEA service providers.
116

Section 109(b)(1)(A), 47 U.S.C. 1008(b)(1)(A).

117

Second Report and Order, CC Docket No. 97-213, 15 FCC Rcd at 7132-33, para. 46.

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case, the Commission will consider all relevant evidence submitted by LEAs per this criterion, as well as
recommendations about how this criterion should be applied to submitted evidence and what weight
should be assigned to such evidence in our particular deliberations. We will also consider all relevant
evidence submitted by a petitioner, including evidence about the number of electronic surveillance
requests it has received from LEAs for the five (5) year period prior to submission of its section 109(b)
petition.118 We will consider this latter evidence in connection with evaluating application of the instant
criterion as well as evaluating other, cost-related criteria set out in section 109(b)(1)(A) through (K).
(B) “The effect on rates for basic residential telephone service.” Application of this factor affects
only evaluation of section 109(b) petitions submitted by residential telephone service providers subject to
the Commission’s Part 36 regulation.119 Its relevance will be decisively affected by how the Commission
decides to implement jurisdictional separations policy pursuant to the directive set out in 47 U.S.C. §
229(e)(3).120
(C) “The need to protect the privacy and security of communications not authorized to be
intercepted.” A petitioner must submit persuasive evidence why solution(s) described in its petition could
not protect the privacy and security of customer communications. In instances where the petition presents
evidence about TTP services, the petitioner must present persuasive evidence that the TTP(s) cannot or
will not provide privacy and security protection.
(D) “The need to achieve the capability assistance requirements of section 103 by cost-effective
methods.” A petitioner must submit persuasive evidence showing that all identified solutions, including
those provided by equipment vendors121 and other manufacturers, TTPs, or solutions that the petitioner
proposes to develop for itself, would impose a significant “difficulty or expense” within the meaning of
the statute.122 In the event that there is no industry standard or available market solution at the time that a
telecommunications carrier files its petition, the telecommunications carrier would need to demonstrate
that implementation of its own proposed solution would impose a significant expense.
(E) “The effect on the nature and cost of the equipment, facility, or service at issue.” In addition
118

See DOJ Comments at 67, 69.

119

47 C.F.R. Part 36.

120

See also Notice, 19 FCC Rcd at 15740-42, paras. 136-139, and discussion, infra, at paras. 69-74.

121

We note that GVNW and DOJ contend that equipment vendors often bundle a CALEA feature with other switch
features/upgrades, thereby requiring a carrier to purchase an upgrade that includes features other than the CALEA
feature itself. See GVNW Comments at 7-8, DOJ Reply Comments at 61-62. A petitioner should document the
extent to which this is the case with respect to the particular CALEA feature(s) it must purchase. We remind
equipment vendors that they have a separate duty under section 106(b) of CALEA to make available to
telecommunications carriers on a reasonably timely basis and at a reasonable charge features or modifications as are
necessary to permit such carriers to comply with the capability requirements of section 103. See 47 U.S.C. §
1005(b). In light of this separate duty, the Commission may consider whether the price a carrier must pay for a
CALEA feature is attributable solely to CALEA compliance or is partly attributable to bundling with unrelated
software upgrades and capabilities, and may investigate equipment vendor bundling practices to determine the
effects such practices have on the CALEA costs paid by carriers or whether vendor practices are consistent with
vendors’ duties under section 106(b).
122

See DOJ Comments at 71; DOJ Reply Comments at 43-45.

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to the cost showing described in paragraph (D), the petitioner must submit persuasive evidence
demonstrating some adverse effect on its facilities.
(F) “The effect on the operation of the equipment, facility, or service at issue.” In addition to the
cost showing in paragraph (D), the petitioner would need to demonstrate a specific adverse effect on its
operations.
(G) “The policy of the United States to encourage the provision of new technologies and services
to the public.” The petitioner must submit persuasive evidence demonstrating that CALEA requirements
were preventing it from deploying a specifically identified new technology or service, and/or persuasive
evidence that imposing CALEA requirements would require it to take a technology or service off the
market.
(H) “The financial resources of the telecommunications carrier.” A showing under this factor
would be similar to the showing under factor (D). The petitioner must present financial resource
documentation, including current balance sheets and a complete analysis of debt and equity financing
resources that are available. If the particular petitioner is a small and rural telecommunications carrier,
this must include a description and analysis of all funding and loan guarantee sources available from state
and federal assistance programs. Where relevant, all telecommunications carriers must provide evidence
showing how state and local regulation affects the availability or use of its financial resources. For
example, telecommunications carriers regulated by state Public Utility Commissions should describe in
detail how Commission-approved depreciation schedules can be modified to provide for capital
equipment acquisition on terms more favorable than currently negotiated and approved terms, or provide
evidence that such schedules cannot be modified. Per this criterion, the petitioner must submit persuasive
evidence that demonstrates that its current financial resources and financial resources generally available
to it are not or would not be sufficient to prevent the imposition of “significant difficulty or expense” as
defined by CALEA section 109(b)(1).123
(I) “The effect on competition in the provision of telecommunications services.” Under this
factor, the petitioner would need to submit persuasive evidence that demonstrate a specific and
quantifiable harm.
(J) “The extent to which the design and development of the equipment, facility, or service was
initiated before January 1, 1995.” This factor is self-explanatory. In most if not all cases, it will not
apply to facilities-based broadband Internet access and interconnected VoIP.
(K) “Such other factors as the Commission determines are appropriate.” This provision enables
the Commission to evaluate factors that may arise on a case by case basis, that were difficult for Congress
to predict when enacting the statute, and are difficult for the Commission to predict during a rulemaking.

123

See DOJ Comments at 67.

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55.
Appendix E, attached hereto, sets forth filing instructions explaining the specific
information telecommunications carriers should include in their section 109(b) petitions. Appendix E
reflects the proposal in the Notice, consideration of the record in this proceeding, and our further analysis
herein of the statute’s requirements.
56.
Some small telecommunications carriers have urged us to allow telecommunications
carriers filing section 109(b)(1) petitions to pool their applications under one general application petition
and, as a result, more efficiently present common arguments and save the costs of submitting individual
petitions, each of which would be assessed the $5200 filing fee. We conclude that this is inappropriate
given the requirements imposed by section 109(b)(1).124 Section 109(b)(1) requires a detailed
presentation of evidence that section 103 compliance is not reasonably achievable. Petitioners are
required to submit evidence that demonstrates this in connection with precisely identified services,
equipment, and facilities. These will differ from carrier to carrier. Additionally, petitioners are required
to identify cost and financial resources information that is detailed and highly telecommunications carrierspecific. Even if we were to accept jointly pooled section 109(b)(1) petitions, we would, by operation of
the statute, need to separate each separate telecommunications carrier petition for individual assessment.
This individual assessment will impose predictable costs.
3.

Confidential Treatment of Section 107(c)(1) and Section 109(b)(1) Petitions

57.
In addition to highly sensitive cost and financial resources information, section 107(c)(1)
and section 109(b)(1) petitions are likely to contain specific information regarding the inability of
telecommunications equipment, facilities, and services to comply with CALEA standards. The facts
underlying discrete section 107(c) and section 109(b) adjudicatory proceedings could also involve highly
sensitive information about LEA activities. We therefore believe that section 107(c) and section 109(b)
filings would be entitled to confidential treatment under the Freedom of Information Act (FOIA) and the
Commission’s rules.125 Accordingly, we direct petitioners to file their petitions under a general claim of
confidential or proprietary protection, subject only to scrutiny by the Commission and the Attorney
General who is consulted in section 107(c) adjudications and is a party to all section 109(b)

124

See DOJ Reply Comments at 43 n.164.

125

Specifically, we believe that this information could be withheld from public disclosure under FOIA Exemption 4,
5 U.S.C. § 552(b)(4), which protects “trade secrets and commercial or financial information obtained from a person
and privileged or confidential.” FOIA Exemption 4 also has been construed to protect information obtained by the
government that could impair the effectiveness of a government program such as CALEA. See, e.g., Critical Mass
Energy Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992) (noting that Exemption 4 “protects a governmental
interest in administrative efficiency and effectiveness”); Nat’l Parks and Conservation Ass’n v. Morton, 498 F.2d
765, 770 n.17 (D.C. Cir. 1974) (noting that other governmental interests may be embodied in this exemption). The
Commission applied this rationale in the outage reports proceeding, specifically finding that it was obliged under
Exemption 4 to consider any adverse impact that disclosure might have on government programs. See New Part 4
of the Commission’s Rules Concerning Disruptions to Communications, 19 FCC Rcd 16830, 16855 (2004). We
also believe that this information could be withheld from disclosure under FOIA Exemption 7(F), 5 U.S.C. §
552(b)(7)(F), which protects records compiled for law enforcement purposes that “could reasonably be expected to
endanger the life or physical safety of any individual.” See 47 C.F.R. § 0.457; see also Living Rivers, Inc. v. United
States Bureau of Reclamation, 272 F.Supp.2d 1313, 1321 (D. Utah 2003)(allowing information about inundation
dams to be withheld under FOIA Exemption 7(F) as sensitive, homeland security information “that could prove
deadly if obtained by those seeking to do harm to the public on a large scale”).

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adjudications.126 Petitioning telecommunications carriers are not required to request separately
confidential treatment for the information submitted in their petitions.127 However, petitioners must mark
the top of each page of their petitions: “Confidential – Not for Public Inspection.” We further conclude
that, pursuant to section 0.457(g) of the Commission’s rules, the information provided by
telecommunications carriers in these CALEA proceedings will not be made routinely available for public
inspection.128 No commenter disagrees with this approach.
4.

Monitoring Reports

58.
In its Petition, Law Enforcement requested that the Commission impose a new
compliance regime consisting of standardized CALEA compliance benchmarks for packet technologies.
Under this proposal, limited compliance extensions generally would be granted only if providers of
services that use packet technologies agreed to meet the proposed benchmarks.129 Most LEAs supported
this proposal; nearly everyone else opposed it as exceeding or contravening the explicit terms of the
statute. We decline at this time to adopt the Law Enforcement benchmark proposal. As we stated in the
Notice, we conclude that the interpretation of CALEA that we adopt in this Second Report and Order,
particularly of CALEA sections 107(c) and 109(b), will better promote law enforcement’s stated objective
that all telecommunications carriers should become compliant with CALEA requirements as soon as
possible.130
59.
Nevertheless, we share Law Enforcement’s general concern that telecommunications
carriers timely comply with CALEA for packet technologies. In the past, telecommunications carriers’
progress in complying with CALEA for packet technologies was effectively monitored in two ways: by
the FBI when it administered a Flexible Deployment program for packet technology, and by the
Commission in administering section 107(c) extension petitions. The FBI’s Flexible Deployment
program no longer applies to packet technology and, as a consequence of our decision here, few
telecommunications carriers will be able to seek extensions under section 107(c). With information from
these programs no longer available, the Commission will have difficulty identifying, with sufficient
forewarning, impediments to timely compliance and will have little opportunity to assist the industry, as
appropriate, in achieving timely compliance. We thus conclude that all telecommunications carriers
providing facilities-based broadband Internet access or interconnected VoIP services shall file a
monitoring report with the Commission which will help the Commission ensure that providers of services
that use packet technologies become CALEA compliant expeditiously. Specifically, with respect to
facilities-based broadband Internet access providers and interconnected VoIP providers, we believe that a
monitoring report will better ensure that they are able to meet the May 14, 2007 CALEA compliance
deadline. A sample monitoring report (Form XXX) is provided in attached Appendix G to this Second
Report and Order. These monitoring reports are separate and distinct from any section 107(c) or section
126

CALEA sections 107(c), 109(b)(1); 47 U.S.C. §§ 1006(c), 1008(b)(1).

127

47 C.F.R. § 0.459(a).

128

47 C.F.R. § 0.457(g). Note, however, that the Commission will entertain requests under section 0.461 of its rules
for permission to inspect these records, but would grant such request only in the event the requester is able to meet
the requirements of section 0.461. 47 C.F.R. § 0.461. See generally, Treatment of Confidential Information
Submitted to the Commission, Report and Order, 13 FCC Rcd 24816 (1998).
129

Petition at 34-53.

130

Notice, 19 FCC Rcd at 15721-22, para. 91.

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109 filings that a telecommunications carrier may choose to make, and will not be considered substitutes
for seeking relief under those provisions.
60.
Accordingly, we specify the following procedure for these monitoring reports. Once
OMB approves the new paperwork collection requirements of this Second Report and Order, we will
issue a public notice setting forth a deadline that will require that providers of all such services to submit
to the Commission a completed Form XXX, briefly describing the status of its compliance for each
service based on packet technology, e.g., whether the service already complies, whether the
telecommunications carrier will comply with an identified industry standard or develop an ad hoc
solution, the steps the telecommunications carrier is undertaking to achieve CALEA compliance, any
problems with manufacturer support or network installation, and the date compliance is anticipated.
Completed Forms XXX will not be made available to the public. We will, however, share completed
Forms XXX with DOJ/FBI so that they may evaluate the progress each provider of a service that uses
packet technology is making to achieve CALEA compliance. Where necessary, we may request
additional information from a provider regarding its efforts to become CALEA compliant by May 14,
2007 deadline.
61.
We find that the above procedure will promote expeditious CALEA compliance by
providers of services that use packet technologies, but whose services are not yet CALEA compliant.
We recognize that this procedure will impose an increased administrative burden on such providers, but
anticipate that this burden will be minimal. To minimize the burden, we have developed a relatively short
reporting form.
5.

Disposition of Pending Section 107(c)(1) Petitions

62.
As discussed above, we conclude that section 107(c) extension relief is not available for
applications that include equipment, facilities and services installed or deployed on or after October 25,
1998. Accordingly, once OMB approves the new paperwork collection requirements of this Second
Report and Order, we will issue a Public Notice setting forth a deadline by which any
telecommunications carrier that has a section 107(c) petition on file with us shall file a letter that attests
that its pending petition exclusively concerns equipment, facilities and services installed or deployed
before October 25, 1998.131 The Commission will thereafter dismiss all non-conforming petitions and
petitions for which clarifying letters have not been received.
C.

ENFORCEMENT OF CALEA

63.
In the Notice, we considered whether, in addition to the enforcement remedies through
the courts available to LEAs under section 108 of CALEA, we may take separate enforcement action
against telecommunications carriers, manufacturers and providers of telecommunications support services
that fail to comply with CALEA. We stated that we appear to have broad authority under section 229(a)
of the Communications Act to promulgate and enforce CALEA rules against both common carriers and
131

Telecommunications carriers and others may also file amended section 107(c) petitions so long as such petitions
exclusively seek extensions for equipment, facilities and services installed or deployed before October 25, 1998.
A petitioner filing an amended section 107(c) petitions should clearly declare on the face of the petition that the
petition has been filed in response to the Commission’s action in the Second Report and Order and Memorandum
Opinion and Order in ET Docket No. 04-295 and that it solely concerns equipment, facilities and services installed
or deployed before October 25, 1998, along with that information set out and described in Appendix F, infra.

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non-common carriers, and sought comment on this analysis. We also sought comment on whether
sections 108 and/or 201 of CALEA impose any limitations on the nature of the remedy that we may
impose (e.g. injunctive relief) and whether section 106 of CALEA imposes any limitations on our
enforcement authority over manufacturers and support service providers.132
64.
Additionally, we sought comment in the Notice on how we would enforce the assistance
capability requirements under section 103 of CALEA. To facilitate enforcement, we tentatively
concluded that, at a minimum, we should adopt the requirements of section 103 as Commission rules. We
asked whether, given this tentative conclusion, the lack of Commission-established technical
requirements or standards under CALEA section 107(b) for a particular technology would affect our
authority to enforce section 103. Further, we asked whether there are other provisions of CALEA, such
as section 107(a)’s safe harbor provisions, that the Commission should adopt as rules in order to
effectively enforce the statute.133 Moreover, we stated in the Notice that we believed it to be in the public
interest for covered carriers to become CALEA compliant as expeditiously as possible and recognized the
importance of effective enforcement of our rules affecting such compliance. We sought comment on
whether our general enforcement procedures are sufficient for purposes of CALEA enforcement or
whether we should implement some special procedures for purposes of CALEA enforcement. We also
sought comment on any other measures we should take into consideration in deciding how best to enforce
CALEA requirements.
65.
Discussion. DOJ strongly supports the Commission enforcing the CALEA rules under
section 229(a) of the Communications Act. DOJ contends that the telecommunications industry has in
many instances failed to cooperate with LEAs and has delayed establishing CALEA standards and
implementing new wiretapping technologies.134 However, industry commenters contend that CALEA
enforcement authority lies exclusively with the courts under CALEA section 108.135
66.
We find that we have the authority under section 229(a) to enforce CALEA, as that
section gives us authority to “prescribe such rules as are necessary to implement the requirements of the
Communications Assistance for Law Enforcement Act.” 136 As we observed in the Notice, section 229(a)
provides broad authority for the Commission to adopt rules to implement CALEA and, unlike section
229(b) does not limit our rulemaking authority to common carriers.137 While the “penalties” provision of
section 229(d) refers to CALEA violations “by the carrier,” section 229(d) does not limit the
Commission’s general enforcement authority under the Communications Act.138 We thus conclude that
132

Notice, 19 FCC Rcd at 15732-33, para. 114. Section 106 requires a manufacturer of telecommunications
transmission or switching equipment and a provider of telecommunications support services to make available, on a
reasonably timely basis and at a reasonable charge, to a carrier that uses its equipment, facilities or services the
features or modifications as necessary to allow the carrier to comply with the assistance capability requirements of
Section 103 and the capacity requirements of Section 104. 47 U.S.C. § 1005(b).

133

Notice, 19 FCC Rcd at 15733, para. 115.

134

DOJ Comments at 80-81; DOJ Reply Comments at 48-50.

135

BellSouth Comments at 38; CTIA Comments at 10; Motorola Comments at 20; Nextel Comments at 11; SBC
Comments at 24-25; T-Mobile Comments at 26; TIA Comments at 4; US ISPA Comments at 41.
136

47 U.S.C. § 229(a).

137

47 U.S.C. § 229(b).

138

Section 229(d) provides:

Footnote continued on the next page.

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the Commission has general authority under the Communications Act to promulgate and enforce CALEA
rules against carriers as well as non-common carriers. We also conclude that section 106 of CALEA does
not limit our authority to promulgate and enforce CALEA rules against manufacturers and support service
providers. Accordingly, we find that, contrary to commenters who argued that authority to enforce
CALEA lies exclusively with the courts under CALEA section 108,139 we have the authority to prescribe
CALEA rules and investigate the compliance of those carriers and providers subject to such rules.
Additionally, under the Communications Act, the Commission has broad authority to enforce its rules. It
can, for example, issue monetary forfeitures and cease and desist orders against common carriers and noncommon carriers alike for violations of Commission rules.140
67.
We also conclude that sections 108 and 201 of CALEA do not limit the nature of the
remedy that the Commission may impose.141 Whereas court actions under sections 108 and 201 would
typically follow a failed attempt by a carrier to comply with an electronic surveillance order, the
Commission may pursue enforcement actions against any carrier for failure to ensure that its equipment,
facilities or services are capable of providing the assistance capability requirements prior to receiving an
electronic surveillance request. Thus, the Commission’s enforcement authority is complementary to, not
duplicative of, the authority granted LEAs under sections 108 and 201.
68.
We observe that the Commission’s rules already include various CALEA requirements
that we may enforce, including system security and records management requirements for all carriers
subject to CALEA and assistance capability requirements for wireline, cellular and PCS carriers.142 Our
existing rules for wireline, cellular and PCS carriers already state that these carriers are to comply with
the assistance capability requirements in section 103; however, we have not previously codified this
requirement for other carriers subject to CALEA. We thus adopt our tentative conclusion to codify this
statutory requirement and thereby clarify that all carriers subject to CALEA are to comply, at a minimum,
with the assistance capability requirements of section 103.143 This action will facilitate the Commission’s
enforcement of CALEA. We recognize that, in the absence of Commission action to specify more precise
For purposes of this Act, a violation by an officer or employee of any policy or procedure adopted by a
common carrier pursuant to subsection (b), or of a rule prescribed by the Commission pursuant to
subsection (a), shall be considered to be a violation by the carrier of a rule prescribed by the Commission
pursuant to this Act.
47 U.S.C. § 229(d).
139

47 U.S.C. § 1007.

140

See, e.g., 47 U.S.C. §§ 312(b), 503(b). We conclude that, at this time, we will not adopt any special procedures
to enforce CALEA and instead will rely on the complaint and investigation procedures already in our rules.
141

18 U.S.C. § 2522(a) (where a court issuing a surveillance order finds that a telecommunications carrier,
manufacturer, or support services provider has failed to comply with CALEA, the court may direct such entity to
comply); 18 U.S.C. § 2522(b) (the Attorney General may, in a civil action in the United States district court, obtain
an order in accordance with section 108 of CALEA, directing that a telecommunications carrier, manufacturer, or
support services provider comply with CALEA); 18 U.S.C. § 2522(c) (authorizing a court to impose a civil penalty
of up to $10,000 per day against a telecommunications carrier, manufacturer, or support services provider for each
day in violation after the issuance of a court order requiring compliance).
142

See, e.g., 47 C.F.R. §§ 22.1100-22.1103; 24.900-24.903; 64.2200-64.2203.

143

We are codifying our rules for all carriers subject to CALEA in new Subpart Z of Part 1 of our rules. In doing
so, we consolidate existing CALEA rules into this Subpart. See paras 81-82, infra.

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requirements in response to a section 107 (b) deficiency petition, as we did previously regarding J-STD025, our rule sets forth a minimum requirement that carriers, manufacturers and support service providers
may satisfy in various ways (e.g., implementing an industry standard, ad hoc or interim solution).144
Nonetheless, this does not diminish our resolve to consider carefully a bona fide complaint that a carrier,
manufacturers or support service provider has not provided the necessary assistance capabilities and to
take appropriate enforcement action.
D.

COST RECOVERY ISSUES

69.
In the Notice, the Commission sought comment on a number of issues related to the
recovery of CALEA compliance costs, including the nature of such costs and from which parties the costs
could be recovered.145 The Commission also inquired into CALEA cost recovery pursuant to intercept
statutes.146 The Commission further sought comment on whether specific cost recovery rules should be
adopted to help ensure that small and rural carriers can become CALEA-compliant.147 Acting pursuant to
section 229(e)(3) of the Communications Act, the Commission also referred to the Federal-State Joint
Board on Jurisdictional Separations (Joint Board) the following question: whether CALEA compliance
costs should be separated between intrastate and interstate jurisdictions, and, if so, how the associated
costs and revenues should be allocated.148 Because of the importance of the issues, the Commission asked
the Joint Board to issue recommendations within a year of the release of the Notice, by August 9, 2005.149
The Joint Board, however, has not yet issued its recommendation.
70.
In the Notice, the Commission tentatively concluded that carriers bear responsibility for
CALEA development and implementation costs for post-January 1, 1995 equipment and facilities.150 We
affirm this tentative conclusion. Cost recovery from the federal government under CALEA section 109
turns on whether equipment and facilities were deployed before or after January 1, 1995.151 CALEA
section 109 placed financial responsibility on the federal government for CALEA implementation costs
related to equipment deployed on or before January 1, 1995.152 If the federal government refused to pay
for such modifications, a carrier’s pre-1995 deployed equipment and facilities are considered CALEA
compliant until such equipment or facility “is replaced or significantly upgraded or otherwise undergoes

144

The absence of technical requirements or standards for implementing the assistance capability requirements of
section 103 does not relieve a carrier, manufacturer, or support services provider of its CALEA obligations.
47 U.S.C. § 107(a)(3).
145

Notice, 19 FCC Rcd at 15734-42, paras. 117-39.

146

Id. at 15739-40, paras. 132-33.

147

Id. at 15739, para. 131.

148

Id. at 15741, para. 138.

149

Id.

150

Id. at 15737, para. 125.

151

Compare 47 U.S.C. § 1008(a), (d) with § 1008(b).

152

Section 109(a), (d) of CALEA, 47 U.S.C. § 1008(a), (d).

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major modification” for purposes of normal business operations.153 On the other hand, for CALEA
implementation costs associated with equipment deployed after January 1, 1995, CALEA section 109
places financial responsibility on the telecommunications carriers unless the Commission determines
compliance is not “reasonably achievable.”154 Only in that event may the Attorney General agree to pay
carriers the “additional reasonable costs of making compliance . . . reasonably achievable.”155 Based on
CALEA’s clear delineation of responsibility for compliance costs, we conclude that carriers bear
responsibility for CALEA development and implementation costs for post-January 1, 1995 equipment and
facilities, absent a finding that compliance is not reasonably achievable pursuant to CALEA section
109(b).156
71.
In the Notice, the Commission acknowledged its prior statement regarding the ability of
carriers to recover a portion of their CALEA capital costs through electronic surveillance order charges
imposed on LEAs, and that this statement was made without the benefit of a complete and full record on
the issue.157 The Commission made this observation as one of several aspects that mitigated the cost
burden on carriers of implementing four CALEA punch list items.158 However, because we now conclude
that CALEA section 109 provides the exclusive mechanism by which carriers may recover from law
enforcement capital costs associated with meeting the capability requirements of CALEA section 103,159
the Commission’s prior statement was incorrect to the extent it suggested that carriers may recover
CALEA capital costs through intercept charges. As discussed above, CALEA specifically addresses the
allocation of responsibility for compliance costs. CALEA section 109 makes the federal government
responsible for compliance costs for the period on or before January 1, 1995, and places the responsibility
for compliance costs after January 1, 1995 on carriers, absent a finding that compliance is not reasonably
achievable pursuant to CALEA section 109(b).160 Allowing carriers to recover CALEA compliance costs
from the government through other means, such as through intercept charges, would be inconsistent with
the cost recovery methodology set forth in CALEA section 109 because it would disrupt the cost burden
balance between law enforcement and carriers carefully crafted by Congress in enacting CALEA. In
short, as DOJ notes, it “would essentially allow carriers to do an ‘end-run’ around the provisions of
section 109(b) and Congressional intent.”161 We therefore conclude that, while carriers possess the
153

Section 109(d) of CALEA, 47 U.S.C. § 1008(d). See also CALEA section 108(c)(3), 47 U.S.C. § 1007(c)(3) (no
court may issue a CALEA enforcement order requiring a carrier to make modifications to pre-1995 equipment or
facilities unless the federal government has agreed to pay for any such modifications).

154

Section 109(b)(1) of CALEA, 47 U.S.C. § 1008(b)(1).

155

Section 109(b)(2)(A) of CALEA, 47 U.S.C. § 1008(b)(2)(A).

156

47 U.S.C. § 1008(b). Commenters opposing this conclusion, see, e.g., CTIA Comments at 13-14; Nextel
Comments at 4; RTG Comments at 8; SBC Comments at 27-28, provide no convincing arguments to overcome the
clear bifurcation of cost responsibilities set forth in CALEA section 109.
157

Notice, 19 FCC Rcd at 15739, para. 132 (citing Order on Remand, 17 FCC Rcd at 6917, para. 60).

158

Id.

159

“Except as provided in subsections . . . 109(b) . . . , a telecommunications carrier shall ensure that its equipment,
facilities, or services that provide a customer or subscriber with the ability to originate, terminate, or direct
communications are capable of [providing the capabilities required by CALEA].” CALEA section 103(a), 47
U.S.C. § 1002(a).
160

47 U.S.C. § 1008.

161

DOJ Reply Comments at 66.

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authority to recover through intercept charges the costs associated with carrying out an intercept that is
accomplished using a CALEA-based intercept solution,162 they are prohibited by CALEA from recovering
through intercept charges the costs of making modifications to equipment, facilities, or services pursuant
to the assistance capability requirements of CALEA section 103 and the costs of developing, installing,
and deploying CALEA-based intercept solutions that comply with the assistance capability requirements
of CALEA section 103.163
72.
To the extent carriers do not meet the necessary criteria for obtaining cost recovery
pursuant to section 109(b) of CALEA,164 carriers may absorb the costs of CALEA compliance as a
necessary cost of doing business, or, where appropriate, recover some portion of their CALEA section
103 implementation costs from their subscribers.165 The specific provision allowing carriers to recover
some portion of their CALEA capital costs from their subscribers also reinforces our conclusion that
carriers may not recover such costs from law enforcement through intercept charges. To the extent that
carriers are not able to recover their CALEA capital costs from the federal government through section
109, Congress provided only one other avenue for carriers to recover such costs, and that is from
subscribers, not law enforcement. Such recovery from consumers, of course, will vary among
telecommunications carriers subject to CALEA depending on certain factors. Rate-regulated carriers
(e.g., incumbent local exchange carriers) cannot raise rates without first obtaining authorization to do so.
Other carriers (e.g., Commercial Mobile Radio Services (CMRS) providers) can recover their costs from
subscribers on a competitive market basis.166 Given this backdrop, in the Notice, we invited comment on
whether a national surcharge scheme is feasible for carriers in their efforts to meet CALEA
requirements.167 We also sought comment on whether the Commission would need to undertake a

162

See, e.g., 18 U.S.C. § 2518(4).

163

While some commenters point to 18 U.S.C. § 2518(4) as support for the proposition that carriers may recover
CALEA capital costs from law enforcement through intercept charges, see, e.g., CTIA Comments at 28; Corr
Comments at 10; Global Crossing Comments at 16; SBC Comments at 26; we disagree. Indeed, we believe that it is
significant that when CALEA was passed, Congress provided specified cost recovery mechanisms for CALEA
capital costs in CALEA section 109 and section 229 of the Communications Act but chose not to amend the portion
of 18 U.S.C. § 2518(4) addressing intercept charges (even though Congress amended other provisions of Title III in
CALEA). This strongly suggests that Congress did not intend for the additional compliance costs associated with
CALEA to be recovered through intercept charges authorized by 18 U.S.C.§ 2518(4) but rather by those
mechanisms set forth in CALEA itself.
164

See supra Section III.B.2 for a discussion of the criteria to be met by carriers seeking cost recovery pursuant to
section 109(b)(1) of CALEA, 47 U.S.C. § 1008(b)(1).
165

See 47 U.S.C. § 229(e) (authorizing common carriers to petition the Commission to adjust charges, practices,
classifications, and regulations to recover costs expended for making modifications to equipment, facilities, or
services pursuant to the requirements of section 103 of CALEA).
166

See 47 U.S.C. § 332(c)(3) (preempting the states from any rate regulation of CMRS providers). See Notice, 19
FCC Rcd at 15738, para. 128. While some commenters expressed concern about the ability of small carriers in
particular to recover a significant portion of their CALEA from subscribers, commenters uniformly agreed that
carriers not subject to rate regulation are free to recover all or part of their CALEA costs by passing them on to their
subscribers on a competitive market basis. See, e.g., DOJ Comments at 85-87, Global Crossing Comments at 16,
SBC Comments at 29.
167

Notice, 19 FCC Rcd at 15738, para. 129.

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specific forbearance analysis under section 10 of the Communications Act, and whether states may
expressly provide for or preclude the recovery of CALEA compliance costs.168
73.
We decline to adopt a national surcharge to recover CALEA costs. We find that it would
not serve the public interest to use a national surcharge scheme or to implement some form of cost
pooling system, as some commenters suggest,169 because such a scheme would increase the administrative
burden placed upon the carriers and provide little incentive for carriers to minimize their costs. We
therefore decline to mandate a surcharge or other specific method of CALEA cost recovery. We find that
carriers that are not subject to rate regulation may choose to recover their CALEA-related costs from their
subscribers through any lawful manner consistent with their obligations under the Communications
Act.170 Section 229(e) of the Communications Act allows rate-regulated common carriers to seek to
recover their federally-allocated CALEA section 103 costs from subscribers.171 As noted above, the Joint
Board has not yet provided its recommendation as to the allocation of CALEA costs between the federal
and state jurisdictions. After the Joint Board issues its recommendation, and to the extent that CALEA
costs ultimately are allocated to the federal jurisdiction, rate-regulated carriers subject to the
Commission’s price cap rules have the ability to seek exogenous treatment of the federally-allocated
CALEA costs.172 Carriers subject to the Commission’s rate-of-return rules have the ability to propose rate
changes that would seek recovery of any federally-allocated CALEA costs not already recovered in
rates.173
74.
Commenters to the Notice also argue that carriers with smaller subscriber bases are less
able to bear the costs of CALEA implementation.174 To the extent CALEA costs prohibit these carriers
from reasonably achieving CALEA compliance, CALEA section 109(b) provides a remedy.175 The
carriers can seek a determination from the Commission that CALEA compliance is not reasonably
achievable, and, upon such a determination, the Attorney General may agree to pay the costs of
compliance for these carriers, or the carriers will be deemed to be in compliance.176

168

Id. at 15738, para. 130; 47 U.S.C. §§ 160, 332. Because we are not adopting cost recovery rules governing the
recovery of CALEA costs from subscribers, we do not need to address whether analyses under sections 160 or 332
are warranted here.
169

See RCA Comments at 2; United Utilities Reply Comments at 7.

170

We note that this approach is consistent with the recovery of other costs, including those for universal service
and local number portability, incurred by carriers that are not subject to rate regulation. See Truth-in-Billing and
Billing Format, CC Docket No. 98-170 and CG Docket No. 04-208, Second Report and Order, Declaratory Ruling,
and Second Further Notice of Proposed Rulemaking, 20 FCC Rcd 6448, 6462, para. 28 (2005); Telephone Number
Portability, CC Docket No. 95-116, Third Report and Order, 13 FCC Rcd 11701, 11774, para. 136 (1998).
171

47 U.S.C. § 229(e).

172

47 C.F.R. § 61.45(d).

173

47 C.F.R. §§ 61.38 and 61.39.

174

RTG Comments at 7; United Utilities Reply Comments at 4.

175

47 U.S.C. § 1008(b).

176

47 U.S.C. § 1008(b)(2).

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E.

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SYSTEM SECURITY REQUIREMENTS

75.
In the First R&O, we concluded that providers of facilities-based broadband Internet
access service and interconnected VoIP service newly identified as subject to CALEA under the SRP are
to comply with the assistance capability requirements in section 103 of CALEA within 18 months of the

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effective date of the First R&O.177 In this Second R&O, we determine that these newly identified carriers
must comply with the system security requirements in section 105 of CALEA and section 229(b) of the
Communications Act, as codified in the Commission’s rules,178 within 90 days of the effective date of this
Second R&O.179
76.
We find that, based on the record, 90 days is a reasonable time period to expect providers
of facilities-based broadband Internet access service and interconnected VoIP service to comply with the
Section 105 and 229(b) system security requirements, as codified in the Commission’s rules.180 Thus, we
require these carriers to file with the Commission within 90 days of the effective date of this Second R&O
the policies and procedures they use to comply with the system security requirements as codified in our
rules. Ninety days is the same amount of time provided by the Commission when it initially adopted
these requirements.181 Timely compliance with these requirements will assist LEAs and the Commission
in identifying those entities now subject to CALEA, provide important contact information for
Commission follow-up on CALEA compliance, and, more importantly for LEAs, ensure that providers of
facilities-based broadband Internet access service and interconnected VoIP service are adequately
prepared for assisting LEAs in conducting lawful electronic surveillance.
F.

FUTURE SERVICES AND TECHNOLOGIES

77.
In the Notice, the Commission tentatively concluded that it is unnecessary to adopt Law
Enforcement’s proposal regarding the Commission identifying future services and entities subject to
CALEA.182 We recognized Law Enforcement’s need for more certainty regarding the applicability of
CALEA to new services and technologies, but expressed concerned that Law Enforcement’s proposed
approach could be inconsistent with CALEA’s statutory intent and could create an obstacle to
innovation.183 We noted that the requirements of the statute and its legislative history seem to support
opponents’ arguments that Congress did not intend that manufacturers or service providers would be
required to obtain advance clearance from the government before deploying a technology or service that
is not subject to CALEA. We also expressed concern that, as a practical matter, providers will be reluctant
to develop and deploy innovative services and technologies if they must build in CALEA capabilities to
177

First R&O, 20 FCC Rcd at 14990, para. 3.

178

The Commission adopted system security requirements for telecommunications carriers in 1999. See also 47
C.F.R. §§ 64.2100-64.2106. The Commission’s rules provide guidance to carriers on policies and procedures for
employee supervision and control, as well as maintaining secure and accurate records, when responding to an
appropriate legal authorization for electronic surveillance. Each carrier is required to file with the Commission the
current policies and procedures it uses to comply with these requirements, which are subject to Commission review
and enforcement.

179

Other carriers were subject to CALEA prior to the First Report and Order in this proceeding.

180

Most commenters did not address compliance dates for system security requirements, although a few noted that
complying with some of these obligations may be difficult for some small entities to meet and for those who have
never assisted with an order for electronic surveillance; e.g., see SIA Comments at 17-18. We note that trusted third
parties and service bureaus can assist carriers in processing surveillance orders in accordance with the system
security requirements, thereby ameliorating the burden for some carriers.
181

47 C.F.R § 64.2105.

182

Notice, 19 FCC Rcd at 15710, para. 60.

183

Id. 19 FCC Rcd at 15710-11, paras. 60-61.

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equipment that ultimately may not be subject to CALEA or wait for a ruling on the statute’s application to
the new service or technology.184
78.
Discussion. In its comments to the Notice, DOJ argues that the Commission should adopt
procedures to determine whether future services and entities are subject to CALEA. DOJ contends that it
would be helpful for industry and LEAs to be able to seek rulings from the Commission regarding
CALEA’s applicability to a new service in advance of that service’s introduction into the marketplace.
DOJ concludes that the Commission should require or strongly encourage all providers of interstate wire
or electronic communications services that have any question about whether they are subject to CALEA
to seek Commission guidance at the earliest possible date, well before deployment of the service in
question.185
79.
Other commenters support the tentative conclusion set forth in the Notice, contending
that the public interest in innovation is not served by government design mandates imposed upon
manufacturers and telecommunications carriers.186 Verizon states that, while it supports the availability of
an optional expedited declaratory ruling procedure for carriers that are unsure of their CALEA
obligations, DOJ’s proposed procedures and related requirements would effectively force carriers to
obtain pre-authorization of new services and would contradict Congress’s intent expressed in CALEA’s
legislative history, which makes clear that CALEA should be implemented in a way that does not impede
the introduction of new technologies, features, and services.187
80.
We agree with Verizon and other commenters that it would be inconsistent with the
legislative history of CALEA and inappropriate as a matter of policy for the Commission to identify
future services and entities that may be subject to CALEA.188 While we are sympathetic to DOJ’s goal of
establishing greater certainty regarding the applicability of CALEA to new services and technologies, we
find that implementing DOJ’s proposal would have a chilling effect on innovation. We believe that we
can best determine the future services and entities that are subject to CALEA on a case-by-case basis.
However, we concur with Verizon that an optional expedited declaratory ruling procedure for entities that
are unsure of their CALEA obligations with regard to new services would be useful. Accordingly,
telecommunications carriers and manufacturers, as well as LEAs, may petition the Commission for a
declaratory ruling as to CALEA obligations with regard to new equipment, facilities and services.
G.

CONSOLIDATION OF CALEA RULES

81.
We are taking this opportunity to consolidate our CALEA rules into Part 1. Currently,
those rules are contained in three different Parts of the Commission’s rules: Part 22, titled “Public Mobile
Services;” Part 24, titled “Personal Communications Services;” and Part 64, titled “Miscellaneous Rules
Related to Common Carriers.” CALEA rules for Parts 22 and 24 are each contained in a Subpart J, titled
“Required New Capabilities Pursuant to the Communications Assistance for Law Enforcement Act
184

Id. 19 FCC Rcd at 15711, para. 61.

185

DOJ Comments at 36-38.

186

EFF Reply Comments at 3; US ISPA Comments at 14-15.

187

Verizon Reply Comments at 14.

188

But see discussion at para. 32, supra (carriers should incorporate a CALEA compliance plan into new facilities
deployments).

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(CALEA).” Each respective Subpart sets forth the CALEA capabilities that must be provided by cellular
and Personal Communications Services (PCS) telecommunications carriers. CALEA rules for Part 64 are
contained both in Subpart V, titled “Telecommunication Carrier System Security and Integrity Pursuant
to the Communications Assistance for Law Enforcement Act (CALEA);” and in Subpart W, titled
“Required New Capabilities Pursuant to the Communications Assistance for Law Enforcement Act
(CALEA).” Subpart V of Part 64 sets forth the CALEA systems security and integrity rules for all
telecommunications carriers, while Subpart W of Part 64 sets forth the CALEA capabilities that must be
provided by wireline telecommunications carriers.
82.
Our current CALEA rules structure is somewhat confusing because capability
requirements are contained in three different Parts, while systems security and integrity requirements are
contained in only one Part. Further, the capability requirements for cellular, PCS, and wireline
telecommunications carriers specified in different Parts are identical, with the only differences in
language being the specific references to the three different types of carriers. Moreover, as discussed in
paragraph 68, supra, we are herein codifying the statutory requirement that all carriers subject to CALEA
must comply with the assistance capability requirements of section 103. While we could codify this
requirement in Part 64, that Part pertains to “telecommunications carriers” under the Communications
Act, rather than the broader application of that term under CALEA.189 We therefore find it more logical
to codify this requirement and consolidate our existing CALEA rules in Part 1, which is titled “Practice
and Procedure,” and contains rules that apply more broadly to various services within the Commission’s
jurisdiction. Accordingly, we are establishing new Subpart Z of Part 1, titling it “Communications
Assistance for Law Enforcement Act,” and are deleting Part 22, Subpart J; Part 24, Subpart J; Part 64,
Subpart V; and Part 64, Subpart W. Part 1, Subpart Z specifies that all carriers subject to CALEA must
comply with both the assistance capability requirements of CALEA section 103 and the systems security
and integrity requirements of CALEA section 105, and also lists the specific capability requirements
pertaining to cellular, PCS, and wireline carriers that are currently set forth in Parts 22, 24, and 64. These
rule changes are specified in Appendix B, infra.
H.

MISCELLANEOUS

83.
We recognize that certain questions raised by the outstanding Further Notice of Proposed
Rulemaking in this docket remain unresolved.190 We intend to address these matters expeditiously in a
future order. In addition, we recognize that parties may also seek clarification of our rules and
regulations. Our rules and precedent provide us with authority to issue such clarifications, amendments,
suspensions, or waivers both in response to petitions or on our own motion.191

189

First R&O, 20 FCC Rcd at 14993, para. 10.

190

See, e.g., Further Notice of Proposed Rulemaking, 20 FCC Rcd at 15013, para. 49 & n. 142 (seeking comment
“on the appropriateness of requiring something less than full CALEA compliance for certain classes or categories of
providers,” such as “small broadband access providers in rural areas,” and “private broadband networks used by
schools, libraries, and research institutions.”
191

See 47 C.F.R. §§ 1.2-3.

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IV. PROCEDURAL ISSUES
1.

Ex Parte Rules

84.
This rulemaking shall be treated as a “permit-but-disclose” proceeding in accordance
with the Commission’s ex parte rules.192 Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentations must contain summaries of the substance of the presentations
and not merely a listing of the subjects discussed. More than a one or two sentence description of the
views and arguments presented is generally required.193 Other requirements pertaining to oral and written
presentations are set forth in section 1.1206(b) of the Commission’s rules.
85.
Documents in ET Docket No. 04-295 are available for public inspection and copying
during business hours at the FCC Reference Information Center, Portals II, 445 12th St. SW, Room CYA257, Washington, DC 20554. The documents may also be purchased from BCPI, telephone (202) 4885300, facsimile (202) 488-5563, TTY (202) 488-5562, e-mail [email protected].
2.

Accessible Formats

86.
To request materials in accessible formats for people with disabilities (Braille, large print,
electronic files, audio format), send an e-mail to [email protected] or call the Consumer & Governmental
Affairs Bureau at (202) 418-0531 (voice), (202) 418-7365 (TTY).
3.

Regulatory Flexibility Analysis

87.
As required by the Regulatory Flexibility Act, see 5 U.S.C. § 603, the Commission has
prepared a Final Regulatory Flexibility Analysis (FRFA) of the possible significant economic impact on
small entities of the policies and rules addressed in the Second R&O. The FRFA is set forth in Appendix
C.
4.

Paperwork Reduction Analysis

88.
Final Paperwork Reduction Analysis. The Second R&O contains new information
collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It
will be submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of
the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new or
modified information collection requirements contained in this proceeding.
V. ORDERING CLAUSES
89.
Accordingly, IT IS ORDERED that that pursuant to sections 1, 4(i), 7(a), 229, 301, 303,
332, and 410 of the Communications Act of 1934, as amended, and section 102 of the Communications
Assistance for Law Enforcement Act, 18 U.S.C. § 1001, the Second Report and Order and Memorandum
Opinion and Order in ET Docket No. 04-295 IS ADOPTED.

192

47 C.F.R. §§ 1.200 et seq.

193

47 C.F.R. § 1.1206(b)(2).

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90.
IT IS FURTHER ORDERED that Parts 1, 22, 24, and 64 of the Commission’s Rules, 47
C.F.R. Parts 1, 22, 24, and 64, are amended as set forth in Appendix B. The requirements of the Second
Report and Order shall become effective 30 days after publication in the Federal Register. This Second
Report and Order contains information collection requirements subject to the Paperwork Reduction Act
of 1995 (PRA), Public Law 104-13, that are not effective until approved by the Office of Management
and Budget. The Federal Communications Commission will publish a document in the Federal Register
by the OMB announcing the effective date of those rules.
91.
IT IS FURTHER ORDERED that the “Petition for Reconsideration and for Clarification
of the CALEA Applicability Order” filed by the United States Telecom Association is granted to the
extent indicated herein and is denied in all other respects.
92.
IT IS FURTHER ORDERED that the Commission’s Consumer and Governmental
Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Second Report and Order
and Memorandum Opinion and Order, including the Final Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration.
FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch
Secretary

Federal Communications Commission
APPENDIX A
LIST OF COMMENTERS
Comments to Notice in ET Docket No. 04-295:
Comments
AMA TechTel Communications, LLC
American Civil Liberties Union
BellSouth Corporation
Cellular Telecommunications & Internet
Association
Cingular Wireless LLC
Coalition for Reasonable Rural Broadband
CALEA Compliance
Corr Wireless Communications, L.L.C
EarthLink, Inc.
EDUCAUSE Coalition
Electronic Frontier Foundation
European Telecommunications Standards Institute
Fiducianet, Inc.
Global Crossing North America, Inc.
GVNW Consulting, Inc.
Industry and Public Interest Joint Commenters
Level 3 Communications, LLC
MaineStreet Communications, Inc.
Motorola, Inc.
National Cable & Telecommunications
Association
National Telecommunications Cooperative
Association
New York Attorney General Eliot Spitzer
Nextel Communications, Inc.
Nuvio Corporation
Organization for the Promotion and Advancement
of Small Telecommunications Companies
Rural Cellular Association
Rural Telecommunications Group, Inc.
Rural Telecommunications Providers
Satellite Industry Association
SBC Communications Inc.
Smithville Telephone Company
Subsentio, Inc.
Telcom Consulting Associates, Inc.
Telecommunications Industry Association
T-Mobile USA, Inc.
Texas Department of Public Safety
United States Department of Justice
United States Internet Service Provider
Association
United States Telecom Association
42

Abbreviation
AMA TechTel
ACLU
BellSouth
CTIA
Cingular
CRRBCC
Corr
EarthLink
EDUCAUSE
EFF
ETSI
Fiducianet
Global Crossing
GVNW
I&P
Level 3
MaineStreet
Motorola
NCTA
NTCA
NYAG
Nextel
Nuvio
OPASTCO
RCA
RTG
RTP
SIA
SBC
STC
Subsentio
TCA
TIA
T-Mobile
Texas DPS
DOJ
US ISPA
USTelecom

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Federal Communications Commission
VeriSign, Inc.
Verizon
Vonage Holdings Corp.
Yahoo! Inc.

VeriSign
Verizon
Vonage
Yahoo!

Reply Comments to Notice in ET Docket No. 04-295:
Replies
BellSouth Corporation
Cellular Telecommunications & Internet
Association
EarthLink, Inc.
Electronic Frontier Foundation
Fiducianet, Inc.
Global Crossing North America, Inc.
Industry and Public Interest Joint Commenters
Level 3 Communications, LLC
MetroPCS Communications, Inc.
National Cable & Telecommunications
Association
National Telecommunications Cooperative
Association
Nextel Communications, Inc.
Rural Iowa Independent Telephone Association
Satellite Industry Association
SBC Communications Inc.
Southern LINC
Sprint Corporation
Telecommunications Industry Association
T-Mobile USA, Inc.
United Power Line Council
United States Cellular Corporation
United States Department of Justice
United States Internet Service Provider
Association
Office of Advocacy, United States Small Business
Administration
United States Telecom Association
United Utilities, Inc., et al.
Verint Systems, Inc.
VeriSign, Inc.
Verizon
Vonage Holdings Corp.

Abbreviation
BellSouth
CTIA
EarthLink
EFF
Fiducianet
Global Crossing
I&P
Level 3
MetroPCS
NCTA
NTCA
Nextel
RIITA
SIA
SBC
Southern LINC
Sprint
TIA
T-Mobile
UPLC
USCC
DOJ
US ISPA
Advocacy
USTA
United Utilities
Verint
VeriSign
Verizon
Vonage

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Comments/Oppositions to United States Telecom Association’s Petition for Reconsideration and
Clarification in ET Docket No. 04-295
Oppositions and Comments
8x8, Inc., Acorn Active Media, American Library
Association, Association for Community Networking,
Association of College and Research Libraries, Association
of Research Libraries, Center for Democracy & Technology,
Champaign Urbana Community Wireless Network,
Electronic Frontier Foundation, Information Technology
Association of America, Texas Internet Service Providers
Association, Voice on the Net (VON) Coalition
American Civil Liberties Union
CTIA – The Wireless Association
Global Crossing North America, Inc.
National Telecommunications Cooperative Association and
the Organization for the Promotion and Advancement of
Small Telecommunications Companies
Satellite Industry Association
Telecommunications Industry Association
United States Department of Justice
VeriSign, Inc.

Abbreviation
8x8

ACLU
CTIA
Global Crossing
NTCA/OPASTCO

SIA
TIA
DOJ
VeriSign

Replies to Comments/Oppositions to United States Telecom Association’s Petition for
Reconsideration and Clarification in ET Docket No. 04-295
Replies
American Library Association, Association of Research
Libraries, Association of College and Research Libraries
United States Telecom Association
Computer & Communications Industry Association,
Information Technology Association of America, Acorn
Active Media, Association for Community Networking,
Center for Democracy & Technology, Center for Financial
Privacy and Human Rights, Champaign Urbana Community
Wireless Network, Electronic Frontier Foundation, Texas
Internet Service Providers Association
Information Technology Industry Council
United Power Line Council
US LEC Acquisition Co.
VeriSign, Inc.

Abbreviation
ALA
USTelecom
CCIA

ITI
UPLC
US LEC
VeriSign

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APPENDIX B
FINAL RULES
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR
Parts 1, 22, 24, and 64 as follows:
A. Part 1 of the Code of Federal Regulations is amended as follows:
PART 1- PRACTICE AND PROCEDURE
1.

The authority for Part 1 continues to read as follows:

Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j), 155, 157, 225, and 303(r).
2.

Subpart Z is added to read as follows:

Subpart Z – Communications Assistance for Law Enforcement Act
1.20000 Purpose.
1.20001 Scope.
1.20002 Definitions.
1.20003 Policies and procedures for employee supervision and control.
1.20004 Maintaining secure and accurate records.
1.20005 Submission of policies and procedures and Commission review.
1.20006 Assistance capability requirements.
1.20007 Additional assistance capability requirements for wireline, cellular, and PCS
telecommunications carriers.
§ 1.20000 Purpose.
Pursuant to the Communications Assistance for Law Enforcement Act (CALEA), Public Law 103-414,
108 Stat. 4279 (1994) (codified as amended in sections of 18 U.S.C. and 47 U.S.C.), this subpart contains
rules that require a telecommunications carrier to:
(a) ensure that any interception of communications or access to call-identifying information effected
within its switching premises can be activated only in accordance with appropriate legal authorization,
appropriate carrier authorization, and with the affirmative intervention of an individual officer or
employee of the carrier acting in accordance with regulations prescribed by the Commission; and
(b) implement the assistance capability requirements of CALEA section 103, 47 U.S.C. § 1002, to
ensure law enforcement access to authorized wire and electronic communications or call-identifying
information.
§ 1.20001 Scope.
The definitions included in this subchapter shall be used solely for the purpose of implementing CALEA
requirements.
§ 1.20002 Definitions.
(a) Appropriate legal authorization. The term appropriate legal authorization means:
(1) A court order signed by a judge or magistrate authorizing or approving interception of wire or
electronic communications; or
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(2) Other authorization, pursuant to 18 U.S.C. 2518(7), or any other relevant federal or state statute.
(b) Appropriate carrier authorization. The term appropriate carrier authorization means the policies
and procedures adopted by telecommunications carriers to supervise and control officers and employees
authorized to assist law enforcement in conducting any interception of communications or access to callidentifying information.
(c) Appropriate authorization. The term appropriate authorization means both appropriate legal
authorization and appropriate carrier authorization.
(d) LEA. The term LEA means law enforcement agency; e.g., the Federal Bureau of Investigation or a
local police department.
(e) Telecommunications carrier. The term telecommunications carrier includes:
(1) A person or entity engaged in the transmission or switching of wire or electronic communications as
a common carrier for hire;
(2) A person or entity engaged in providing commercial mobile service (as defined in section 332(d) of
the Communications Act of 1934 (47 U.S.C. 332(d))); or
(3) A person or entity that the Commission has found is engaged in providing wire or electronic
communication switching or transmission service such that the service is a replacement for a substantial
portion of the local telephone exchange service and that it is in the public interest to deem such a person
or entity to be a telecommunications carrier for purposes of CALEA.
§ 1.20003 Policies and procedures for employee supervision and control.
A telecommunications carrier shall:
(a) Appoint a senior officer or employee responsible for ensuring that any interception of
communications or access to call-identifying information effected within its switching premises can be
activated only in accordance with a court order or other lawful authorization and with the affirmative
intervention of an individual officer or employee of the carrier.
(b) Establish policies and procedures to implement paragraph (a) of this section, to include:
(1) A statement that carrier personnel must receive appropriate legal authorization and appropriate
carrier authorization before enabling law enforcement officials and carrier personnel to implement the
interception of communications or access to call-identifying information;
(2) An interpretation of the phrase "appropriate authorization" that encompasses the definitions of
appropriate legal authorization and appropriate carrier authorization, as used in paragraph (b)(1) of this
section;
(3) A detailed description of how long it will maintain its records of each interception of
communications or access to call-identifying information pursuant to § 1.20004;
(4) In a separate appendix to the policies and procedures document:
(i) The name and a description of the job function of the senior officer or employee appointed pursuant
to paragraph (a) of this section; and
(ii) Information necessary for law enforcement agencies to contact the senior officer or employee
appointed pursuant to paragraph (a) of this section or other CALEA points of contact on a seven days a
week, 24 hours a day basis.
(c) Report to the affected law enforcement agencies, within a reasonable time upon discovery:
(1) Any act of compromise of a lawful interception of communications or access to call-identifying
information to unauthorized persons or entities; and
(2) Any act of unlawful electronic surveillance that occurred on its premises.
§ 1.20004 Maintaining secure and accurate records.
(a) A telecommunications carrier shall maintain a secure and accurate record of each interception of
communications or access to call-identifying information, made with or without appropriate
authorization, in the form of single certification.
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(1) This certification must include, at a minimum, the following information:
(i) The telephone number(s) and/or circuit identification numbers involved;
(ii) The start date and time that the carrier enables the interception of communications or access to call
identifying information;
(iii) The identity of the law enforcement officer presenting the authorization;
(iv) The name of the person signing the appropriate legal authorization;
(v) The type of interception of communications or access to call-identifying information (e.g., pen
register, trap and trace, Title III, FISA); and
(vi) The name of the telecommunications carriers' personnel who is responsible for overseeing the
interception of communication or access to call-identifying information and who is acting in accordance
with the carriers' policies established under § 1.20003.
(2) This certification must be signed by the individual who is responsible for overseeing the
interception of communications or access to call-identifying information and who is acting in accordance
with the telecommunications carrier's policies established under § 1.20003. This individual will, by
his/her signature, certify that the record is complete and accurate.
(3) This certification must be compiled either contemporaneously with, or within a reasonable period of
time after the initiation of the interception of the communications or access to call-identifying
information.
(4) A telecommunications carrier may satisfy the obligations of paragraph (a) of this section by
requiring the individual who is responsible for overseeing the interception of communication or access to
call-identifying information and who is acting in accordance with the carriers' policies established under §
1.20003 to sign the certification and append the appropriate legal authorization and any extensions that
have been granted. This form of certification must at a minimum include all of the information listed in
paragraph (a) of this section.
(b) A telecommunications carrier shall maintain the secure and accurate records set forth in paragraph
(a) for a reasonable period of time as determined by the carrier.
(c) It is the telecommunications carrier's responsibility to ensure its records are complete and accurate.
(d) Violation of this rule is subject to the penalties of § 1.20008.
§ 1.20005 Submission of policies and procedures and Commission review.
(a) Each telecommunications carrier shall file with the Commission the policies and procedures it uses
to comply with the requirements of this subchapter. These policies and procedures shall be filed with the
Federal Communications Commission within 90 days of the effective date of these rules, and thereafter,
within 90 days of a carrier's merger or divestiture or a carrier's amendment of its existing policies and
procedures.
(b) The Commission shall review each telecommunications carrier's policies and procedures to
determine whether they comply with the requirements of § 1.20003 and § 1.20004.
(1) If, upon review, the Commission determines that a telecommunications carrier's policies and
procedures do not comply with the requirements established under § 1.20003 and § 1.20004, the
telecommunications carrier shall modify its policies and procedures in accordance with an order released
by the Commission.
(2) The Commission shall review and order modification of a telecommunications carrier's policies and
procedures as may be necessary to insure compliance by telecommunications carriers with the
requirements of the regulations prescribed under § 1.20003 and § 1.20004.
§ 1.20006 Assistance capability requirements.
(a) Telecommunications carriers shall provide to a Law Enforcement Agency the assistance capability
requirements of CALEA regarding wire and electronic communications and call identifying information,
see 47 U.S.C. 1002. A carrier may satisfy these requirements by complying with publicly available
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technical requirements or standards adopted by an industry association or standard-setting organization,
such as J-STD-025 (current version), or by the Commission.
(b) Telecommunications carriers shall consult, as necessary, in a timely fashion with manufacturers of
its telecommunications transmission and switching equipment and its providers of telecommunications
support services for the purpose of ensuring that current and planned equipment, facilities, and services
comply with the assistance capability requirements of 47 U.S.C. 1002.
(c) A manufacturer of telecommunications transmission or switching equipment and a provider of
telecommunications support service shall, on a reasonably timely basis and at a reasonable charge, make
available to the telecommunications carriers using its equipment, facilities, or services such features or
modifications as are necessary to permit such carriers to comply with the assistance capability
requirements of 47 U.S.C. 1002.
§1.20007 Additional assistance capability requirements for wireline, cellular, and PCS
telecommunications carriers.
(a) Definitions.
(1) Call identifying information. Call identifying information means 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 carrier.
Call identifying information is "reasonably available" to a carrier if it is present at an intercept access
point and can be made available without the carrier being unduly burdened with network modifications.
(2) Collection function. The location where lawfully authorized intercepted communications and callidentifying information is collected by a law enforcement agency (LEA).
(3) Content of subject-initiated conference calls. Capability that permits a LEA to monitor the content
of conversations by all parties connected via a conference call when the facilities under surveillance
maintain a circuit connection to the call.
(4) Destination. A party or place to which a call is being made (e.g., the called party).
(5) Dialed digit extraction. Capability that permits a LEA to receive on the call data channel a digits
dialed by a subject after a call is connected to another carrier's service for processing and routing.
(6) Direction. A party or place to which a call is re-directed or the party or place from which it came,
either incoming or outgoing (e.g., a redirected-to party or redirected-from party).
(7) IAP. Intercept access point is a point within a carrier's system where some of the communications
or call-identifying information of an intercept subject's equipment, facilities, and services are accessed.
(8) In-band and out-of-band signaling. Capability that permits a LEA to be informed when a network
message that provides call identifying information (e.g., ringing, busy, call waiting signal, message light)
is generated or sent by the IAP switch to a subject using the facilities under surveillance. Excludes signals
generated by customer premises equipment when no network signal is generated.
(9) J-STD-025. The standard, including the latest version, developed by the Telecommunications
Industry Association (TIA) and the Alliance for Telecommunications Industry Solutions (ATIS) for
wireline, cellular, and broadband PCS carriers. This standard defines services and features to support
lawfully authorized electronic surveillance, and specifies interfaces necessary to deliver intercepted
communications and call-identifying information to a LEA. Subsequently, TIA and ATIS published JSTD-025-A and J-STD-025-B.
(10) Origin. A party initiating a call (e.g., a calling party), or a place from which a call is initiated.
(11) Party hold, join, drop on conference calls. Capability that permits a LEA to identify the parties
to a conference call conversation at all times.
(12) Subject-initiated dialing and signaling information. Capability that permits a LEA to be
informed when a subject using the facilities under surveillance uses services that provide call identifying
information, such as call forwarding, call waiting, call hold, and three-way calling. Excludes signals
generated by customer premises equipment when no network signal is generated.
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(13) Termination. A party or place at the end of a communication path (e.g. the called or callreceiving party, or the switch of a party that has placed another party on hold).
(14) Timing information. Capability that permits a LEA to associate call-identifying information with
the content of a call. A call-identifying message must be sent from the carrier's IAP to the LEA's
Collection Function within eight seconds of receipt of that message by the IAP at least 95% of the time,
and with the call event time-stamped to an accuracy of at least 200 milliseconds.
(b) In addition to the requirements in section 1.20006, wireline, cellular, and PCS telecommunications
carriers shall provide to a LEA the assistance capability requirements regarding wire and electronic
communications and call identifying information covered by J-STD-025 (current version), and, subject to
the definitions in this section, may satisfy these requirements by complying with J-STD-025 (current
version), or by another means of their own choosing. These carriers also shall provide to a LEA the
following capabilities:
(1) Content of subject-initiated conference calls;
(2) Party hold, join, drop on conference calls;
(3) Subject-initiated dialing and signaling information;
(4) In-band and out-of-band signaling;
(5) Timing information;
(6) Dialed digit extraction, with a toggle feature that can activate/deactivate this capability.
§ 1.20008 Penalties.
In the event of a telecommunications carrier's violation of this subchapter, the Commission shall
enforce the penalties articulated in 47 U.S.C. 503(b) of the Communications Act of 1934 and 47 CFR 1.8.
PART 22- PUBLIC MOBILE SERVICES
1.

The authority for Part 22 continues to read as follows:

Authority: 47 U.S.C. 154, 222, 303, 309, and 332.
2.

Part 22, Subpart J, is amended by removing Sections 22.1100-22.1103.

PART 24- PERSONAL COMMUNICATIONS SERVICES
1.

The authority for Part 24 continues to read as follows:

Authority: 47 U.S.C. 154, 301, 302, 303, 309, and 332.
2.

Part 24, Subpart J, is amended by removing Sections 24.900- 24.903.

PART 64 – MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
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The authority for Part 64 continues to read as follows:

Authority: 47 U.S.C. 154, 254(K); secs. 403(b)(2)(B), (c), Pub. L. 104-104, 110 Stat. 56. Interpret or
apply 47 U.S.C. 201, 218, 222, 225, 226, 228, and 254(k) unless otherwise noted.
2.

Part 64, Subparts V and W, are amended by removing Sections 64.2100-64.2106 and
64.2200-2203.

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APPENDIX C
REGULATORY FLEXIBILITY ANALYSIS
I.

FINAL REGULATORY FLEXIBILITY ANALYSIS

As required by the Regulatory Flexibility Act of 1980, as amended (RFA),1 an Initial Regulatory
Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking (Notice) in this
proceeding.2 The Commission sought written public comment on the proposals in the Notice, including
comment on the IRFA.3 The comments received are discussed below, except to the extent that they were
previously addressed in the Final Regulatory Flexibility Analysis (FRFA) attached to the First Report and
Order (First R&O) in this proceeding.4 The current FRFA, which conforms to the RFA,5 pertains only to the
Second Report and Order (Second R&O) in this proceeding. The companion Memorandum Opinion and
Order (MO&O) does not adopt rules, but rather, inter alia, denies a petition to change a Commission rule.

Need for, and Objectives of, the Rules

2.
Advances in technology, most notably the introduction of digital transmission and processing
techniques, and the proliferation of Internet services such as broadband access and Voice over Internet
Protocol (VoIP), have challenged the ability of law enforcement agencies (LEAs) to conduct lawful
electronic surveillance. In light of these difficulties and other outstanding issues associated with the
implementation of the 1994 Communications Assistance for Law Enforcement Act (CALEA), the
Department of Justice, the Federal Bureau of Investigation, and the Drug Enforcement Administration filed a
joint petition for expedited rulemaking in March 2004, asking the Commission to address and resolve these
issues. The First R&O concluded that CALEA applies to facilities-based broadband Internet access
providers and providers of interconnected VoIP service, and established a compliance deadline of May 14,
2007 for these providers.6
3.

In the Second R&O, we require that facilities-based broadband Internet access providers and
providers of interconnected VoIP submit monitoring reports to ensure their CALEA compliance by the
May 14, 2007 deadline established by the First R&O. More generally, we require that telecommunications
carriers comply with CALEA by finding that sections 107(c) and 109(b) of CALEA provide only limited and
temporary relief from compliance requirements, and by finding that extension of the compliance deadline for
capabilities required by CALEA section 103 is available only for facilities and services deployed prior to
October 25, 1998 under the express terms of the statute. We also conclude that, in addition to the
enforcement remedies through the courts available to LEAs under CALEA section 108, we may take
1

See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601-12, has been amended by the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996).
2

Communications Assistance for Law Enforcement Act and Broadband Access and Services, ET Docket No. 04295, RM-10865, Notice of Proposed Rulemaking and Declaratory Ruling, 19 FCC Rcd 15676, 15751-60, App. B
(2004) (Notice).
3

Id.

Communications Assistance for Law Enforcement Act and Broadband Access and Services, First Report and Order
and Further Notice of Proposed Rulemaking, ET Docket No. 04-295, RM-10865, 20 FCC Rcd 14989, 1502115036, App. C (2005) (First R&O).
5

See 5 U.S.C. § 604. Comments on small business issues that were raised in response to the Notice, rather than to
the IRFA itself, are also referenced herein.

First R&O, 20 FCC Rcd at 14989-14990, paras. 1-3.
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separate enforcement action under section 229(a) of the Communications Act against carriers that fail to
comply with CALEA. Moreover, we conclude that carriers must generally pay for CALEA development and
implementation costs incurred after January 1, 1995 (unless their costs are reimbursed in response to a
CALEA section 109(b) petition), but we acknowledge that they may recover costs from other sources, such
as from their subscribers.
B.

Summary of Significant Issues Raised by Public Comments in Response to the IRFA

4.
In this section, we respond to commenters who filed directly in response to the IRFA. To the
extent we received comments raising general small business concerns during this proceeding, those
comments are discussed throughout the Second R&O.7
5.

The National Telecommunications Cooperative Association (NTCA) and the Office of
Advocacy, U.S. Small Business Administration (Advocacy) filed comments directly in response to the
IRFA. NTCA and Advocacy both generally contend that the RFA requires that the Commission consider
less burdensome alternatives appropriate to the size of the covered entities.8 These comments were partially
addressed in our previous First R&O in this proceeding;9 therefore, in this FRFA, we respond only to those
arguments that are relevant to the Second R&O. In particular, we respond to NTCA’s argument10 that we
failed to include the availability of CALEA section 107(c) extension petitions as part of the IRFA and to
Advocacy’s arguments11 that the IRFA did not discuss all the alternatives available to small entities,
including petitions for extensions under CALEA sections 107(c) and 109(b) and use of trusted third parties
(TTPs).

6.
We reject NTCA’s and Advocacy’s arguments that the Commission failed to adequately
consider these issues. While we recognize that we did not specifically list them in the IRFA, the IRFA
combined with the Notice appropriately identified the ways in which the Commission could lessen the
regulatory burdens on small businesses in compliance with our RFA obligations. First, we generally
discussed in the Notice the possibility of an exemption from CALEA compliance for small businesses that
provide wireless broadband Internet access to rural areas.12 Second, with regard to CALEA sections 107(c)
and 109(b) compliance extension petitions, we devoted an entire section of the Notice, spanning 24
paragraphs, to these issues.13 Although we proposed to restrict the availability of compliance extensions
under section 107(c)14 and noted that there is a significant burden on section 109(b) petitioners,15 we
thoroughly considered the potential impact of those proposals on small businesses, but concluded that it
would be inconsistent with the CALEA statute to make exceptions for small businesses with respect to
section 107(c) and section 109(b) petitions. Third, with respect to TTPs, we devoted a subsection of the
Notice, spanning eight paragraphs, to that issue. We noted therein that there may be some tension between
relying on a TTP model and “safe harbor” standards, but that TTPs had the potential to simplify or ease the
7

See Second R&O, paras. 16, 26, 36, 56, and 78.

NTCA Reply Comments at 3; Advocacy Reply Comments at 1-4.

First R&O at 20 FCC Rcd 15022-23, App. C.

NTCA Comments at 7.

Advocacy Reply Comments at 7-8.

See Notice, 19 FCC Rcd at 15704-05, para 49.

Id. 19 FCC Rcd at 15720-30, paras. 87-110.

Id. 19 FCC Rcd at 15720, para. 87.

Id. 19 FCC Rcd at 15728-29, paras. 104-06.
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burden on carriers and manufacturers in providing packet content and call-identifying information to LEAs.16
Further, we noted that external TTP systems “might provide economies of scale for small carriers.”17
Therefore, we believe that a revised IRFA is not necessary on any of these issues.
C.

Description and Estimate of the Number of Small Entities to Which Rules Will Apply

7.
The RFA directs agencies to provide a description of and, where feasible, an estimate of the
number of small entities that may be affected by the proposed rules.18 The RFA generally defines the term
“small entity” as having the same meaning as the terms “small business,” “small organization,” and “small
governmental jurisdiction.”19 In addition, the term “small business” has the same meaning as the term
“small business concern” under the Small Business Act.20 A small business concern is one which: (1) is
independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration (SBA).21
1.

Telecommunications Service Entities
a.

Wireline Carriers and Service Providers

8.
Small Incumbent Local Exchange Carriers (LECs). We have included small incumbent LECs
present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the
pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer
employees), and “is not dominant in its field of operation.”22 Advocacy contends that, for RFA purposes,
small incumbent LECs are not dominant in their field of operation because any such dominance is not
“national” in scope.23 We have therefore included small incumbent LECs in this RFA analysis, although we
emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA
contexts.
9.
Incumbent Local Exchange Carriers. Neither the Commission nor the SBA has developed a
small business size standard specifically for incumbent local exchange services. The appropriate size
standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard,

Id. 19 FCC Rcd at 15714-16, paras. 69-76.

Id. 19 FCC Rcd at 15715, para. 72.

5 U.S.C. §§ 603(b)(3), 604(a)(3).

5 U.S.C. § 601(6).

5 U.S.C. § 601(3) (incorporating by reference the definition of “small business concern” in the Small Business
Act, 15 U.S.C. § 632). Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business applies “unless an
agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity
for public comment, establishes one or more definitions of such terms which are appropriate to the activities of the
agency and publishes such definitions(s) in the Federal Register.”

15 U.S.C. § 632.

Letter from Jere W. Glover, Chief Counsel for Advocacy, to William E. Kennard, Chairman, FCC (May 27,
1999). The Small Business Act contains a definition of “small-business concern,” which the RFA incorporates into
its own definition of “small business.” See 15 U.S.C. § 632(a) (Small Business Act); 5 U.S.C. § 601(3) (RFA).
SBA regulations interpret “small business concern” to include the concept of dominance on a national basis. See 13
C.F.R. § 121.102(b).
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such a business is small if it has 1,500 or fewer employees.24 According to Commission data,25 1,303
carriers have reported that they are engaged in the provision of incumbent local exchange services. Of these
1,303 carriers, an estimated 1,020 have 1,500 or fewer employees and 283 have more than 1,500 employees.
Consequently, the Commission estimates that most providers of incumbent local exchange service are small
businesses that may be affected by our action. In addition, limited preliminary census data for 2002 indicate
that the total number of wired communications carriers increased approximately 34 percent from 1997 to
2002.26

10.
Competitive Local Exchange Carriers, Competitive Access Providers (CAPs), “Shared-Tenant
Service Providers,” and “Other Local Service Providers.” Neither the Commission nor the SBA has
developed a small business size standard specifically for these service providers. The appropriate size
standard under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard,
such a business is small if it has 1,500 or fewer employees.27 According to Commission data,28 769 carriers
have reported that they are engaged in the provision of either competitive access provider services or
competitive local exchange carrier services. Of these 769 carriers, an estimated 676 have 1,500 or fewer
employees and 93 have more than 1,500 employees. In addition, 12 carriers have reported that they are
“Shared-Tenant Service Providers,” and all 12 are estimated to have 1,500 or fewer employees. In addition,
39 carriers have reported that they are “Other Local Service Providers.” Of the 39, an estimated 38 have
1,500 or fewer employees and one has more than 1,500 employees. Consequently, the Commission
estimates that most providers of competitive local exchange service, competitive access providers, “SharedTenant Service Providers,” and “Other Local Service Providers” are small entities that may be affected by
our action. In addition, limited preliminary census data for 2002 indicate that the total number of wired
communications carriers increased approximately 34 percent from 1997 to 2002.29
11.
Payphone Service Providers (PSPs). Neither the Commission nor the SBA has developed a
small business size standard specifically for payphone services providers. The appropriate size standard
under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees.30 According to Commission data,31 654 carriers have
reported that they are engaged in the provision of payphone services. Of these, an estimated 652 have 1,500
or fewer employees and two have more than 1,500 employees. Consequently, the Commission estimates that
the majority of payphone service providers are small entities that may be affected by our action. In addition,

13 C.F.R. § 121.201, NAICS code 517110.

FCC, Wireline Competition Bureau, Industry Analysis and Technology Division, “Trends in Telephone Service”
at Table 5.3, page 5-5 (June 2004) (“Trends in Telephone Service”).

See U.S. Census Bureau, 2002 Economic Census, Industry Series: “Information,” Table 2, Comparative Statistics
for the United States (1997 NAICS Basis): 2002 and 1997, NAICS code 513310 (issued Nov. 2004). The
preliminary data indicate that the total number of “establishments” increased from 20,815 to 27,891. In this context,
the number of establishments is a less helpful indicator of small business prevalence than is the number of “firms,”
because the latter number takes into account the concept of common ownership or control.

13 C.F.R. § 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.

See supra n.26.

13 C.F.R. § 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.
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limited preliminary census data for 2002 indicate that the total number of wired communications carriers
increased approximately 34 percent from 1997 to 2002.32

12.
Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a small
business size standard specifically for providers of interexchange services. The appropriate size standard
under SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees.33 According to Commission data,34 316 carriers have
reported that they are engaged in the provision of interexchange service. Of these, an estimated 292 have
1,500 or fewer employees and 24 have more than 1,500 employees. Consequently, the Commission
estimates that the majority of IXCs are small entities that may be affected by our action. In addition, limited
preliminary census data for 2002 indicate that the total number of wired communications carriers increased
approximately 34 percent from 1997 to 2002.35
13.
Operator Service Providers (OSPs). Neither the Commission nor the SBA has developed a
small business size standard specifically for operator service providers. The appropriate size standard under
SBA rules is for the category Wired Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees.36 According to Commission data,37 23 carriers have reported that
they are engaged in the provision of operator services. Of these, an estimated 20 have 1,500 or fewer
employees and three have more than 1,500 employees. Consequently, the Commission estimates that the
majority of OSPs are small entities that may be affected by our action. In addition, limited preliminary
census data for 2002 indicate that the total number of wired communications carriers increased
approximately 34 percent from 1997 to 2002.38
14.
Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small
business size standard specifically for prepaid calling card providers. The appropriate size standard under
SBA rules is for the category Telecommunications Resellers. Under that size standard, such a business is
small if it has 1,500 or fewer employees.39 According to Commission data,40 89 carriers have reported that
they are engaged in the provision of prepaid calling cards. Of these, 88 are estimated to have 1,500 or fewer
employees and one has more than 1,500 employees. Consequently, the Commission estimates that all or the
majority of prepaid calling card providers are small entities that may be affected by our action.
b.

Wireless Telecommunications Service Providers

15.
Below, for those services subject to auctions, we note that, as a general matter, the number of
winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the
number of small businesses currently in service. Also, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated.
32

See supra n.26.

13 C.F.R. § 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.

See supra n.26.

13 C.F.R. § 121.201, NAICS code 517110.

“Trends in Telephone Service” at Table 5.3.

See supra n.26.

13 C.F.R. § 121.201, NAICS code 517310.

“Trends in Telephone Service” at Table 5.3.
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16.

Wireless Service Providers. The SBA has developed a small business size standard for wireless
firms within the two broad economic census categories of “Paging”41 and “Cellular and Other Wireless
Telecommunications.”42 Under both SBA categories, a wireless business is small if it has 1,500 or fewer
employees. For the census category of Paging, Census Bureau data for 1997 show that there were 1,320
firms in this category, total, that operated for the entire year.43 Of this total, 1,303 firms had employment of
999 or fewer employees, and an additional 17 firms had employment of 1,000 employees or more.44 Thus,
under this category and associated small business size standard, the majority of firms can be considered
small. For the census category Cellular and Other Wireless Telecommunications, Census Bureau data for
1997 show that there were 977 firms in this category, total, that operated for the entire year.45 Of this total,
965 firms had employment of 999 or fewer employees, and an additional 12 firms had employment of 1,000
employees or more.46 Thus, under this second category and size standard, the majority of firms can, again,
be considered small. In addition, limited preliminary census data for 2002 indicate that the total number of
paging providers decreased approximately 51 percent from 1997 to 2002.47 In addition, limited preliminary
census data for 2002 indicate that the total number of cellular and other wireless telecommunications carriers
increased approximately 321 percent from 1997 to 2002.48

17.
Cellular Licensees. The SBA has developed a small business size standard for wireless firms
within the broad economic census category “Cellular and Other Wireless Telecommunications.”49 Under
this SBA category, a wireless business is small if it has 1,500 or fewer employees. For the census category
Cellular and Other Wireless Telecommunications firms, Census Bureau data for 1997 show that there were
977 firms in this category, total, that operated for the entire year.50 Of this total, 965 firms had employment

13 C.F.R. § 121.201, NAICS code 517211.

13 C.F.R. § 121.201, NAICS code 517212.

U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 5, Employment Size of Firms
Subject to Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).

Id. The census data do not provide a more precise estimate of the number of firms that have employment of 1,500
or fewer employees; the largest category provided is “Firms with 1000 employees or more.”

U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 5, Employment Size of Firms
Subject to Federal Income Tax: 1997, NAICS code 513322 (issued October 2000).

See U.S. Census Bureau, 2002 Economic Census, Industry Series: “Information,” Table 2, Comparative Statistics
for the United States (1997 NAICS Basis): 2002 and 1997, NAICS code 513321 (issued Nov. 2004). The
preliminary data indicate that the total number of “establishments” decreased from 3,427 to 1,664. In this context,
the number of establishments is a less helpful indicator of small business prevalence than is the number of “firms,”
because the latter number takes into account the concept of common ownership or control.

See U.S. Census Bureau, 2002 Economic Census, Industry Series: “Information,” Table 2, Comparative Statistics
for the United States (1997 NAICS Basis): 2002 and 1997, NAICS code 513322 (issued Nov. 2004). The
preliminary data indicate that the total number of “establishments” increased from 2,959 to 9,511. In this context,
the number of establishments is a less helpful indicator of small business prevalence than is the number of “firms,”
because the latter number takes into account the concept of common ownership or control.

13 C.F.R. § 121.201, NAICS code 517212.

U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 5, Employment Size of Firms
Subject to Federal Income Tax: 1997, NAICS code 513322 (issued October 2000).
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of 999 or fewer employees, and an additional 12 firms had employment of 1,000 employees or more.51
Thus, under this category and size standard, the great majority of firms can be considered small. Also,
according to Commission data, 437 carriers reported that they were engaged in the provision of cellular
service, Personal Communications Service (PCS), or Specialized Mobile Radio (SMR) Telephony services,
which are placed together in the data.52 We have estimated that 260 of these are small, under the SBA small
business size standard.53

18.
Common Carrier Paging. The SBA has developed a small business size standard for wireless
firms within the broad economic census category, “Cellular and Other Wireless Telecommunications.”54
Under this SBA category, a wireless business is small if it has 1,500 or fewer employees. For the census
category of Paging, Census Bureau data for 1997 show that there were 1,320 firms in this category, total,
that operated for the entire year.55 Of this total, 1,303 firms had employment of 999 or fewer employees, and
an additional 17 firms had employment of 1,000 employees or more.56 Thus, under this category and
associated small business size standard, the majority of firms can be considered small.
19.
In the Paging Third Report and Order, we developed a small business size standard for “small
businesses” and “very small businesses” for purposes of determining their eligibility for special provisions
such as bidding credits and installment payments.57 A “small business” is an entity that, together with its
affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding
three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling
principals, has average gross revenues that are not more than $3 million for the preceding three years.58 The
SBA has approved these small business size standards.59 An auction of Metropolitan Economic Area
licenses closed on March 2, 2000.60 Of the 985 licenses auctioned, 440 were sold. Fifty-seven companies
claiming small business status won. Also, according to Commission data, 375 carriers reported that they
were engaged in the provision of paging and messaging services.61 Of those, we estimate that 370 are small,
under the SBA-approved small business size standard.

“Trends in Telephone Service” at Table 5.3.

Id.

13 C.F.R. § 121.201, NAICS code 517212.

U.S. Census Bureau, 1997 Economic Census, Subject Series: “Information,” Table 5, Employment Size of Firms
Subject to Federal Income Tax: 1997, NAICS code 513321 (issued October 2000).

Amendment of Part 90 of the Commission’s Rules to Provide for the Use of the 220-222 MHz Band by the Private
Land Mobile Radio Service, PR Docket No. 89-552, Third Report and Order and Fifth Notice of Proposed
Rulemaking, 12 FCC Rcd 10943, 11068-70, paras. 291-295, 62 FR 16004 (Apr. 3, 1997).

See Letter to Amy Zoslov, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications
Bureau, FCC, from A. Alvarez, Administrator, SBA (Dec. 2, 1998) (SBA Dec. 2, 1998 letter).

Id.

Public Notice, “929 and 931 MHz Paging Auction Closes,” DA 00-508, March 6, 2000.

“Trends in Telephone Service” at Table 5.3.
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20.

Wireless Communications Services. This service can be used for fixed, mobile, radiolocation,
and digital audio broadcasting satellite uses. The Commission established small business size standards for
the wireless communications services (WCS) auction.62 A “small business” is an entity with average gross
revenues of $40 million for each of the three preceding years, and a “very small business” is an entity with
average gross revenues of $15 million for each of the three preceding years. The SBA has approved these
small business size standards.63 The Commission auctioned geographic area licenses in the WCS service. In
the auction, there were seven winning bidders that qualified as “very small business” entities, and one that
qualified as a “small business” entity.

21.

Wireless Telephony. Wireless telephony includes cellular, personal communications services
(PCS), and specialized mobile radio (SMR) telephony carriers. As noted earlier, the SBA has developed a
small business size standard for “Cellular and Other Wireless Telecommunications” services.64 Under that
SBA small business size standard, a business is small if it has 1,500 or fewer employees.65 According to
Commission data, 437 carriers reported that they were engaged in the provision of wireless telephony.66 We
have estimated that 260 of these are small under the SBA small business size standard.

22.
Broadband Personal Communications Service. The broadband Personal Communications
Service (PCS) spectrum is divided into six frequency blocks designated A through F, and the Commission
has held auctions for each block. The Commission defined “small entity” for Blocks C and F as an entity
that has average gross revenues of $40 million or less in the three previous calendar years.67 For Block F, an
additional classification for “very small business” was added and is defined as an entity that, together with its
affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years.”68
These standards defining “small entity” in the context of broadband PCS auctions have been approved by the
SBA.69 No small businesses, within the SBA-approved small business size standards bid successfully for
licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C
auctions. A total of 93 small and very small business bidders won approximately 40 percent of the 1,479
licenses for Blocks D, E, and F.70 On March 23, 1999, the Commission re-auctioned 347 C, D, E, and F
Block licenses. There were 48 small business winning bidders. On January 26, 2001, the Commission
completed the auction of 422 C and F Broadband PCS licenses in Auction No. 35. Of the 35 winning
bidders in this auction, 29 qualified as “small” or “very small” businesses. Subsequent events, concerning
62

Public Notice, “Auction of Wireless Communications Services, Auction Notes and Filing Requirements for 128
WCS Licenses Scheduled for April 15, 1997,” DA 97-386, Feb. 21, 1997.

SBA Dec. 2, 1998 letter, supra n.58.

13 C.F.R. § 121.201, NAICS code 517212.

Id.

“Trends in Telephone Service” at Table 5.3.

See Amendment of Parts 20 and 24 of the Commission’s Rules – Broadband PCS Competitive Bidding and the
Commercial Mobile Radio Service Spectrum Cap, WT Docket No. 96-59, Report and Order, 11 FCC Rcd 7824, 61
FR 33859 (July 1, 1996) (PCS Order); see also 47 C.F.R. § 24.720(b).
68

See PCS Order, 11 FCC Rcd 7824.

See, e.g., Implementation of Section 309(j) of the Communications Act – Competitive Bidding, PP Docket No. 93253, Fifth Report and Order, 9 FCC Rcd 5332, 59 FR 37566 (July 22, 1994).

FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (rel. Jan. 14, 1997); see also
Amendment of the Commission’s Rules Regarding Installment Payment Financing for Personal Communications
Services (PCS) Licenses, WT Docket No. 97-82, Second Report and Order, 12 FCC Rcd 16436, 62 FR 55348 (Oct.
24, 1997).
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Auction 35, including judicial and agency determinations, resulted in a total of 163 C and F Block licenses
being available for grant.
c.

Satellite Telecommunications Service Providers

23.

Satellite telecommunications service providers include satellite operators and earth station
operators. The Commission has not developed a definition of small entities applicable to such operators.
Therefore, the applicable definition of small entity is generally the definition under the SBA rules applicable
to Satellite Telecommunications. This definition provides that a small entity is expressed as one with $13.5
million or less in annual receipts.71 1997 Census Bureau data indicate that, for 1997, 273 satellite
communication firms had annual receipts of under $10 million. In addition, 24 firms had receipts for that
year of $10 million to $24,999,990.
2.

Cable and OVS Operators

24.
Cable and Other Program Distribution. The Census Bureau defines this category as follows:
“This industry comprises establishments primarily engaged as third-party distribution systems for broadcast
programming. The establishments of this industry deliver visual, aural, or textual programming received
from cable networks, local television stations, or radio networks to consumers via cable or direct-to-home
satellite systems on a subscription or fee basis. These establishments do not generally originate programming
material.”72 The SBA has developed a small business size standard for Cable and Other Program
Distribution, which is: all such firms having $13.5 million or less in annual receipts.73 According to Census
Bureau data for 2002, there were a total of 1,191 firms in this category that operated for the entire year.74 Of
this total, 1,087 firms had annual receipts of under $10 million, and 43 firms had receipts of $10 million or
more but less than $25 million.75 Thus, under this size standard, the majority of firms can be considered
small.
25.
Cable Companies and Systems. The Commission has also developed its own small business size
standards, for the purpose of cable rate regulation. Under the Commission’s rules, a “small cable company”
is one serving 400,000 or fewer subscribers, nationwide.76 Industry data indicate that, of 1,076 cable
operators nationwide, all but eleven are small under this size standard.77 In addition, under the
Commission’s rules, a “small system” is a cable system serving 15,000 or fewer subscribers.78 Industry data
71

13 C.F.R. § 121.201, North American Industry Classification System (NAICS) code 517410.

U.S. Census Bureau, 2002 NAICS Definitions, “517510 Cable and Other Program Distribution”;
http://www.census.gov/epcd/naics02/def/NDEF517.HTM.

13 C.F.R. § 121.201, NAICS code 517510.

U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, Table 4, Receipts Size of Firms for the
United States: 2002, NAICS code 517510 (issued November 2005).

Id. An additional 61 firms had annual receipts of $25 million or more.

47 C.F.R. § 76.901(e). The Commission determined that this size standard equates approximately to a size
standard of $100 million or less in annual revenues. Implementation of Sections of the 1992 Cable Act: Rate
Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).

These data are derived from: R.R. Bowker, Broadcasting & Cable Yearbook 2006, “Top 25 Cable/Satellite
Operators,” pages A-8 & C-2 (data current as of June 30, 2005); Warren Communications News, Television &
Cable Factbook 2006, “Ownership of Cable Systems in the United States,” pages D-1805 to D-1857.

47 C.F.R. § 76.901(c).
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indicate that, of 7,208 systems nationwide, 6,139 systems have under 10,000 subscribers, and an additional
379 systems have 10,000-19,999 subscribers.79 Thus, under this second size standard, most cable systems
are small.

26.
Cable System Operators. The Communications Act of 1934, as amended, also contains a size
standard for small cable system operators, which is “a cable operator that, directly or through an affiliate,
serves in the aggregate fewer than 1 percent of all subscribers in the United States and is not affiliated with
any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.”80 The
Commission has determined that an operator serving fewer than 677,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual revenues of all its affiliates, do not
exceed $250 million in the aggregate.81 Industry data indicate that, of 1,076 cable operators nationwide, all
but ten are small under this size standard.82 We note that the Commission neither requests nor collects
information on whether cable system operators are affiliated with entities whose gross annual revenues
exceed $250 million,83 and therefore we are unable to estimate more accurately the number of cable system
operators that would qualify as small und
27.

Open Video Services. Open Video Service (OVS) systems provide subscription services.84 The
SBA has created a small business size standard for Cable and Other Program Distribution.85 This standard
provides that a small entity is one with $12.5 million or less in annual receipts. The Commission has
certified a large number of OVS operators, and some of these are currently providing service.86 Affiliates of
Residential Communications Network, Inc. (RCN) received approval to operate OVS systems in New York
City, Boston, Washington, D.C., and other areas. RCN has sufficient revenues to assure that it does not
qualify as a small business entity. Little financial information is available for the other entities that are
authorized to provide OVS. Given this fact, the Commission concludes that those entities might qualify as
small businesses, and therefore may be affected by the rules and policies adopted herein.
3.

Internet and other Information Service Providers

28.
Internet Service Providers. The SBA has developed a small business size standard for Internet
Service Providers (ISPs). ISPs “provide clients access to the Internet and generally provide related services
such as web hosting, web page designing, and hardware or software consulting related to Internet
79

Warren Communications News, Television & Cable Factbook 2006, “U.S. Cable Systems by Subscriber Size,”
page F-2 (data current as of Oct. 2005). The data do not include 718 systems for which classifying data were not
available.

47 U.S.C. § 543(m)(2); see 47 C.F.R. § 76.901(f) & nn. 1-3.

47 C.F.R. § 76.901(f); see Public Notice, FCC Announces New Subscriber Count for the Definition of Small
Cable Operator, DA 01-158 (Cable Services Bureau, Jan. 24, 2001).

The Commission does receive such information on a case-by-case basis if a cable operator appeals a local
franchise authority’s finding that the operator does not qualify as a small cable operator pursuant to § 76.901(f) of
the Commission’s rules. See 47 C.F.R. § 76.909(b).

See 47 U.S.C. § 573.

13 C.F.R. § 121.201, NAICS code 518111.

See http://www.fcc.gov/mb/ovs/csovsarc.html and http://www.fcc.gov/mb/ovs/csovscer.html (each visited in
April 2006).
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connectivity.”87 Under the SBA size standard, such a business is small if it has average annual receipts of
$23 million or less.88 According to Census Bureau data for 2002, there were 2,529 firms in this category that
operated for the entire year. 89 Of these, 2,437 firms had annual receipts of under $10 million, and 47 firms
had receipts of $10 million or more but less then $25 million.90 Consequently, we estimate that the majority
of these firms are small entities that may be affected by our action.

29.

All Other Information Services. “This industry comprises establishments primarily engaged in
providing other information services (except new syndicates and libraries and archives).”91 Our action
pertains to VoIP services, which could be provided by entities that provide other services such as email,
online gaming, web browsing, video conferencing, instant messaging, and other, similar IP-enabled services.
The SBA has developed a small business size standard for this category; that size standard is $6.5 million or
less in average annual receipts.92 According to Census Bureau data for 1997, there were 195 firms in this
category that operated for the entire year.93 Of these, 172 had annual receipts of under $5 million, and an
additional nine firms had receipts of between $5 million and $9,999,999. Consequently, we estimate that the
majority of these firms are small entities that may be affected by our action.
D.

Description of Projected Reporting, Recordkeeping and Other Compliance
Requirements

30.
This Second R&O requires that facilities-based broadband Internet access providers and
providers of interconnected VoIP submit monitoring reports to the Commission to ensure their CALEA
compliance by the May 14, 2007 deadline established by the First R&O. The Second R&O also requires
that, within 90 days of its effective date, facilities-based broadband Internet access providers and providers
of interconnected VoIP who were newly-identified in the First R&O as subject to CALEA submit system
security statements to the Commission. Additionally, the Second R&O requires that each carrier that has a
CALEA section 107(c) petition on file with the Commission submit to us a letter documenting that the
carrier’s equipment, facility, or service qualifies for section 107(c) relief under the October 25, 1998 cutoff
for such relief. The Second R&O contains new information collection requirements subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. They will be submitted to the Office of Management and
Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the general public, and other Federal
agencies are invited to comment on the new or modified information collection requirements contained in
this proceeding.

U.S. Census Bureau, “2002 NAICS Definitions: 518111 Internet Service Providers” (Feb. 2004)
.

13 C.F.R. § 121.201, NAICS code 514191, “On-Line Information Services.”

U.S. Census Bureau, 2002 Economic Census, Subject Series: Information, Table 4, Receipts Size of Firms for the
United States: 2002, NAICS code 518111 (issued November 2005).

Id. An additional 45 firms had annual receipts of $25 million or more.

U.S. Census Bureau, “2002 NAICS Definitions: 519190 All Other Information Services” (Feb. 2004)
.

13 C.F.R. § 121.201, NAICS code 519190.

U.S. Census Bureau, 1997 Economic Census, Subject Series: Information, “Establishment and Firm Size
(Including Legal Form of Organization),” Table 4, NAICS code 514199 (issued Oct. 2000). This category was
created for the 2002 Economic Census by taking a portion of the superseded 1997 category, “All Other Information
Services,” NAICS code 514199. The data cited in the text above are derived from the superseded category.
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Steps Taken to Minimize Significant Economic Impact on Small Entities, and
Significant Alternatives Considered

31.
The RFA requires an agency to describe any significant alternatives that it has considered in
reaching its proposed approach, which may include (among others) the following four alternatives: (1) the
establishment of differing compliance or reporting requirements or timetables that take into account the
resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use of performance, rather than design,
standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.94
32.
The need for the regulations adopted herein is mandated by Federal legislation. In the Second
R&O, we find that, under the express terms of the CALEA statute, all carriers subject to CALEA are obliged
to become CALEA-compliant without exception. However, in the previously-issued Further Notice of
Proposed Rulemaking in this proceeding (a companion document to the First R&O), we are considering two
alternatives: (1) exempting from CALEA certain classes or categories of facilities-based broadband Internet
access providers – notably small and rural providers and providers of broadband networks for educational
and research institutions, and (2) requiring something less than full CALEA compliance for certain classes or
categories of providers, including smaller providers.95
33.

In the Second R&O, we find that, within 90 days of the effective date of the Second R&O,
facilities-based broadband Internet access providers and providers of interconnected VoIP who were newlyidentified in the First R&O as subject to CALEA must submit system security statements to the Commission.
Ensuring that any interception of a carrier’s communications or access to call-identifying information can be
activated only in accordance with a court order or other lawful authorization and with the affirmative
intervention of an employee of the carrier acting in accordance with regulations prescribed by the
Commission is required by section 105 of CALEA and section 229(b) of the Communications Act.96 Further,
system security compliance within 90 days is specified for telecommunications carriers in section 64.2105 of
the Commission’s rules.97 While we considered the alternative of modifying this 90-day compliance period
for facilities-based broadband Internet access providers and providers of interconnected VoIP who were
newly-identified in the First R&O as subject to CALEA, we concluded that would result in disparate
treatment of these newly-identified providers.

34.

In the Second R&O, we also find that sections 107(c) and 109(b) of CALEA provide only
limited and temporary relief from compliance requirements, and that they are complementary provisions that
serve different purposes, which are, respectively: (1) extension of the CALEA section 103 compliance
deadline; and, (2) recovery of CALEA-imposed costs. We considered the alternative of a less stringent
interpretation of these two sections, but concluded that, in designing them, Congress carefully balanced a
reasonable compliance period against a firm deadline. Accordingly, we conclude that the statutory language does
not permit us to adopt a less stringent interpretation. However, we note that section 109(b) lists 11 criteria for
determining whether CALEA compliance is “reasonably achievable” by a particular telecommunications carrier,
and one of these criteria is “[t]he financial resources of the telecommunications carrier.” 98 Accordingly, small
94

5 U.S.C. § 603(c).

First R&O at 20 FCC Rcd 15013-14, paras. 48-52.

47 U.S.C. §§ 1004 and 229(b), respectively.

47 C.F.R. § 64.2105. We note that this section of the rules is herein being transferred to section 1.20005,
47 C.F.R. § 1.20005.

47 U.S.C. § 1008(b)(1)(H).
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carriers may petition for relief under this CALEA section, thus possibly mitigating , in some cases, the
economic burden of compliance with rules adopted herein.

35.
In the Second R&O, we also find that, in addition to the enforcement remedies through the
courts available to LEAs under CALEA section 108, we may take separate enforcement action under section
229(a) of the Communications Act against carriers that fail to comply with the CALEA statute. We
considered an alternative, recommended by some commenters, that authority to enforce CALEA lies exclusively
with the courts, but we conclude that we have the authority to prescribe CALEA rules and investigate the
compliance of those carriers and providers subject to such rules. We also conclude that there should be no
disparate treatment of small entities with regard to CALEA enforcement because this would be inconsistent
with the statute.
36.
Finally, in the Second R&O, we find that carriers must generally pay for CALEA development
and implementation costs incurred after January 1, 1995, but we acknowledge that they may recover costs
from other sources, such as from their subscribers. Some commenters argue that carriers with small
subscriber bases are less able to bear the costs of CALEA implementation; however, to the extent CALEA
costs prohibit these carriers from reasonably achieving CALEA compliance, we again note that CALEA
section 109(b) provides a remedy.99 The carriers can seek a determination from the Commission that
CALEA compliance is not reasonably achievable, and, upon such a determination, the Attorney General may
agree to pay the costs of compliance for these carriers, or the carriers will be deemed to be in compliance.100
We believe our approach represents a reasonable accommodation for small carriers.
F.

Report to Congress

37.
The Commission will send a copy of the Second R&O and MO&O, including this FRFA, in a
report to be sent to Congress and the Government Accountability Office pursuant to the Congressional
Review Act.101 In addition, the Commission will send a copy of the Second R&O and MO&O and FRFA to
the Chief Counsel for Advocacy of the SBA. A copy of the Second R&O and MO&O and FRFA (or
summaries thereof) will also be published in the Federal Register.102

47 U.S.C. § 1008(b).

100

47 U.S.C. § 1008(b)(2).

101

See 5 U.S.C. § 801(a)(1)(A).

102

See 5 U.S.C. § 604(b).
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APPENDIX D

STANDARDS FOR PACKET-MODE TECHNOLOGIES
This Appendix updates corresponding Appendix D of the Notice. 103 The discussion below is
informational only, and does not represent Commission views regarding any of the packet-mode
standards.
A. Standards for packet content
Subcommittee TR45.2 of the TIA developed standard J-STD-025, Lawfully Authorized Electronic
Surveillance, to serve as a "safe harbor" for wireline, cellular, and broadband PCS carriers and
manufacturers under section 107(a) of CALEA. J-STD-025 was jointly published in December 1997
by TIA and Committee T1 (the latter sponsored by the Alliance for Telecommunications Industry
Solutions). J-STD-025 defines services and features required by wireline, cellular, and broadband
PCS carriers to support lawfully authorized electronic surveillance, and specifies the interfaces for
delivering the intercepted communications (i.e., content) and call-identifying information to a LEA.
J-STD-025 also includes standards for some packet-mode communications capability (content
only)104 and a location information requirement.105 The publishers of the J-Standard subsequently
revised it into J-STD-025-A (Revision A of the J-Standard) to incorporate the changes adopted by the
Commission in its initial CALEA proceeding to include the six DOJ/FBI “punch list” capabilities.106
J-STD-025-A was issued in May 2000 and became an American National Standard on April 16,
2003.
J-STD-025, J-STD-025-A, and J-STD-025-B (described below) require that a Packet Data
intercept access point107 shall access data packets sent or received by the equipment, facilities, or
services of an intercept subject when a packet-mode data service is provided and that packets shall be
sent to a LEA when they are intercepted. TIA states that for low-volume communications (e.g., short
messaging service, or “SMS”), the content may be included in a packet envelope message that may be
provided to the LEA in a CII channel, but for high-volume communications (e.g., most packet data
applications) the entire packet stream must be provided to the LEA in a content channel. A Packet
Data intercept access point provides access to one or more of the following packet-mode data
services:
•
•

103

ISDN user-to-user signaling;
ISDN D-channel X.25 packet services;

Notice at 15764.

104

Section 3 of J-STD-025 describes packet-mode as a “communication where individual packets or virtual circuits
of a communication within a physical circuit are switched or routed by the accessing telecommunication system.
Each packet may take a different route through the intervening network(s).”
105

J-STD-025 includes a parameter that would identify the location of a subject's “mobile terminal” whenever this
information is reasonably available at the Intercept Access Point and its delivery to law enforcement is legally
authorized. Location information would be available to the law enforcement agency irrespective of whether a call
content channel or a call data channel is employed. See J-STD-025 at § 6.4.6 and §§ 5.4.1-5.4.8, Tables 1, 5, 6, and
8.
106

See Communications Assistance for Law Enforcement Act, CC Docket No. 97-213, 14 FCC Rcd 16794 (1999).

107

The intercept access point is the point within a telecommunication system where communications or callidentifying information of an intercept subject’s equipment, facilities and services are accessed.
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•
•
•
•
•
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SMS for cellular and PCS (e.g., Narrowband Advanced Mobile Phone System,
TIA/EIA-41, PCS1900, or Global Systems for Mobile Communications
(“GSM”)-based technologies);
Wireless packet-mode data services (e.g., Cellular Digital Packet Data, CDMA,
Time Division Multiple Access, PCS1900, or GSM-based packet-mode data
services);
X.25 services;
IP services;
Paging (one-way or two-way); and
Packet-mode data services using traffic channels.

B. Standards for packet call-identifying information
This section reviews various existing standards and technical requirements for providing packet
call-identifying information to LEAs. Each standard is written to apply to a specific set of packet
services or technology, or specific combinations of services and technologies, since what is
reasonably available call-identifying information may vary by service and technology.
(1) TIA, ATIS, and J-STD-025-B
Subsequent to its issuance of J-STD-025-A, TIA produced J-STD-025-B, another revision of the
J-Standard. The purpose of the J-STD-025-B revision was to add requirements for support of packet
mode call-identifying information. J-STD-025-B was approved as a TIA standard and an ATIS trial
use standard in January 2004.108
J-STD-025-B provides standards in three areas, two for wireless carriers and one for wireline
carriers. First, it includes its own text for surveillance of Internet access services using cdma2000®109
technology, which is used by many commercial wireless service providers. Second, it references in
the current trial use standard to 3rd Generation Partnership Project (“3GPP”) specifications for
surveillance of both Internet access and voice over packet using UMTS wireless technology.110 The
3GPP specifications are aligned with ATIS standard T1.724, and it is expected that the final version
of J-STD-025-B will refer directly to T1.724 instead of the 3GPP specifications.111 In January 2004,
ANSI approved ATIS standard T1.724-2004, UMTS Handover Interface for Lawful Interception.
T1.724 supports surveillance of both Internet access services and Session Initiation Protocol (“SIP”)based multimedia (including voice) over packet services using UMTS or General Packet Radio
Service technology.
Finally, J-STD-025-B references to ATIS standard T1.678 for surveillance of voice over packet
services provided over wireline. In January 2004 ANSI approved ATIS standard T1.678-2004,
Lawfully Authorized Electronic Surveillance (“LAES”) for Voice over Packet Technologies in
Wireline Telecommunications Networks. T1.678 supports surveillance of VoIP arrangements using
two call set-up protocols: SIP and H.323-based VoIP services.
108

We observed in the Notice that TIA had indicated its intent to develop another revision to the J-Standard, titled
J-STD-025-C; see Notice at 15765, n.419. However, TIA has not recently indicated that this release is still planned.
109

cdma2000 is a registered trademark of TIA.

110

3G TS 33.108, 3rd Generation Partnership Project: Technical Specification Group Services and System Aspects:
3G Security; Handover interface for Lawful Interception.
111

Presentation by Nortel Networks to the FCC, March 25, 2004.
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As mentioned above, J-STD-025-B refers to ATIS standard T1.678 for providing LEAs with
access to call-identifying information on voice over packet services provided over wireline. In
addition, J-STD-025-B refers to international standards aligned with ATIS standard T1.724 for
providing LEAs with access to call-identifying information on both Internet access and voice over
packet using UMTS wireless technology.
(2) Cable Television Laboratories (CableLabs®) specification112
As discussed in the Notice, CableLabs®, starting in 1999, has issued specifications for lawfully
authorized electronic surveillance for cable operators using systems compliant with CableLabs®
13
PacketCableTM specifications for multi-media services such as IP telephony.113 Version I01 of the
PacketCableTM 1.5 Electronic Surveillance Specification (PKT-SP-ESP1.5-I01-050128) was released
on January 28, 2005 and is the latest specification, superseding all previous documents.114

112

CableLabs® is a trademark of Cable Television Laboratories, Inc.

113

Notice at 15766-67.

114

CableLabs® has continued to work with LEAs to improve its specifications for lawfully authorized electronic
surveillance. As discussed in the Notice (at 15766-67), Version I01 of the PacketCableTM Electronic Surveillance
Specification (PKT-SP-ESP-I01-991229) was released on December 29th, 1999. Version I02 was issued on August
1, 2003. Based on FBI input, Version I03 was released on January 13th, 2004. Version 104 was released on July
23rd, 2004. The FBI has continued to work with the CableLabs® team, resulting in the current ESP1.5-I01 release.
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APPENDIX E
SECTION 109(B)(1) PETITIONS FOR COST-SHIFTING RELIEF:
FILING INSTRUCTIONS
I.

PURPOSE

CALEA section 109(b) permits a telecommunications carrier covered by CALEA to file a petition
with the FCC and an application with the Department of Justice (DOJ) to request that DOJ pay the costs
of the carrier’s CALEA compliance (cost-shifting relief) with respect to any equipment, facility or service
installed or deployed after January 1, 1995. First, the carrier must file a section 109(b)(1) petition with
the FCC and prove that, based on one or more of the criteria set forth in section 109(b)(1)(A)-(K),
implementation of at least one particular solution that would comply with a particular section 103
capability requirement is not “reasonably achievable.” The filing instructions for this section 109(b)(1)
petition are set forth in this appendix. Second, if the Commission grants a section 109(b)(1) petition, the
carrier must then apply to DOJ, pursuant to section 109(b)(2), to pay the reasonable costs of compliance
for one of the solutions proposed in the section 109(b)(1) petition. DOJ may then either pay the
reasonable costs of compliance or deny the application. If DOJ denies the section 109(b)(2) application,
then the carrier is deemed to be CALEA compliant for the facilities, networks, and services (services)
described in the section 109(b)(1) petition until those services are replaced, significantly upgraded or
otherwise undergo a major modification.
II.

EFFECT OF FILING

The Commission shall rule on the petition within one year after the date such petition was filed.
The filing of a petition does not toll the effective date that a carrier must become CALEA-compliant or
shield a carrier from CALEA enforcement by law enforcement.
III.

FILING INSTRUCTIONS AND PROCEDURES
A.

Where to File and Number of Copies

All petitioners must file an original and two copies addressed to:
Secretary
Federal Communications Commission
ATTN: CALEA 109(b)(1)
445 12th Street, S.W.
Washington, D.C. 20554
B.

Filing Copies with the FBI

A carrier shall also send one copy of the petition to:
CALEA Implementation Unit
14800 Conference Center Drive, Suite 300
Chantilly, Virginia 20151-0450.

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Confidentiality Process

All filings, orders and any other information provided in a section 109(b)(1) proceeding shall be
treated as presumptively confidential pursuant to section 0.457(g) of the Commission’s rules,115 and must
be filed under seal by the petitioner. Petitioners must mark the top of each page of their petitions:
“Confidential – Not for Public Inspection.” Persons seeking access to any information from a section
109(b)(1) proceeding must request such access pursuant to section 0.461 of the Commission’s rules.116
IV.

Required Petitioner Identification Information
A.

Name of carrier, address, and name of carrier contact person.

Form 499A file number for petitioner (if applicable).

Petitioner FCC Registration Number and/or Tax Payer Identification Number.

D.
petition.
V.

The information required in paragraphs A-C shall be provided on page one of the

FORMAT OF SECTION 109(b)(1) PETITIONS

A.
Include an executive summary at the beginning of each petition that, in one to two
paragraphs only, summarizes the petitioner’s arguments.
B.
Include a Table of Contents that clearly indicates to the reader where to find the (1)
facilities, networks, and services (services) at issue, (2) the CALEA section 103 capability requirement(s)
at issue, (3) the petitioner’s proposed solution(s), including a cost analysis of the solution(s), to satisfy the
section 103 capability requirement(s) at issue, (4) the section 109(b)(1) criterion under which the
petitioner will argue that compliance is not reasonably achievable, and (5) petitioner’s due diligence
showing.
VI.

CONTENT OF SECTION 109(b)(1) PETITIONS
A.

Identification Of Specific Facilities, Networks And Services (Services) And CALEA
Section 103 Capability Requirements

Identify the facilities, networks, and services (services) that are the subject of the petition.

2.
petition.

Identify which CALEA section 103 capability requirement(s) is the subject of the

Identification Of A Solution Or Solutions That, If Implemented, Would Make The

115

47 C.F.R. § 0.457(g).

116

47 C.F.R. § 0.461.
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Service At Issue Compliant With The Applicable CALEA Section 103 Capability
Requirement(s)
1.
The petition must present at least one solution for which the petitioner argues the costs
should be shifted to DOJ. The petition must include evidence that the petitioner engaged in due diligence
to identify a reasonably achievable solution, but that, despite this due diligence, the solution or solutions
presented in the petition are not reasonably achievable by the petitioner. This due diligence standard is
set forth in more detail in Section III.B.2.c. of this Second R&O. At a minimum, a petitioner must present
evidence of a specific CALEA solution, of the petitioner’s due diligence efforts to make this solution
reasonably achievable, and how the petitioner ultimately determined that it could not implement the
specified CALEA solution without incurring “significant difficulty or expense.” To the extent more than
one CALEA solution is available, the petitioner must identify each of these solutions and demonstrate
that petitioner exercised due diligence in examining each of those solutions and why it determined that
none of them was reasonably achievable.
2.
Due diligence will be measured by a carrier’s resources, and the number of solutions a
carrier should present in its petition shall be proportionate to the amount of a carrier’s resources. Due to
their greater resources, larger carriers shall be expected to examine and propose more solutions in their
petitions in order to demonstrate that the costs of a CALEA solution are not reasonably achievable for
those carriers and therefore should be shifted to DOJ. Smaller carriers need not examine as many
solutions in their petitions, but must examine as many solutions as their resources permit.
3.
To the extent that other solutions exist in the marketplace, such as a solution offered by a
third-party provider, that are less expensive than the solutions proffered in a petition, the petitioner must
explain why the less expensive solutions are not reasonably achievable pursuant to a cost analysis, as
described in more detail below.
C.

Special Instructions for Packet Services Claims of Not Reasonably Achievable

1.
Identify each packet service to be covered by this petition and the date that service was
initially offered to the public.
2.
For each packet service, identify and list all intercept access points to which this petition
applies. (These should be the intercept access points associated with the least cost solution, as discussed
in paragraphs 4-5 below.) Provide the name of the manufacturer, the model, and the type of network
equipment (e.g., router, DSLAM, ATM switch, soft switch, SIP server, or IP-PSTN gateway, CMTS
(cable modem termination system), CMS (call management system), media gateway, or media gateway
controller) currently in use at each access point. Also provide the date of initial installation of the
equipment in the service provider's network, the generic software release currently loaded on the
equipment and the date of its installation in the service provider’s network.
Description of Alternative CALEA Solutions and Cost Analysis
3.
For each packet service, identify the applicable industry surveillance standards or
specifications (e.g., TIA J-STD-025-A, TIA J-STD-025-B, ANSI T1.678, ANSI T1.724, and
PACKETCABLE PKT-SP-ESP1.5-I01-050128) to which the service provider intends to conform. If no
applicable standard exists, and the service provider intends to implement a custom solution, indicate
“custom solution” and go to 4, below.
4.
For each packet service, identify and describe each CALEA solution the service provider
has considered. As part of the discussion of each solution, describe the type and function(s) of network
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equipment used at the intercept access points, and provide a count of such equipment by manufacturer
name and model. Also, include a discussion and count of equipment or software upgrades and additional
components such as mediation devices and/or probes that are required to implement each solution.
Indicate if solutions involve the use of a trusted third party CALEA service provider, association or
cooperative, and identify the functions the third party provider is expected to perform. Identify the least
expensive solution or solutions.
5.
Provide estimates of the capital cost (i.e., the engineered, furnished, and installed
(“EF&I”) costs of hardware and software) of implementing each considered solution in the service
provider's network. Where applicable, include the estimated costs of using a third party CALEA service
provider. Support cost estimates with manufacturer/third party provider documentation. Also provide
estimates of operations costs. Demonstrate how each estimate was derived in a manner that permits the
results to be verified and duplicated. Provide a detailed cost estimate for the least expensive solution, and
enough information regarding the other solutions to verify that they are not the least expensive
solutions.117 Express the estimated total cost of each alternative solution in terms of one-time costs plus
recurring costs for a specified number of years. Calculate the present value of each alternative in today’s
(date of petition) dollars. State the discount rate used and the rationale for its selection, and the length of
the study period.
D.

Special Instructions for Circuit Services Claims of Not Reasonably Achievable

The petition should identify, where applicable:
a. The date the switch was initially installed in the service provider's network and the
installation date of the most recent software generic; and
b. The identity of the carrier’s switching equipment (by manufacturer; type and model;
software version or generic currently operating; and Common Language Location
Identification (CLLI) Code and geographic areas served).

Description of Alternative CALEA Solutions and Cost Analysis
2.
Describe each CALEA solution the service provider has considered and identify the least
expensive solution(s). For each solution considered, include a discussion and count of required
equipment or software upgrades and additional components such as adjunct processors that are required to
implement section 103 assistance capabilities.118 Indicate if the solutions involve the use of a trusted third
party CALEA service provider, association or cooperative, and the functions the third party provider is
expected to perform.
3.
Provide estimates of the capital cost (i.e., the engineered, furnished, and installed
(“EF&I”) costs of hardware and/or software) of implementing each solution described above in the
service provider's network. Where applicable, include the estimated costs of using a trusted third party
CALEA service provider. Support all estimates with manufacturer/third party service provider
117

For example, two solutions may have intercept access points at the same physical location. However, the first
solution may require the installation of a $10,000 probe at each access point, while the second solution may require
the installation of software at each access point at the cost of $3000 per access point. Assuming all other costs are
the same for the two solutions, the software solution is clearly the lower cost.
118

47 U.S.C. § 1002. See also Lawfully Authorized Electronic Surveillance Joint Standard, J-STD-025-B (TIA
December, 2003).
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documentation. Also provide estimates of operations costs for each solution. Demonstrate how each
estimate was derived in a manner that permits the results to be verified and duplicated. Provide a detailed
cost estimate for the least expensive solution, and enough information regarding the other solutions to
demonstrate that they are not the least expensive solution.119 Express the estimated total cost of each
alternative solution in terms of one-time costs plus recurring costs for a specified number of years.
Calculate the present value of each alternative in today’s (date of petition) dollars. State the discount rate
used and the rationale for its selection, and the length of the study period.
E.

Arguments That CALEA Compliance Is Not Reasonably Achievable On
Grounds Of Cost

1.
Explain and produce evidence how the identified solution or, in the case of multiple
solutions, how all solutions would impose a “significant difficulty or expense” on the petitioner as that
phrase is defined in the eleven statutory criteria set forth in CALEA section 109(b)(1)(A)-(K). See
paragraph 54 of this Second R&O for further guidance on these eleven statutory criteria. All arguments
must clearly identify and relate to one of these eleven statutory criteria.
2.
If petitioner argues that the least expensive solution or solutions imposes a significant
expense, indicate the impact of implementing the least expensive solution by providing the number of
packet customers and the number of circuit customers served by the service provider in each of the past
five years, and by comparing the estimated total cost of the least cost CALEA solution to the service
provider's capital budget for the next five years. Costs must be stringently documented. See Section
III.D. of this Second R&O for further guidance on cost issues and requirements for documentation.
3.
Identify the resources available to the carrier to attain CALEA compliance for each
service listed in the petition. Examples of resources include estimates for capital expenditures approved,
rejected or modified by the state regulatory authorities, the petitioner’s capital budget, and long-term
capital requirements projected by the petitioner. Explain how the petitioner introduced CALEA
compliance costs into its network planning product development cycle.
4.
Identify efforts by the petitioner to obtain additional resources to become CALEA
compliant. Examples of evidence of these efforts include petitions filed by a carrier with the state public
utility commission to add CALEA compliance costs to the revenue requirement if the carrier is subject to
rate of return regulation, or petitions to add CALEA compliance costs to the exogenous cost category if
the carrier is subject to price cap regulation. Further examples could include efforts to obtain funding
from the federal Rural Utility Service (RUS) from private sources.
5.
Provide the number of non-CALEA law enforcement requests received by the carrier in
each of the last five years for the following: (a) packet-mode content wiretaps; (b) circuit-mode content
wiretaps; (c) packet-mode pen register and trap-and-trace wiretaps; and (d) circuit-mode pen register and
trap and trace wiretaps. In addition, provide the number of CALEA law enforcement requests received by
the carrier in each of the last three years for the following: (a) packet-mode content wiretaps; (b) circuitmode content wiretaps; (c) packet-mode pen register and trap-and-trace wiretaps; and (d) circuit-mode
pen register and trap-and-trace wiretaps.

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1.

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Arguments that CALEA Compliance Is Not Reasonably Achievable On
Grounds Other Than Cost

If petitioner seeks relief on grounds other than cost, petitioner must produce verified evidence to
support an argument that it is entitled to relief under any of the non-cost criteria of paragraphs (A)
to (K) of section 109(b)(1), as further explained in paragraph 54 of this Second R&O.

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FCC 06-56

APPENDIX F
SECTION 107(C) PETITIONS FOR EXTENSIONS OF TIME:
FILING INSTRUCTIONS
I.

Purpose and Scope

CALEA section 107(c)(1) permits a petitioner to apply for an extension of time, up to two years
from the date that the petition is filed, to come into compliance with a particular CALEA section 103
capability requirement.
Under section 107(c)(1), a petitioner may seek an extension of time only for equipment, facilities,
or services (“services”) installed or deployed prior to October 25, 1998.
II.

Effect of Filing

A section 107(c)(1) extension petition shall be deemed provisionally granted for two years unless
the Commission rules otherwise. The filing of a section 107(c)(1) petition tolls the deadline for CALEA
compliance.
III.

Filing Instructions and Procedures
A.

Where to File and Number of Copies

The petitioner shall file one original petition and two copies with the:
Secretary
Federal Communications Commission
ATTN: CALEA 107(c)(1)
445 12th Street, S.W.
Washington, D.C. 20554
B.

File One Copy With The FBI

The petitioner, whether or not it chooses to participate in the FBI CALEA Implementation Unit’s
Flexible Deployment Program, shall at the same time send one copy of its FCC petition and one copy of
any other documents that it files in that FCC petition’s docket to:
CALEA Implementation Unit
14800 Conference Center Drive, Suite 300
Chantilly, Virginia 20151-0450
C.

Letters To And From The FBI’s CALEA Implementation Unit Must Be
Filed With The FCC
If the petitioner applies to participate in the FBI’s Flexible Deployment Program, the petitioner
shall attach a copy of the Flexible Deployment Template required by the FBI to its FCC petition. In
addition, the petitioner shall file copies of the Receipt Notification Letter and either the Letter of Support
or Letter of Non-support that it receives from the FBI with the FCC pursuant to the instructions in
paragraph A above. For instructions on how to participate in the FBI’s Flexible Deployment Program,
see http://askcalea.net/docs/flexguide4.pdf (last visited in May 2006).
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Confidentiality Process

All filings, orders and any other information provided in a section 107(c)(1) proceeding shall be
treated as presumptively confidential pursuant to section 0.457(g) of the Commission’s rules,120 and must
be filed under seal by the petitioner. Petitioners must mark the top of each page of their petitions:
“Confidential – Not for Public Inspection.” Persons seeking access to any information from a section
107(c)(1) proceeding must request such access pursuant to section 0.461 of the Commission’s rules.121
IV.

Required Petitioner Identification Information
A.

Name of carrier, address, and name of carrier contact person.

Form 499A file number for petitioner (if applicable).

Petitioner FCC Registration Number (“FRN”).

D.
petition.
V.

The information required in paragraphs A-C shall be provided on page one of the

FORMAT OF SECTION 107 PETITIONS

A.
Include an executive summary at the beginning of each petition that, in one to two
paragraphs only, summarizes the petitioner’s arguments.
B.
Include a Table of Contents that clearly indicates to the reader where to find the (1)
specific facilities, services and equipment at issue, (2) capability requirements at issue, (3) arguments
why the petitioner needs an extension of time, (4) proposed solution, including a cost analysis, and (5)
petitioner’s due diligence showing.
VI.

CONTENT OF SECTION 107 PETITIONS
A.

Identification of Equipment, Facilities, and Services; CALEA Section 103
Capability Requirement; and Compliance Date

Identify the “equipment, facility or service” (“service”) that is the subject of the petition.

Certify that the service was deployed prior to October 25, 1998.

3.
Identify which CALEA section 103 capability requirement (or requirements) is the
subject of the petition.

120

47 C.F.R. § 0.457(g).

121

47 C.F.R. § 0.461.
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FCC 06-56

4.
Identify the date, not to exceed two years from the date that the petition is filed, that the
service at issue in the petition will be compliant with the applicable CALEA section 103 capability
requirements.122
B.

Evidence

1.
A petitioner must support all assertions with evidence, either in the form of documents or
in signed declarations.
C.

Circuit Services

The petition should identify, where applicable:

a.
The date the switch was initially installed in the service provider's network and
the installation date of the most recent software generic; and
b.
The identity of the carrier’s switching equipment (by manufacturer; type and
model; software version or generic currently operating; and Common Language Location Identification
(CLLI) Code and geographic areas served).
2.

Description of CALEA Solution(s) and Cost Analysis

a.
Describe the CALEA solution(s) the service provider intends to implement by
switch type (manufacturer and model). Include a discussion of required equipment and/or software
upgrades and additional components such as adjunct processors that are required to implement section
103 assistance capabilities.123 Indicate if the solution(s) involve the use of a third party CALEA service
provider, association or cooperative, and the functions the third party provider is expected to perform.
b.
If cost is not a reason for requiring an extension, skip this paragraph. Otherwise,
provide estimates of the capital cost (i.e., the engineered, furnished, and installed (“EF&I”) costs of
hardware and/or software) of implementing the solutions in the service provider's network, by switch
type. Where applicable, include the estimated costs of using a third party CALEA service provider.
Support all estimates with manufacturer/service provider documentation. Also provide estimates of
operations costs. Demonstrate how each estimate was derived in a manner that permits the results to be
verified and duplicated. Express the estimated total cost of each alternative solution in terms of one-time
costs plus recurring costs for a specified number of years. Calculate the present value of each alternative
in today’s (date of petition) dollars. State the discount rate used and the rationale for its selection, and the
length of the study period.

122

Although section 107(c)(1) permits extensions of time for only two years, under certain narrow circumstances, a
petitioner may indicate in its petition why it intends to file a second petition for an extension of time at the
conclusion of the first petition’s two-year extension period.
123

47 U.S.C. § 1002. See also Lawfully Authorized Electronic Surveillance Joint Standard, J-STD-025-B (TIA
December, 2003).
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Federal Communications Commission
D.

FCC 06-56

Packet Services

1.
For each packet service covered by this extension request, identify and list all intercept
access points to which this petition applies. Provide the name of the manufacturer, the model, and the
type of network equipment (e.g., router, DSLAM, ATM switch, soft switch, SIP server, or IP-PSTN
gateway, CMTS (cable modem termination system), CMS (call management system), media gateway, or
media gateway controller) currently in use at each access point. Also provide the date of initial
installation of the equipment in the service provider's network, the generic software release currently
loaded on the equipment and the date of its installation in the service provider’s network.
2.

Description of CALEA Solution(s) and Cost Analysis

a.
For each packet service covered by the extension petition, identify the applicable
industry surveillance standards or specifications (e.g., TIA J-STD-025-A, TIA J-STD-025-B, ANSI
T1.678, ANSI T1.724, and PACKETCABLE PKT-SP-ESP1.5-I01-050128) to which the service provider
intends to conform. If no applicable standard exists, and the service provider intends to implement a
custom solution, indicate “custom solution” and proceed to the next paragraph.
b.
For each packet service identified in this petition, identify and describe the
CALEA solution service provider plans to implement. As part of the discussion of each solution, describe
the function(s) of the network equipment used at the intercept access points, and provide a count of such
equipment by manufacturer name and model. Also, include a discussion and count of equipment or
software upgrades and additional components such as mediation devices and/or probes that are required to
implement each solution. Indicate if a solution involves the use of a trusted third party CALEA service
provider, association or cooperative, and identify the functions the third party provider is expected to
perform.
c.
If cost is not a reason for requiring an extension, skip this paragraph. Otherwise,
provide estimates of the capital cost (i.e., the engineered, furnished, and installed (“EF&I”) costs of
hardware and/or software) of implementing each solution in the service provider's network. Where
applicable, include the estimated costs of using a trusted third party CALEA service provider. Support
cost estimates with manufacturer/third party provider documentation. Also provide estimates of
operations costs. Demonstrate how each estimate was derived in a manner that permits the results to be
verified and duplicated. Express the estimated total cost of each alternative solution in terms of one-time
costs plus recurring costs for a specified number of years. Calculate the present value of each alternative
in today’s (date of petition) dollars. State the discount rate used and the rationale for its selection, and the
length of the study period.
3.
For each packet service identified in the petition, the petition must include evidence that
third party solutions were solicited from all available vendors and then compared with the other solutions
provided above.
E.

Arguments For Why Petition Should be Granted

1.
The petitioner must present evidence for why it merits an extension of time to bring the
service at issue into compliance with the applicable section 103 CALEA capability requirement(s).
2.
If petitioner argues that it is entitled to relief based on cost, provide detailed and specific
evidence of the impact of the cost by comparing the estimated total cost of the CALEA solution to the
service provider's capital budget for the next five years.
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3.
Provide the number of packet customers and the number of circuit customers served by
the service provider in each of the past five years.
4.
Identify the resources available to the carrier to attain CALEA compliance for each
service listed in the petition. Examples of resources include estimates for capital expenditures approved,
rejected or modified by the state regulatory authorities, the petitioner’s capital budget, and long-term
capital requirements projected by the petitioner. Explain how the petitioner introduced CALEA
compliance costs into its network planning product development cycle.
5.
Identify efforts by the petitioner to obtain additional resources to become CALEA
compliant. Examples of evidence of these efforts include petitions filed by a carrier with the state public
utility commission to add CALEA compliance costs to the revenue requirement if the carrier is subject to
rate of return regulation, or petitions to add CALEA compliance costs to the exogenous cost category if
the carrier is subject to price cap regulation. Further examples could include efforts to obtain funding
from the federal Rural Utility Service (RUS) from private sources.
6.
Provide the number of non-CALEA law enforcement requests received by the carrier in
each of the last five years for the following: (a) packet-mode content wiretaps; (b) circuit-mode content
wiretaps; (c) packet-mode pen register and trap-and-trace wiretaps; and (d) circuit-mode pen register and
trap and trace wiretaps. In addition, provide the number of CALEA law enforcement requests received by
the carrier in each of the last three years for the following: (a) packet-mode content wiretaps; (b) circuitmode content wiretaps; (c) packet-mode pen register and trap-and-trace wiretaps; and (d) circuit-mode
pen register and trap-and-trace wiretaps.
F.

Due Diligence Showing

1.
For circuit services, petitioner must demonstrate that it exercised due diligence since June
30, 2002, to achieve a CALEA-compliant solution.124
2.
For packet services, petitioner must demonstrate that it exercised due diligence since
November 19, 2001, to achieve a CALEA-compliant solution.125

124

See infra Section III.B., para. 35 (discussing how this due diligence showing must be met).

125

See infra Section III.B., para. 37 (discussing how this due diligence showing must be met).
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Federal Communications Commission
APPENDIX G
SAMPLE MONITORING REPORT (FORM XXX)

FCC 06-56

Federal Communications Commission

FCC 06-56

STATEMENT OF
CHAIRMAN KEVIN J. MARTIN
Re:

Communications Assistance for Law Enforcement Act and Broadband Access and Services (ET
Docket No. 04-295)

Enabling law enforcement to ensure our safety and security is of paramount importance. Last August, the
Commission took an important step forward by concluding that VoIP and facilities-based broadband
Internet access providers have CALEA obligations, giving law enforcement the necessary tools to keep
pace with rapid technological change. Today’s Order provides further clarity to carriers and other new
technology service providers regarding the implementation of their law enforcement obligations.
The Order we adopt today is, as we forecast last year, a second step toward implementing CALEA
obligations. We address important issues under CALEA such as cost recovery, compliance processes,
and enforcement, providing further clarity for entities subject to CALEA to continue to work toward full
CALEA compliance. I remain committed to ensuring that these providers take all necessary actions to
incorporate surveillance capabilities into their networks in a timely fashion. Further we will continue to
work to address and overcome any challenges that stand in the way of effective lawful electronic
surveillance.

Federal Communications Commission

FCC 06-56

STATEMENT OF
COMMISSIONER MICHAEL J. COPPS
Re:

Communications Assistance for Law Enforcement Act and Broadband Access and
Services, Second Report and Order and Memorandum Opinion and Order (ET
Docket No. 04-295, RM-10865)

As I have often said, the first obligation of a public servant is the safety of the people. In our case
here at the FCC, our controlling statute makes that as explicit as it could possibly be—we are charged to
“make available . . . a rapid, efficient, Nation-wide and world-wide wire and radio communication service
. . . for the purpose of the national defense” and “for the purpose of promoting safety of life and
property.” The implementation and oversight of CALEA is an important part of that duty. By ensuring
that law enforcement authorities have access to the resources CALEA authorizes, this Commission
supports efforts to protect the public safety and homeland security of the United States and its people.
Because we have a responsibility to assist those whose job it is to protect us from harm, I support today’s
decision.
Today’s decision addresses a number of outstanding issues regarding CALEA implementation.
The item cleans up some of the ambiguities left open from our earlier efforts. Notably, we clarify the role
that the experts in industry standard-setting bodies will play by working in concert with law enforcement
and other interested parties to craft technical standards for critical terms like “call-identifying
information.” This is truly urgent work, and I thank those who are participating in the process and urge
them to keep this the top priority item it must be both to get the job done and to avoid the Commission
having to intrude itself in the process. We also clarify that trusted third parties are a legitimate way for
carriers to manage their CALEA obligations. The record shows TTP availability and capability to
perform a number of services to advance CALEA compliance. Trusted third party participation should
also mean more cost-effective options for compliance, particularly for smaller carriers.
As all who have followed our CALEA proceedings know, this is ongoing and difficult work. As
I have remarked before, the challenge is complicated by the Commission’s theory of substantial
replacement that collapsed the statutory dichotomy between information services and telecommunications
services in a stretch that invited time-consuming and unneeded legal complications. Finally, as this order
notes, there is still clarity to be provided. For example, numerous institutions of higher learning have
expressed concern that language in our earlier order could be read as extending CALEA obligations to the
private networks of universities, libraries and some others in ways possibly at odds with the statutory text.
All those agencies and offices of government involved in CALEA implementation should work together
to provide clarity here and to avoid confusion—and potentially significant expenses—for these
institutions.
I commend the Chairman for his dedication to law enforcement and his continuing work on
public safety and homeland security, and I thank the Bureau for all its hard work in getting this item to us
for action today.

Federal Communications Commission

FCC 06-56

STATEMENT OF
COMMISSIONER JONATHAN S. ADELSTEIN
Re: Communications Assistance for Law Enforcement Act and Broadband Access and Services, RM10865, ET Docket 04-295, Second Report and Order and Memorandum Opinion and Order (May 3,
2006).
There is no higher calling for us at the Commission than preserving public safety and homeland
security, so I support our efforts to provide guidance on the legal framework for the Communications
Assistance for Law Enforcement Act (CALEA) and the obligations of facilities-based broadband
providers and interconnected VoIP providers under that statute.
CALEA provides an important tool for law enforcement by requiring telecommunications carriers
to build into their networks technical capabilities to assist law enforcement with authorized intercepts of
communications and call-identifying information. In August of last year, the Commission determined
that facilities-based broadband providers and interconnected VoIP providers are subject to CALEA. With
this Order, we take additional steps to meet the unique needs of our nation’s first responders and law
enforcement officials. I am particularly encouraged by the Order’s finding that broadband and VoIP
providers may use so-called “trusted third parties” to extract the information necessary to comply with
CALEA, particularly given the potential that this approach holds for smaller providers.
We move the ball forward today, but there remains important work ahead for industry, law
enforcement, and the Commission, alike. Particularly given CALEA’s reliance on industry organizations
to take a lead role on these issue and the tight deadlines for compliance, it will be critical for all parties to
work expeditiously, creatively and cooperatively if we are to meet the multi-faceted goals of CALEA.
This Order directs carriers to file detailed reports on the status of their compliance efforts. I look forward
to seeing the results of these reports so that we can track industry progress and take any additional actions
or address remaining issues necessary.
I would like to thank the staff from our Office of Engineering and Technology and the Wireline
Competition Bureau for their hard work on this item. I look forward to working with my colleagues and
the broader community as we continue our efforts to faithfully implement CALEA.

Federal Communications Commission

FCC 06-56

STATEMENT OF
COMMISSIONER DEBORAH TAYLOR TATE
Re:

Communications Assistance for Law Enforcement Act and Broadband Access and Services (ET
Docket No. 04-295).

As is often the case, we are called on by many parties to weigh their individual interests - in this case the interest of the safety and security of our citizens -- against the potential costs and
possible difficulties of ensuring that safety. Our number one priority at this point in our nation’s history
must be our national security – the safety of every American.
First, let me say that having worked with both Vanderbilt University and Belmont
University, and as a parent of three college aged children, I am loathe to take any action that unfairly
shifts a heavy financial burden onto students or parents of students in today’s colleges and universities.
However concerned I may be, though, I am not persuaded merely by largely speculative allegations that
the financial burden on the higher education community could total billions of dollars.126 Moreover, it is
not sound analysis to rely on vague assertions regarding the costs per student of CALEA compliance for
IP services, when those assertions were made prior to, or without regard to, our acknowledgement that the
use of a Trusted Third Party (TTP) could be an economically feasible alternative to meet CALEA’s
requirements. Indeed, one potential TTP asserted that the cost per IP service subscriber, based on largescale shared implementation costs could be as low as “1 cent per subscriber per month or less.”127
It is also important for these institutions to remember what we have said about
educational networks’ compliance. The last sentence of footnote 100 of our First Report and Order says:
“To the extent . . . that these private [educational] networks are interconnected with a public network,
either the PSTN or the Internet, providers of the facilities that support the connection of the private
network to a public network are subject to CALEA under the SRP.” This language means that although
educational networks generally fall under CALEA's exemption for private networks, the facilities
connecting these private networks to the public Internet must be CALEA compliant.
A number of colleges and universities, however, have expressed concern that this
language could be read to require them to modify their entire networks, at significant expense. We have
explained that this concern is misplaced. Our brief to the D.C. Circuit in the CALEA appeal, filed on
February 27, 2006, states (at pp. 39-40):
Petitioners' professed fear that a private network would become subject to
CALEA "throughout [the] entire private network" if the establishment
creating the network provided its own connection between that network
and the Internet is unfounded. The [First Report and Order] states that
only the connection point between the private and public networks is
subject to CALEA. This is true whether that connection point is provided
by a commercial Internet access provider or by the private network
operator itself.

126

See Comments of the Higher Education Coalition, November 14, 2005, at 9.

127

Comments of Subsentio, Inc., November 11, 2005; see also Comments of VeriSign, December 21, 2005, at 4.
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Most importantly, even if compliance costs were to fall on an educational institution,
rather than the commercial provider of the connection point to the public switched network, CALEA itself
allows for consideration of the identified costs of CALEA compliance and financial resources of a
covered carrier in the criteria for review of a Section 109 request. Thus Congress, in crafting CALEA,
provided an avenue for relief from potential harm by making available section 109 relief.
I understand and appreciate the concerns of America’s colleges and universities, but I am
also mindful of the balancing of interests at stake here, and the need to place great weight on the factors
of public safety and national security.
With regard to clarifying that section 109 is the only statutory provision under which
carriers can seek to recover CALEA compliance costs, some might argue that traditional switched
services carriers have sought to recover not only wiretap provisioning costs, but also CALEA capital
costs through individual wiretap charges. The Department of Justice, however, has consistently held the
position here that only costs specific to provisioning the requested wiretap are recoverable in these
charges. To the extent that elimination of CALEA capital costs from wiretap charges enables law
enforcement more effectively to utilize CALEA wiretaps, our clarification serves to further public safety
and national security interests.
Finally, I support the affirmation of the original May 14, 2007 deadline for VoIP and
Broadband Internet providers to become CALEA compliant, as well as our finding that it is premature for
this agency to pre-empt the ongoing industry process of developing additional standards for IP-based
services. There is no indication in the record that any party has filed a deficiency petition under section
107(b) of CALEA with regard to the developing standards. Moreover, I do not find a basis in the statute
for the issuance of an extension.
As to the assertion of commenters that section 109(b) authorizes us to grant an extension
of the obligation of carriers to become CALEA compliant, I do not think it is the FCC’s job to “rewrite”
the statute by using section 109(b) of CALEA to provide an extension for equipment, facilities, or
services deployed on or after October 25, 1998,128 when such equipment, facilities, or services are not
eligible for an extension under section 107(c). Nor am I convinced that our broad authority under 229(a),
the provision that grants us the authority to implement CALEA, provides us broader authority to grant
extensions than the specifically limited authority Congress has stated in section 107(c) of the statute.
Congress has provided clear guidance in the plain language of CALEA, and we must read
CALEA’s requirements in a technology neutral manner. Our action today is not expanding the reach of
the statute, but simply clarifying our interpretation of the statute in order to meet its goals and to further
the interests of public safety and national security.

128

As noted in our Order, most packet-mode technologies were deployed after section 107(c)(1)’s expiration date,
October 25, 1998.
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