Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-01475/USCOURTS-caDC-99-01475-0/pdf.json

Parties Involved:
Cellular Telecommunications Industry Association
Petitioner
Center for Democracy and Technology
Petitioner
Federal Communications Commission
Respondent
United States of America
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 17, 2000 Decided August 15, 2000

No. 99-1442

United States Telecom Association, et al.,

Petitioners

v.

Federal Communications Commission and

United States of America,

Respondents

AirTouch Communications, Inc., et al.,

Intervenors

Consolidated with

99-1466, 99-1475, 99-1523

On Petitions for Review of an Order of the

Federal Communications Commission

Theodore B. Olson argued the cause for petitioners United

States Telecom Association, et al. With him on the briefs

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were Eugene Scalia, John H. Harwood, II, Lynn R. Charytan, Michael Altschul, Jerry Berman, James X. Dempsey,

Lawrence E. Sarjeant, Linda L. Kent, John W. Hunter and

Julie E. Rones.

Gerard J. Waldron argued the cause for petitioners Electronic Privacy Information Center, et al. With him on the

briefs were Kurt A. Wimmer, Carlos Perez-Albuerne, Lawrence A. Friedman, Kathleen A. Burdette, David L. Sobel and

Marc Rotenberg.

Stewart A. Baker, Thomas M. Barba, Matthew L. Stennes,

Mary McDermott, Brent H. Weingardt, Todd B. Lantor,

Robert A. Long Jr., Kevin C. Newsom, Robert B. McKenna

and Dan L. Poole were on the brief for intervenor Sprint

Spectrum, et al.

Philip L. Malet, William D. Wallace and William F. Adler

were on the brief for intervenors Globalstar, et al.

John E. Ingle, Deputy Associate General Counsel, Federal

Communications Commission, argued the cause for respondent Federal Communications Commission. With him on the

brief were Christopher J. Wright, General Counsel, Laurence

N. Bourne and Lisa S. Gelb, Counsel.

James M. Carr, Counsel, entered an appearance.

Scott R. McIntosh, Attorney, U.S. Department of Justice,

argued the cause for respondent United States of America.

With him on the brief were David W. Ogden, Acting Assistant

Attorney General, and Douglas N. Letter, Attorney.

Before: Ginsburg, Randolph and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: The Communications Assistance for

Law Enforcement Act of 1994 requires telecommunications

carriers to ensure that their systems are technically capable

of enabling law enforcement agencies operating with proper

legal authority to intercept individual telephone calls and to

obtain certain "call-identifying information." In this proceedUSCA Case #99-1475 Document #536848 Filed: 08/15/2000 Page 2 of 25
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ing, telecommunications industry associations and privacy

rights organizations challenge those portions of the FCC's

implementing Order that require carriers to make available to

law enforcement agencies the location of antenna towers used

in wireless telephone calls, signaling information from custom

calling features (such as call forwarding and call waiting),

telephone numbers dialed after calls are connected, and data

pertaining to digital "packet-mode" communications. According to petitioners, the Commission exceeded its statutory

authority, impermissibly expanded the types of callidentifying information that carriers must make accessible to

law enforcement agencies, and violated the statute's requirements that it protect communication privacy and minimize the

cost of implementing the Order. With respect to the custom

calling features and dialed digits, we agree, vacate the relevant portions of the Order, and remand for further proceedings. We deny the petitions for review with respect to

antenna tower location information and packet-mode data.

I

The legal standard that law enforcement agencies

("LEAs") must satisfy to obtain authorization for electronic

surveillance of telecommunications depends on whether they

seek to intercept telephone conversations or to secure a list of

the telephone numbers of incoming and outgoing calls on a

surveillance subject's line. In order to intercept telephone

conversations, law enforcement agencies must obtain a warrant pursuant to Title III of the Omnibus Crime Control and

Safe Streets Act of 1968. Before issuing a Title III wiretap

warrant, a judge must find that: (1) "normal investigative

procedures have been tried and have failed or reasonably

appear to be unlikely to succeed if tried or to be too dangerous"; and (2) there is probable cause for believing "that an

individual is committing, has committed, or is about to commit" one of a list of specifically enumerated crimes, that the

wiretap will intercept particular communications about the

enumerated offense, and that the communications facilities to

be tapped are either being used in the commission of the

crime or are commonly used by the suspect. 18 U.S.C.

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s 2518(3). The Electronic Communications Privacy Act of

1986 ("ECPA"), id. s 3121 et seq., establishes less demanding

standards for capturing telephone numbers through the use

of pen registers and trap and trace devices. Pen registers

record telephone numbers of outgoing calls, see id. s 3127(3);

trap and trace devices record telephone numbers from which

incoming calls originate, much like common caller-ID systems, see id. s 3127(4). Although telephone numbers are not

protected by the Fourth Amendment, see Smith v. Maryland,

442 U.S. 735, 742-45 (1979), ECPA requires law enforcement

agencies to obtain court orders to install and use these

devices. Rather than the strict probable cause showing

necessary for wiretaps, pen register orders require only

certification from a law enforcement officer that "the information likely to be obtained is relevant to an ongoing criminal

investigation." 18 U.S.C. s 3122(b)(2).

Wiretaps, pen registers and trap and trace devices worked

well as long as calls were placed using what has come to be

known as POTS or "plain old telephone service." With the

development and proliferation of new telecommunications

technologies, however, electronic surveillance has become increasingly difficult. In congressional hearings, the FBI identified 183 "specific instances in which law enforcement agencies were precluded due to technological impediments from

fully implementing authorized electronic surveillance (wiretaps, pen registers and trap and traces)." H.R. Rep. No.

103-827, pt. 1, at 14-15 (1994). These impediments stemmed

mainly from the limited capacity of cellular systems to accommodate large numbers of simultaneous intercepts as well as

from the growing use of custom calling features such as call

forwarding, call waiting, and speed dialing. See id. at 14.

Finding that "new and emerging telecommunications technologies pose problems for law enforcement," id., Congress

enacted the Communications Assistance for Law Enforcement Act of 1994 "to preserve the government's ability,

pursuant to court order or other lawful authorization, to

intercept communications involving advanced technologies

such as digital or wireless transmission modes, or features

and services such as call forwarding, speed dialing and conUSCA Case #99-1475 Document #536848 Filed: 08/15/2000 Page 4 of 25
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ference calling, while protecting the privacy of communications and without impeding the introduction of new technologies, features, and services," id. at 9. Known as CALEA, the

Act requires telecommunications carriers and equipment

manufacturers to build into their networks technical capabilities to assist law enforcement with authorized interception of

communications and "call-identifying information." See 47

U.S.C. s 1002. The Act defines "call-identifying information"

as "dialing or signaling information that identifies the origin,

direction, destination, or termination of each communication

generated or received by a subscriber by means of any

equipment, facility, or service of a telecommunications carrier." Id. s 1001(2). CALEA requires each carrier to

ensure that its equipment, facilities, or services ... are

capable of

(1) expeditiously isolating and enabling the government, pursuant to a court order or other lawful authorization, to intercept, to the exclusion of any other communications, all wire and electronic communications carried

by the carrier within a service area to or from equipment, facilities, or services of a subscriber of such carrier

concurrently with their transmission to or from the subscriber's equipment, facility, or service, or at such later

time as may be acceptable to the government; [and]

(2) expeditiously isolating and enabling the government, pursuant to a court order or other lawful authorization, to access call-identifying information that is reasonably available to the carrier....

Id. s 1002(a)(1)-(2). Carriers must also "facilitat[e] authorized communications interceptions and access to callidentifying information ... in a manner that protects ... the

privacy and security of communications and call-identifying

information not authorized to be intercepted." Id.

s 1002(a)(4)(A). Because Congress intended CALEA to

"preserve the status quo," the Act does not alter the existing

legal framework for obtaining wiretap and pen register authorization, "provid[ing] law enforcement no more and no less

access to information than it had in the past." H.R. Rep. No.

103-827, pt. 1, at 22. CALEA does not cover "information

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services" such as e-mail and internet access. 47 U.S.C.

ss 1001(8)(C)(i), 1002(b)(2)(A).

To ensure efficient and uniform implementation of the Act's

surveillance assistance requirements without stifling technological innovation, CALEA permits the telecommunications

industry, in consultation with law enforcement agencies, regulators, and consumers, to develop its own technical standards

for meeting the required surveillance capabilities. See id.

s 1006. The Act "does not authorize any law enforcement

agency or officer" to dictate the specific design of communications equipment, services, or features. Id. s 1002(b)(1). Although carriers failing to meet CALEA's requirements may

incur civil fines of up to $10,000 a day, see 18 U.S.C.

s 2522(c), the Act establishes a safe harbor under which

carriers that comply with the accepted industry standards will

be deemed in compliance with the statute, see 47 U.S.C.

s 1006(a)(2). But "if a Government agency or any other

person believes that such requirements or standards are

deficient, the agency or person may petition the Commission

to establish, by rule, technical requirements or standards...." Id. s 1006(b). Such Commission rules must:

(1) meet the assistance capability requirements of section 1002 of [the statute] by cost-effective methods;

(2) protect the privacy and security of communications

not authorized to be intercepted;

(3) minimize the cost of such compliance on residential

ratepayers;

(4) serve the policy of the United States to encourage

the provision of new technologies and services to the

public; and

(5) provide a reasonable time and conditions for compliance with and the transition to any new standard,

including defining the obligations of telecommunications

carriers under section 1002 of [the statute] during any

transition period.

Id.

Following two years of proceedings and extensive negotiations with the FBI, the Telecommunications Industry Association ("TIA"), an accredited standard-setting body, adopted

technical standards pursuant to CALEA's safe harbor, publishing them as Interim Standard/Trial Use Standard J-STD025. Known as the "J-Standard," this document outlines the

technical features, specifications, and protocols for carriers to

make subscriber communications and call-identifying information available to law enforcement agencies having appropriate

legal authorization.

Challenging the J-Standard as "deficient," id., the Center

for Democracy and Technology petitioned the Commission for

a rulemaking to remove two provisions it claimed not only

violate CALEA's privacy protections but also impermissibly

expand government surveillance capabilities beyond those

authorized by the statute. One of the challenged J-Standard

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provisions requires carriers to make available to law enforcement agencies the physical location of the nearest antenna

tower through which a cellular telephone communicates at the

beginning and end of a call. According to the Center, this

requirement effectively converts ordinary mobile telephones

into personal location-tracking devices, giving law enforcement agencies access to far more information than they

previously had. The Center also argued that cellular antenna

location information is not "call-identifying information," as

defined in both the statute and the J-Standard. The other

challenged provision relates to what is known as "packetmode data," which we shall describe in detail later in this

opinion. See Section III infra. At this point, suffice it to say

that, according to the Center, the J-Standard's inclusion of

packet-mode data enables law enforcement agencies to obtain

call content with no more than a pen register order.

Both the Justice Department and the FBI also petitioned

the Commission to modify the J-Standard, arguing that it

does not include all of CALEA's required assistance capabilities. The Department provided a list, known as the "FBI

punch list," of nine additional surveillance capabilities that

law enforcement wanted the Commission to add. The punch

list included telephone numbers of calls completed using

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calling cards as well as signaling information related to

custom calling features such as call waiting and conference

calling.

After soliciting public comment on the petitions, see Public

Notice, 13 F.C.C.R. 13786 (1998); Further Notice of Proposed Rulemaking 13 F.C.C.R. 22632 (1998), the Commission

resolved the challenges to the J-Standard in its Third Report

& Order, see In the Matter of Communications Assistance

for Law Enforcement Act, 14 F.C.C.R. 16794 (1999) ("Third

Report & Order"). The Commission denied the Center's

petition to delete cellular antenna location information and

packet-mode data. The location of cellular antenna towers

used at the beginning and end of wireless calls, the Commission ruled, falls within CALEA's definition of call-identifying

information because it "identifies the 'origin' or 'destination'

of a communication." Id. at 16815 p 44. With respect to

packet-mode data, the Commission recognized the uncertainty regarding the technical feasibility of separating call content

(requiring a Title III wiretap warrant) from call-identifying

information (requiring only a pen register order). See id. at

16819-20 pp 55-56. Although inviting further study of the

matter, the Commission declined to remove packet-mode data

from the J-Standard, explaining that CALEA makes no

distinction between packet-mode and other communications

technologies. See id.

The Commission granted the Justice Department/FBI petition in part, adding four of the nine punch list capabilities to

the J-Standard, adding two more in part (neither is challenged here), and declining to add three others (also unchallenged). See id. at 16852 p 138. The four additions are:

(1) "Post-cut-through dialed digit extraction": This requires carriers to use tone-detection equipment to generate a list of all digits dialed after a call has been

connected. Such digits include not only the telephone

numbers dialed after connecting to a dial-up longdistance carrier (e.g., 1-800-CALL-ATT), but also, for

example, credit card or bank account numbers dialed in

order to check balances or transact business using automated telephone services, see id. at 16842-46 pp 112-23;

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(2) "Party hold/join/drop information": This includes

telephone numbers of all parties to a conference call as

well as signals indicating when parties are joined to the

call, put on hold, or disconnected, see id. at 16825-28

pp 68-75;

(3) "Subject-initiated dialing and signaling information": This includes signals generated by activating features such as call forwarding and call waiting, see id. at

16828-30 pp 76-82; and

(4) "In-band and out-of-band signaling": This includes

information about signals sent from the carrier's network

to a subject's telephone, such as message-waiting indicators, special dial tones, and busy signals, see id. at 16830-

33 pp 83-89.

Two industry associations--the United States Telecom Association and the Cellular Telecommunications Industry Association--joined by the Center for Democracy and Technology,

filed a petition for review in this court, as did the Electronic

Frontier Foundation, Electronic Privacy Information Center,

and American Civil Liberties Union. All petitions were consolidated. The Telecommunications Industry Association, the

standard-setting organization that developed and issued the

J-Standard, joined by another trade group, the Personal

Communications Industry Association, and two telecommunications carriers, Sprint PCS and U S West, intervened to

challenge the Third Report & Order, focusing on dialed digit

extraction, the most costly of the added punch list items.

The FCC and the Justice Department filed separate briefs

defending the Commission's action.

The consolidated petitions for review challenge six capabilities: antenna tower location information and packet-mode

data, both of which were included in the J-Standard; and

dialed digit extraction, party hold/join/drop, subject-initiated

dialing and signaling, and in-band and out-of-band signaling,

the four punch list capabilities added by the Commission.

With respect to these challenged capabilities, petitioners contend that the Commission: (1) exceeded its authority under

CALEA because at least some of the information required to

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be made available to law enforcement is neither call content

nor "call-identifying information that is reasonably available

to the carrier," 47 U.S.C. s 1002(a)(2); (2) failed adequately

to "protect the privacy and security of communications not

authorized to be intercepted," as required by the statute, id.

s 1006(b)(2); and (3) failed both to ensure that the capability

requirements are implemented "by cost-effective methods,"

id. s 1006(b)(1), and to "minimize the cost of such compliance

on residential ratepayers," id. s 1006(b)(3). In Section II, we

take up the four challenged punch list capabilities and antenna tower location information. We consider packet-mode

communications in Section III.

II

Whether CALEA requires carriers to make available antenna tower location information and the four punch list

capabilities turns on what the Act means by "call-identifying

information." To repeat, section 102(2) of CALEA defines

"call-identifying information" as "dialing or signaling 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." Id. s 1001(2). The Commission interprets this definition to require adoption of all challenged capabilities, each of which, it claims, makes available

information identifying the "origin, direction, destination, or

termination" of calls. Petitioners argue that the definition

limits "call-identifying information" to telephone numbers.

Because location information and the four punch list items

require carriers to make available more than telephone numbers, petitioners contend that these capabilities exceed

CALEA's requirements. They argue that there is no statutory basis for location information to have been included in the

J-Standard or for the Commission to have mandated the

punch list capabilities.

To resolve this challenge to the Commission's interpretation of a statute it is charged with administering, we proceed

according to Chevron U.S.A. Inc. v. Natural Resources DeUSCA Case #99-1475 Document #536848 Filed: 08/15/2000 Page 10 of 25
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fense Council, Inc., 467 U.S. 837 (1984). We ask first "whether Congress has directly spoken to the precise question at

issue." Id. at 842. If it has, "that is the end of the matter;

for the court, as well as the agency, must give effect to the

unambiguously expressed intent of Congress." Id. at 842-43.

If we find the statute silent or ambiguous with respect to the

precise question at issue, we proceed to the second step of

Chevron analysis, asking "whether the agency's answer is

based on a permissible construction of the statute." Id. at

843. At this stage of Chevron analysis, we afford substantial

deference to the agency's interpretation of statutory language. See id. at 844.

Beginning with Chevron step one, we think it clear that

section 102(2) does not "unambiguously" answer "the precise

question at issue": Is "call-identifying information" limited to

telephone numbers? To begin with, had Congress intended

to so limit "call-identifying information," it could have done so

expressly by using the term "telephone number" as it did in

both sections 103(a)(2) and 207(a)(1)(C) of CALEA. See 47

U.S.C. s 1002(a)(2); 18 U.S.C. s 2703(c)(1)(C). "Where Congress includes particular language in one section of a statute

but omits it in another section of the same Act, it is generally

presumed that Congress acts intentionally and purposely in

the disparate inclusion or exclusion." Russello v. United

States, 464 U.S. 16, 23 (1983) (internal quotation marks and

alteration omitted); see also, e.g., District of Columbia Hosp.

Ass'n v. District of Columbia, 2000 WL 946581, at *3 (D.C.

Cir.). CALEA's definition of "call-identifying information,"

moreover, refers not just to "dialing ... information," but

also to "signaling information," leading us to believe that

Congress may well have intended the definition to cover

something more than just the "dialing ... information" conveyed by telephone numbers. Finally, section 103(a)(2) of

CALEA provides that when information is sought pursuant to

a pen register or trap and trace order, "call-identifying

information shall not include any information that may disclose the physical location of the subscriber (except to the

extent that the location may be determined from the telephone number)." 47 U.S.C. s 1002(a)(2). As the Commission observed, Congress would have had no need to add this

limitation if "call-identifying information" referred only to

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telephone numbers. See Third Report & Order, 14 F.C.C.R.

at 16815 p 44 n.95.

In support of their argument that "call-identifying information" unambiguously means only telephone numbers, petitioners call our attention to the House Judiciary Committee

Report, which does seem to describe such information in

terms of telephone numbers. See H.R. Rep. No. 103-827, pt.

1, at 21. Apparently addressing post-cut-through dialed digits, the Report even says that "other dialing tones that may

be generated by the sender that are used to signal customer

premises equipment of the recipient are not to be treated as

call-identifying information." Id. Yet the Report also echos

CALEA's inherent ambiguity, stating that call-identifying

information is "typically the electronic pulses, audio tones, or

signalling messages that identify the numbers dialed or otherwise transmitted for the purpose of routing calls through the

telecommunications carrier's network." Id. (emphasis added). Although another section of the Report describes

CALEA as requiring carriers to make available "information

identifying the originating and destination numbers of targeted communications, but not the physical location of targets,"

id. at 16, that passage, as the Commission points out, appears

to deal with an earlier version of the statute--before the

definition of "call-identifying information" was expanded by

adding the terms "direction" and "termination."

Petitioners next argue that limiting "call-identifying information" to telephone numbers mirrors ECPA's definitions of

"pen register" and "trap and trace device." Pen registers

record "the numbers dialed or otherwise transmitted," 18

U.S.C. s 3127(3) (emphasis added), and trap and trace devices record "the originating number of ... an electronic

communication," id. s 3127(4) (emphasis added). Petitioners

contend that because CALEA's enforcement provisions are

limited to intercept warrants and to pen register and trap and

trace device orders, the statute's required capabilities must

likewise be restricted to the call content intercepted in a

wiretap and the dialed telephone numbers recorded by pen

registers. "It would have made no sense," say petitioners,

"for Congress to require carriers to provide a capability that

the surveillance laws do not authorize the government to

use." Final Brief of Petitioners USTA, CTIA, and CDT at

16.

This is an interesting argument, but hardly sufficient to

resolve CALEA's ambiguity. CALEA neither crossreferences nor incorporates ECPA's definitions of pen registers and trap and trace devices. Moreover, the fact that

CALEA's definition of "call-identifying information" differs

from ECPA's description of the information obtainable by pen

registers and trap and trace devices reinforces the statute's

inherent ambiguity.

Petitioners also rely on the J-Standard's explanation of the

terms used in CALEA's definition of call-identifying information, pointing out that the J-Standard limits these terms to

telephone numbers:

[D]estination is the number of the party to which a call is

being made (e.g., called party); direction is the number

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to which a call is re-directed or the number from which it

came, either incoming or outgoing (e.g., redirected-to

party or redirected-from party); origin is the number of

the party initiating a call (e.g., calling party); and termination is the number of the party ultimately receiving a

call (e.g., answering party). Interim Standard/Trial Use

Standard J-STD-025, at 5.

Because cell phone location information and the four challenged punch list capabilities call for more than telephone

numbers, petitioners argue that they conflict with the

J-Standard's interpretation of CALEA. Again, this is an

interesting argument, but not relevant at Chevron step one,

where our focus is on whether "the intent of Congress is

clear." Chevron, 467 U.S. at 842 (emphasis added). On that

issue, the authors of the J-Standard can provide no guidance.

Finally, petitioners point out that in Smith v. Maryland the

Supreme Court held that although the Fourth Amendment

protects the privacy of information conveyed during telephone

calls, i.e., the contents of conversations, callers have no reasonable expectation of privacy in dialed telephone numbers.

See 422 U.S. at 742-45. Reading Smith's exception narrowly,

petitioners argue that other than call content interceptable

under a wiretap order, CALEA cannot require carriers to

provide law enforcement agencies anything more than the

telephone numbers dialed in order to complete calls. But

petitioners point to nothing in either CALEA or its legislative

history to suggest that Congress meant to follow Smith's

protected-unprotected distinction in defining call-identifying

information. Moreover, Smith's reason for finding no legitimate expectation of privacy in dialed telephone numbers--

that callers voluntarily convey this information to the phone

company in order to complete calls--applies as well to much

of the information provided by the challenged capabilities.

See id. at 742.

Turning to the government's position, we understand neither the Commission nor the Justice Department to be arguing that section 102(2) unambiguously includes more than

telephone numbers in the definition of "call-identifying information," and for good reason. Although we reject petitioners' argument that section 102(2) is unambiguously limited to

telephone numbers, we think it equally clear that nothing

points to an "unambiguously expressed intent of Congress" to

require every one of the challenged assistance capabilities.

Chevron, 467 U.S. at 843. Instead, the two agencies urge us

to defer to the Commission's interpretation of the statute

pursuant to Chevron's second step. See id. at 844. According to the agencies, the Commission reasonably interpreted

"call-identifying information" to include the punch list capabilities and antenna tower location information. Because we

reach different conclusions with respect to the punch list and

location information, we discuss them separately.

Punch List

Responding to the government's Chevron-two argument,

petitioners contend: (1) the Commission's interpretation of

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"call-identifying information" to include the four added punch

list capabilities is unreasonable and thus unworthy of

Chevron-two deference; and (2) the Commission's decision to

modify the J-Standard to include the punch list reflects a lack

of reasoned decisionmaking, see generally, Motor Vehicle

Mfrs Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29

(1983). Because we agree with the latter argument, we need

not address the Commission's plea for Chevron deference.

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It is well-established that " 'an agency must cogently explain why it has exercised its discretion in a given manner'

and that explanation must be 'sufficient to enable us to

conclude that the [agency's action] was the product of reasoned decisionmaking.' " A.L. Pharma, Inc. v. Shalala, 62

F.3d 1484, 1491 (D.C. Cir. 1995) (internal citation omitted)

(quoting Motor Vehicle Mfrs., 463 U.S. at 48, 52). The

Commission's determination that CALEA requires carriers to

implement the four punch list items fails this test. The

Commission asserted that each of the challenged punch list

capabilities is required by CALEA because each requires

carriers to make available "call-identifying information," but

it never explained--not in the Order and not in its brief--the

basis for this conclusion. Nowhere in the record did the

Commission explain how the key statutory terms--origin,

direction, destination, and termination--can cover the wide

variety of information required by the punch list. For example, the Commission uses "origin" of a communication to

mean not only the telephone number of an incoming call, but

also a tone indicating that a new call is waiting. Adding the

waiting call to create a three-way call is yet another origin.

If a party is placed on hold and then re-joined to the call, the

Commission describes that event as "the temporary origin

... of a communication." Third Report & Order, 14 F.C.C.R.

at 16827 p 74. The Commission similarly uses "termination"

to cover many different kinds of information including telephone numbers of outgoing calls, signals indicating that calls

have been placed on hold or switched to waiting calls, signals

that parties have been dropped from conference calls, busy

signals, and ringing tones. Yet the Commission never explained how each of these bits of information "identifies the

... termination of each communication." 47 U.S.C.

s 1001(2) (emphasis added). Instead, it simply concluded,

with neither analysis nor explanation, that each capability is

required by CALEA. See, e.g., Third Report & Order, 14

F.C.C.R. at 16827 p 74 ("Party join information appears to

identify the origin of a communication; party drop, the

termination of a communication; and party hold, the tempoUSCA Case #99-1475 Document #536848 Filed: 08/15/2000 Page 15 of 25
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rary origin, temporary termination, or re-direction of a communication." (emphasis added)).

Perhaps the Commission can satisfactorily explain how

CALEA's terms can encompass such a wide range of information. Because it has not, we cannot tell whether the punch

list capability requirements are "the product of reasoned

decisionmaking." Motor Vehicle Mfrs., 463 U.S. at 52.

The Commission's failure to explain its reasoning is particularly serious in view of CALEA's unique structure. Rather

than simply delegating power to implement the Act to the

Commission, Congress gave the telecommunications industry

the first crack at developing standards, authorizing the Commission to alter those standards only if it found them "deficient." 47 U.S.C. s 1006(b). Although the Commission used

its rulemaking power to alter the J-Standard, it identified no

deficiencies in the Standard's definitions of the terms "origin," "destination," "direction," and "termination," which describe "call-identifying information" in terms of telephone

numbers. Were we to allow the Commission to modify the

J-Standard without first identifying its deficiencies, we would

weaken the major role Congress obviously expected industry

to play in formulating CALEA standards.

The Commission's decision to include the four challenged

punch list capabilities suffers from two additional defects.

The first relates to CALEA's requirements that Commission

rules must "meet the assistance capability requirements of

section 1002 of this title by cost-effective methods" and

"minimize the cost of such compliance on residential ratepayers." Id. s 1006(b)(1), (3). Faced with multiple cost estimates ranging as high as $4 billion for all carriers to implement the core J-Standard capabilities, the Commission

adopted an estimate submitted by five software suppliers

predicting that they would earn $916 million in revenues for

implementing the core J-Standard and $414 million for implementing the punch list. Third Report & Order, 14 F.C.C.R.

at 16805 p 20, 16809 p 30. The Commission acknowledged

that "these estimates ... do not represent all carrier costs of

implementing CALEA," id. at 16809 p 30, yet it found them to

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be "a reasonable guide of the costs to wireline, cellular, and

broadband PCS carriers for CALEA compliance," id.

The Commission never explained how its Order would

satisfy CALEA's requirements "by cost-effective methods."

47 U.S.C. s 1006(b)(1). It made no attempt to compare the

cost of implementing the punch list capabilities with the cost

of obtaining the same information through alternative means,

nor did it explain how it measured cost-effectiveness. Although it mentioned residential ratepayers, it never explained

what impact its Order would have on residential telephone

rates. Instead, pointing out that the telecommunications

industry, by ratifying the J-Standard, had agreed to its

implementation cost, the Commission compared the additional

cost of each punch list capability with the total cost of the

J-Standard and then concluded that each additional cost was

"not so exorbitant as to require automatic exclusion of the

capability." Third Report & Order, 14 F.C.C.R. at 16824

p 66, 16828 p 75, 16829-30 p 82, 16832 p 89. But why? The

Commission failed to explain how it decided that implementing the punch list capabilities, which increase J-Standard

costs by more than 45 percent (even by the Commission's

conservative estimates) is "not so exorbitant." Suppose

punch list costs had exceeded J-Standard costs by 90 percent.

Would that have been too "exorbitant"? Asked this question

at oral argument, Commission counsel told us only, "I suppose it is a line-drawing exercise."

The Commission's response to CALEA's cost directives

reflects a classic case of arbitrary and capricious agency

action. Fundamental principles of administrative law require

that agency action be "based on a consideration of the relevant factors," Citizens to Preserve Overton Park, Inc. v.

Volpe, 401 U.S. 402, 416 (1971), and rest on reasoned decisionmaking in which "the agency must examine the relevant data

and articulate a satisfactory explanation for its action including a rational connection between the facts found and the

choice made," Motor Vehicle Mfrs., 463 U.S. at 43 (internal

quotation marks omitted). Of course, we do not require

"ideal clarity"; we will "uphold a decision ... if the agency's

path may reasonably be discerned." Bowman Transp., Inc.

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v. Arkansas-Best Freight System Inc., 419 U.S. 281, 286

(1974). On the record before us, however, we cannot "discern" how the Commission interpreted "cost-effective," nor

why it considered the substantial costs of the punch list

capabilities to be "not so exorbitant," nor finally what impact

it thought the Order would have on residential ratepayers.

Missing, in other words, is "a rational connection between the

facts found and the choice made." Motor Vehicle Mfrs., 463

U.S. at 43.

The second defect in the Order relates to the Commission's

failure to comply with CALEA's requirement that it "protect

the privacy and security of communications not authorized to

be intercepted," 47 U.S.C. s 1006(b)(2), with respect to postcut-through dialed digit extraction. This punch list capability

requires carriers to electronically monitor the communications channel that carries audible call content in order to

decode all digits dialed after calls are connected or "cut

through." Some post-cut-through dialed digits are telephone

numbers, such as when a subject places a calling card, credit

card, or collect call by first dialing a long-distance carrier

access number and then, after the initial call is "cut through,"

dialing the telephone number of the destination party. Postcut-through dialed digits can also represent call content. For

example, subjects calling automated banking services enter

account numbers. When calling voicemail systems, they enter passwords. When calling pagers, they dial digits that

convey actual messages. And when calling pharmacies to

renew prescriptions, they enter prescription numbers.

The government contends that a law enforcement agency

may receive all post-cut-through digits with a pen register

order, subject to CALEA's requirement that the agency uses

"technology reasonably available to it" to avoid processing

digits that are content. 18 U.S.C. s 3121(c). No court has

yet considered that contention, however, and it may be that a

Title III warrant is required to receive all post-cut-through

digits. The Commission therefore had a statutory obligation

to address how its Order, which requires the capability to

provide all dialed digits pursuant to a pen register order,

would "protect the privacy and security of communications

not authorized to be intercepted." 47 U.S.C. s 1006(b)(2).

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The Commission spoke of law enforcement's need to obtain

post-cut-through dialed digits and of the cost of providing

them, but it never explained, as CALEA requires, how its

rule will "protect the privacy and security of communications

not authorized to be intercepted."

Several commenters, moreover, suggested ways in which

law enforcement agencies having only pen register orders

could obtain post-cut-through phone numbers while protecting the privacy of call content. The Commission rejected

these alternatives, claiming not that they are technologically

infeasible, but that they "would shift the cost burden from the

originating carrier to the LEA," "could be time-consuming,"

and might burden law enforcement's ability "to conduct electronic surveillance effectively and efficiently." Third Report

& Order, 14 F.C.C.R. at 16845 p 121. This is an entirely

unsatisfactory response to CALEA's privacy provisions. The

statute requires the Commission to consider more than the

burden on law enforcement--after all, any privacy protections

burden law enforcement to some extent. The Commission's

rules must not only meet CALEA's "assistance capability

requirements," 47 U.S.C. s 1006(b)(1), but also "protect the

privacy and security of communications not authorized to be

intercepted," id. s 1006(b)(2).

The absence of any meaningful consideration of privacy

with respect to dialed digit extraction does not seem to stem

from a failure on the Commission's part to understand the

privacy consequences of its Order. To the contrary, recognizing that there is no way to distinguish between digits dialed

to route calls and those dialed to communicate information,

the Commission expressed "concern[ ] about ... the privacy

implications of permitting LEAs to access non-call-identifying

digits (such as bank account numbers) with only a pen

register warrant." Third Report & Order, 14 F.C.C.R. at

16846 p 123. Yet the Order requires carriers to make available all post-cut-through dialed digits--those that convey

content as well as telephone numbers.

Asked at oral argument to point out how the Commission

applied CALEA's privacy mandate to post-cut-through dialed

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digits, Commission counsel stated, "we addressed ourselves to

the privacy questions with a little bit of hand wringing and

worrying...." Transcript of Oral Argument at 29. Neither

hand wringing nor worrying can substitute for reasoned

decisionmaking.

For the foregoing reasons, we vacate the portions of the

Commission's Order dealing with the four challenged punch

list capabilities and remand for further proceedings consistent

with this opinion.

Location Information

We reach a different conclusion with respect to the Commission's refusal to remove the antenna tower location information capability from the J-Standard. This provision requires carriers to make available the physical location of the

antenna tower that a mobile phone uses to connect at the

beginning and end of a call. Unlike the Commission's adoption of the punch list, its decision with regard to location

information is both reasoned and reasonable.

To begin with, as the Commission observed in the Third

Report & Order, defining "call-identifying information" to

include antenna tower location finds support in

CALEA's text. In particular, section 103(a)(2) provides that

"with regard to information acquired solely pursuant to the

authority for pen registers and trap and trace devices ...

call-identifying information shall not include any information

that may disclose the physical location of the subscriber

(except to the extent that the location may be determined

from the telephone number)." 47 U.S.C. s 1002(a)(2). As we

note above, the Commission read this provision to imply that

location information falls within the definition of callidentifying information. Section 103(a)(2), the Commission

ruled, "simply imposes upon law enforcement an authorization

requirement different from that minimally necessary for use

of pen registers and trap and trace devices." Third Report &

Order, 14 F.C.C.R. at 16815 p 44. Disagreeing, petitioners

argue that section 103(a)(2) narrows the definition of callidentifying information and should not be read as an affirmative grant of authority for law enforcement agencies to obtain

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location information. As the Commission explained, however,

if "call-identifying information" did not include location information, this provision would have no function. See id. at

16815 p 44 & n.95. In reaching this conclusion, the Commission was simply following the well-accepted principle of statutory construction that requires every provision of a statute to

be given effect. See Washington Market Co. v. Hoffman, 101

U.S. 112, 115-16 (1879) ("We are not at liberty to construe

any statute so as to deny effect to any part of its language.").

The Commission's approach to location information also

finds support in CALEA's use of the word "signaling" in the

definition of "call-identifying information." As the agency

explains in its brief, a mobile phone "sends signals to the

nearest cell site at the start and end of a call. These signals,

which are necessary to achieve communications between the

caller and the party he or she is calling, clearly are 'signaling

information.' Information about the cell sites associated with

mobile calls therefore falls squarely within the statutory

definition of call-identifying information." Brief for Federal

Communications Commission at 38.

Not only did the Commission elucidate the textual basis for

interpreting "call-identifying information" to include location

information, but it also explained how that result comports

with CALEA's goal of preserving the same surveillance capabilities that law enforcement agencies had in POTS (plain old

telephone service). "[I]n the wireline environment," the

Commission explained, law enforcement agencies "have generally been able to obtain location information routinely from

the telephone number because the telephone number usually

corresponds with location." Third Report & Order, 14

F.C.C.R. at 16816 p 45. In the wireless environment, "the

equivalent location information" is "the location of the cell

sites to which the mobile terminal or handset is connected at

the beginning and at the termination of the call." Id. Accordingly, the Commission concluded, "[p]rovision of this

particular location information does not appear to expand or

diminish law enforcement's surveillance authority under prior

law applicable to the wireline environment." Id.

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The Commission's refusal to remove location information

from the J-Standard, moreover, does not share the other

problems that led us to vacate the punch list portion of the

Third Report & Order. As to cost, location information was

included in the J-Standard adopted by industry, so it is

unaffected by the deficiencies in the Commission's cost analysis. And in contrast to dialed digit extraction, the Commission's analysis of the location capability did more than just

pay lip service to CALEA's privacy requirements. Most

important, the Commission demonstrated its understanding

that antenna location information could only be obtained with

something more than a pen register order, see id. at 16815

p 44, a point the Justice Department concedes in its brief: "A

pen register order does not by itself provide law enforcement

with authority to obtain location information, and we have

never contended otherwise." Final Brief for the United

States at 19. Expressly relying on CALEA's privacy protection provisions, moreover, the Commission rejected a New

York Police Department proposal that would have required

triangulating signals from multiple cellular antenna towers to

pinpoint a wireless phone's precise location throughout a call's

duration. See Third Report & Order, 14 F.C.C.R. at 16816

p 46. "[S]uch a capability," the Commission found, "poses

difficulties that could undermine individual privacy." Id.

For these reasons, we deny the petitions for review with

respect to location information.

III

This brings us to petitioners' challenge to the Commission's

decision not to remove the packet-mode data requirement

from the J-Standard. In conventional circuit-mode telecommunications, a single circuit is opened between caller and

recipient and all electronic signals that make up the communication travel along the circuit. In digital packet-switched

networks, communications do not travel along a single path.

Instead, a call is broken into a number of discrete digital data

packets, each traveling independently through the network

along different routes. Data packets are then reassembled in

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ope, each digital packet has two components: it contains a

portion of the communication message, and it bears an address to ensure that it finds its way to the correct destination

and is reassembled in proper sequence. The address information appears in the packet's "header." The message within the packet is known as the "body" or "payload." The

J-Standard requires that carriers make available both header

and payload.

Telecommunication carrier petitioners claim that packet

headers (call-identifying information) cannot be separated

from packet bodies or payloads (call content). Accordingly,

they and the privacy petitioners argue that any packet-mode

data provided to a law enforcement agency pursuant to a pen

register order will inevitably include some call content, thus

violating CALEA's privacy protections. The FBI disagrees.

"[A]s a technical matter," it argued before the Commission,

"it is perfectly feasible for a LEA to employ equipment that

distinguishes between a packet's header and its communications payload and makes only the relevant header information

available for recording or decoding." Third Report & Order,

14 F.C.C.R. at 16818 p 54.

The Commission considered these conflicting views about

the feasibility of separating call content from packet header

data, concluding that "the record is not sufficiently developed

to support any particular technical requirements for packetmode communications." Id. at 16817 p 48. At the same time,

the Commission acknowledged that "privacy concerns could

be implicated if carriers were to give to LEAs packets

containing both call-identifying and call content information

when only the former was authorized." Id. Stating that

"further efforts can be made to find ways to better protect

privacy by providing law enforcement only with the information to which it is lawfully entitled," the Commission asked

the Telecommunications Industry Association, which developed the J-Standard, "to study CALEA solutions for packetmode technology and report to the Commission in one year

on steps that can be taken, including particular amendments

to [the J-Standard], that will better address privacy concerns." Id. at 16819 p 55. In the meantime, however, finding

the record insufficient to warrant modification of the

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J-Standard's packet-mode data provision, the Commission

directed that it be implemented "no later than September 30,

2001." Id. "That date," the Commission explained, "is 15

months after the June 30, 2000 CALEA compliance deadline,

and will afford manufacturers that have not yet developed a

packet-mode capability the time needed to do so." Id. At

the same time, the Commission emphasized that it viewed this

as an interim solution. "We recognize that, in view of the

growing importance of packet-mode communications, a timely

permanent solution is essential. Accordingly, we expect that

TIA will deliver a report to us no later than September 30,

2000 that will detail a permanent solution...." Id. at 16820

p 56.

The Commission's denial of the petitions to remove packetmode data from the J-Standard suffers from none of the

shortcomings that undermined its handling of the punch list

capabilities. First, because nobody questions that packet

header information contains "call-identifying information," the

ambiguity of that term's definition does not affect the packetmode requirement. Second, as with location information, but

unlike the four punch list capabilities, because the packetmode requirement was included in the J-Standard adopted

by industry it is unaffected by the deficiencies in the Commission's cost analysis. Third, unlike the case of dialed digit

extraction, the Commission thoroughly considered the privacy

implications of packet-mode data and invited further study to

"better address privacy concerns." Id. at 16819 p 55.

Finally, nothing in the Commission's treatment of packetmode data requires carriers to turn over call content to law

enforcement agencies absent lawful authorization. Although

the Commission appears to have interpreted the J-Standard

as expanding the authority of law enforcement agencies to

obtain the contents of communications, see id., the Commission was simply mistaken. All of CALEA's required capabilities are expressly premised on the condition that any information will be obtained "pursuant to a court order or other

lawful authorization." 47 U.S.C. s 1002(a)(1)-(3). CALEA

authorizes neither the Commission nor the telecommunications industry to modify either the evidentiary standards or

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procedural safeguards for securing legal authorization to obtain packets from which call content has not been stripped,

nor may the Commission require carriers to provide the

government with information that is "not authorized to be

intercepted." Id. See also Final Brief for the United States

at 4 ("If the government lacks the requisite legal authority to

obtain particular information, nothing in Section 103 obligates

a carrier to provide such information."). Petitioners thus

have no reason to fear that "compliance with the Order will

force carriers to violate their duty under CALEA to 'protect

the privacy and security of communications ... not authorized to be intercepted.' " Final Brief of Petitioners USTA,

CTIA, and CDT at 35. We therefore deny the petition for

review with respect to packet-mode data.

IV

We grant the petitions for review in part, vacate the

provisions of the Third Report & Order dealing with the four

challenged punch list capabilities, and remand to the Commission for further proceedings consistent with this opinion. In

all other respects, we deny the petitions for review.

So 

ordered.

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