This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

23231

Vol. 63, No. 81

Tuesday, April 28, 1998

1CALEA § 109(e).

NORTHEAST DAIRY COMPACT

COMMISSION

7 CFR Ch. XIII

Meeting

AGENCY: Northeast Dairy Compact

Commission.

ACTION: Notice of meeting.

SUMMARY: The Compact Commission

will hold its monthly meeting to

consider bylaw amendments, issues

relating to the Commission’s upcoming

rulemaking procedure and matters

relating to administration.

DATES: The meeting is scheduled for

Thursday, May 7, 1998 commencing at

1:30 PM to adjournment.

ADDRESSES: The meeting will be held at

the Cat ’n Fiddle Restaurant, 118

Manchester Street, Concord, New

Hampshire (exit 13 off Interstate 93).

FOR FURTHER INFORMATION CONTACT:

Daniel Smith, Executive Director,

Northeast Dairy Compact Commission,

43 State Street, PO Box 1058,

Montpelier, VT 05601. Telephone (802)

229–1941.

SUPPLEMENTARY INFORMATION: Notice is

hereby given that the Northeast Dairy

Compact Commission will hold its

regularly scheduled monthly meeting.

The Commission will consider certain

bylaw amendments including the

separate promulgation as a rule of the

provisions relating to the referendum

procedure, administration matters and

issues relating to the Commission’s

upcoming rulemaking procedure.

(Authority: (a) Article V, Section 11 of the

Northeast Interstate Dairy Compact, and all

other applicable Articles and Sections, as

approved by Section 147, of the Federal

Agriculture Improvement and Reform Act

(FAIR ACT), Pub. L. 104–127, and as thereby

set forth in S.J. Res. 28(1)(b) of the 104th

Congress; Finding of Compelling Public

Interest by United States Department of

Agriculture Secretary Dan Glickman, August

8, 1996 and March 20, 1997. (b) Bylaws of

the Northeast Dairy Compact Commission,

adopted November 21, 1996.)

Daniel Smith,

Executive Director.

[FR Doc. 98–11184 Filed 4–27–98; 8:45 am]

BILLING CODE 1650–01–P

DEPARTMENT OF JUSTICE

28 CFR Part 100

RIN 1105–AA39

Implementation of Section 109 of the

Communications Assistance for Law

Enforcement Act: Proposed Definition

of ‘‘Significant Upgrade or Major

Modification’’

AGENCY: Federal Bureau of

Investigation, DOJ.

ACTION: Notice of proposed rulemaking.

SUMMARY: The FBI proposes to amend

the Communications Assistance for Law

Enforcement Act (CALEA) Cost

Recovery Regulations by adding a new

section which defines the term

‘‘Significant Upgrade or Major

Modification.’’ This NPRM sets forth

both the FBI’s proposed section and the

rationale behind the proposed

definition. The addition of this section

will clarify the applicability of the

CALEA, Cost Recovery Regulations and

assist the telecommunications industry

in assessing its responsibilities under

CALEA.

DATES: Comments must be received on

or before June 29, 1998.

ADDRESSES: Comments should be

submitted to the Telecommunications

Contracts and Audit Unit, Federal

Bureau of Investigation, P.O. Box

221286, Chantilly, VA 20153–0450,

Attention: CALEA FR Representative.

All comments will be available from the

FBI Reading Room located at FBI

Headquarters, 935 Pennsylvania

Avenue, NW., Washington, DC 20535.

To review the comments, interested

parties should contact Ms. Mary

Stuzman, FBI Reading Room, FBI

Headquarters, telephone number (202)

324–2664, to schedule an appointment

(48 hours advance notice required). See

Section G of the Supplementary

Information for further information on

electronic submission of comments.

FOR FURTHER INFORMATION CONTACT:

Walter V. Meslar, Unit Chief,

Telecommunications Contracts and

Audit Unit, Federal Bureau of

Investigation, P.O. Box 221286,

Chantilly, VA 20153–0450, telephone

number (703) 814–4900.

SUPPLEMENTARY INFORMATION:

A. General Background

Recent and continuing advances in

telecommunications technology and the

introduction of new digitally-based

services and features have impaired the

ability of federal, state, and local law

enforcement agencies to fully and

properly conduct various types of courtauthorized electronic surveillance.

Therefore, on October 25, 1994, the

President signed into law the

Communications Assistance for Law

Enforcement Act (CALEA) (Public Law

103–414, 47 U.S.C. 1001 et seq.). This

law requires telecommunications

carriers, as defined in CALEA, to ensure

that law enforcement agencies, acting

pursuant to court order or other lawful

authorization, are able to intercept

communications regardless of advances

in telecommunications technologies.

Under CALEA, certain

implementation responsibilities are

conferred upon the Attorney General;

the Attorney General has, in turn,

delegated responsibilities set forth in

CALEA to the Director, FBI, or his

designee, pursuant to 28 CFR 0.85(o).

The Director, FBI, has designated the

Telecommunications Industry Liaison

Unit of the Information Resources

Division and the Telecommunications

Contracts and Audit Unit of the Finance

Division to carry out these

responsibilities.

One of the CALEA implementation

responsibilities delegated to the FBI is

the establishment, after notice and

comment, of regulations necessary to

effectuate timely and cost-efficient

payment to telecommunications carriers

for certain modifications made to

equipment, facilities and services

(hereafter referred to as ‘‘equipment’’) to

make that ‘‘equipment’’ compliant with

CALEA.1 Section 109(b)(2) of CALEA

authorizes the Attorney General, subject

to the availability of appropriations, to

agree to pay telecommunications

carriers for additional reasonable costs

directly associated with making the

assistance capability requirements

found in section 103 of CALEA

reasonably achievable with respect to
23232 Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules

2CALEA Section 109(b)(1) sets forth the

procedures and the criteria the Federal

Communications Commission (FCC) will use to

determine if the modifications are ‘‘reasonably

achievable’’.

3 ‘‘Significant upgrade or major modification’’

also appears in CALEA § 108(c)(3)(B) with regard to

the limitations placed upon the issuance of

enforcement orders under 18 U.S.C. 2522.

‘‘equipment’’ installed or deployed after

January 1, 1995, in accordance with the

procedures established in section

109(b)(1) of CALEA.2 Section 104(e) of

CALEA authorizes the Attorney General,

subject to the availability of

appropriations, to agree to pay

telecommunications carriers for

reasonable costs directly associated with

modifications of any of a carrier’s

systems or services, as identified in the

Carrier Statement required by CALEA

section 104(d), which do not have the

capacity to accommodate

simultaneously the number of

interceptions, pen registers, and trap

and trace devices set forth in the

Capacity Notice(s) published in

accordance with CALEA section 104.

Finally, section 109(a) of CALEA

authorizes the Attorney General, subject

to the availability of appropriations, to

agree to pay telecommunications

carriers for all reasonable costs directly

associated with the modifications

performed by carriers in connection

with ‘‘equipment’’ installed or deployed

on or before January 1, 1995, to establish

the capabilities necessary to comply

with the assistance capability

requirements found in section 103 of

CALEA. However, reimbursement under

section 109(a) of CALEA is modified by

the requirements of section 109(d),

which states:

If a carrier has requested payment in

accordance with procedures promulgated

pursuant to subsection (e) [Cost Control

Regulations], and the Attorney General has

not agreed to pay the telecommunications

carrier for all reasonable costs directly

associated with modifications necessary to

bring any equipment, facility, or service

deployed on or before January 1, 1995, into

compliance with the assistance capability

requirements of section 103, such equipment,

facility, or service shall be considered to be

in compliance with the assistance capability

requirements of section 103 until the

equipment, facility, or service is replaced or

significantly upgraded or otherwise

undergoes major modification. (emphasis

added).

While this section deals specifically

with a carrier’s compliance with

CALEA, the phrase ‘‘significantly

upgraded or otherwise undergoes major

modification’’ (hereafter referred to as

‘‘significant upgrade or major

modification’’), depending on a carrier’s

actions after January, 1995, also has a

direct bearing on the eligibility for

reimbursement of some ‘‘equipment’’

installed or deployed on or before

January 1, 1995.3

B. CALEA Cost Recovery Regulations

As required by CALEA § 109(e), the

FBI, after notice and comment,

promulgated the CALEA Cost

Regulations (62 FR 13307, 28 CFR part

100), which establish the procedures

which telecommunications carriers

must follow in order to receive

reimbursement under Sections 109(a),

109(b) and 104(e) of CALEA, as

discussed above. Specifically, the Cost

Recovery Regulations set forth the

means of determining allowable costs,

reasonable costs, and disallowed costs.

Furthermore, they establish the

threshold requirements carriers must

meet in their submission of cost

estimates and requests for payment to

the Federal Government for the

disbursement of CALEA funds.

Additionally, they ensure the

confidentiality of trade secrets and

protect proprietary information from

unnecessary disclosure. Finally, they set

forth the means for alternative dispute

resolution.

Of particular interest for the purposes

of this proposed amendment to the Cost

Recovery Regulations is § 100.11(a)(1) of

28 CFR part 100, which includes in the

costs eligible for reimbursement under

section 109(e) of CALEA:

All reasonable plant costs directly

associated with the modifications performed

by carriers in connection with equipment,

facilities, and services installed or deployed

on or before January 1, 1995, to establish the

capabilities necessary to comply with section

103 of CALEA, until the equipment, facility,

or service is replaced or significantly

upgraded or otherwise undergoes major

modifications; (emphasis added).

At the proposed rule stage of the

rulemaking process establishing the

Cost Recovery Regulations, the FBI

received comments from 16

representatives of the

telecommunications industry, including

wireline and wireless carriers and

associations. Of the 16 sets of comments

received on the proposed rule, half

requested that the FBI define

‘‘significant upgrade or major

modification’’ as used in § 100.11(a)(1)

of the proposed cost recovery rules.

Given the dynamic nature of the

telecommunications industry and the

potential impact on eligibility for

reimbursement, the FBI acknowledged

that ‘‘significant upgrade or major

modification’’ must be defined.

Therefore, on November 19, 1996, the

FBI published an Advanced Notice of

Proposed Rulemaking (ANPRM) in the

Federal Register (61 FR 58799), which

solicited the submission of potential

definitions of ‘‘significant upgrade or

major modification’’ from the

telecommunications industry and the

general public. This ANPRM was also

sent to a large number of associations

representing the interests of the various

telecommunications carriers, both

wireless and wireless.

In response to the ANPRM, the FBI

received comments from 13

representatives of the

telecommunications industry, including

wireless and wireless carriers and

associations. All comments received

have been fully considered in preparing

this proposed definition of ‘‘significant

upgrade or major modification.’’

Significant comments received in

response to the ANPRM are also

summarized in Section D, below.

Additionally, in developing this

proposed definition, the FBI has relied

on the input of other governmental

agencies and telecommunications

industry experts.

C. Definition Development

1. Introduction

Committed to the consultative process

and to maintaining an on-going dialogue

with the telecommunications industry,

the FBI published its ANPRM in order

to draw on the expertise of that industry

so that the FBI could gain an

understanding of the range of options

available with regard to ‘‘significant and

upgrade or major modification.’’

Therefore, the FBI requested that

telecommunications carriers and other

interested parties submit potential

definitions of ‘‘significant upgrade or

major modification’’ in response to the

ANPRM. However, the FBI did not leave

off working on a definition of

‘‘significant upgrade or major

modification’’ in the interim. Rather, the

FBI, in addition to considering the

potential definitions submitted by the

industry, also explored a number of

means of defining this term.

Specifically, the FBI has examined three

definitional approaches: Accounting,

Technical, and Public Safety. Each of

these approaches, along with relevant

public comments received and the

results of the Bureau’s research, is

discussed in detail below.

2. Accounting Approaches

In order to define ‘‘significant upgrade

or major modification’’ in accounting

terms, the FBI first sought to determine

at what point expenditures would be

considered significant in either dollar or
Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules 23233

4 47 U.S.C. 310(b)(3).

5Telephone Number Portability, First Report and

Order and Further Notice of Proposed Rule Making,

CC Docket No. 95–116 (1996), paragraph 122.

percentage terms. It became

immediately apparent that a specific

dollar figure could not be determined in

light of the differences between wireline

and wireless switching equipment and

the dearth of available information on

wireless carrier expenditures.

In an effort to establish the threshold

for significance in terms of a specific

percentage, the FBI researched several

accounting and procurement regulation

sources. As a result of this research, the

FBI identified two references which

generally support 20% as being the

threshold for significance. In the

Accounting Principles Board Opinion18 (APB–18) pronouncement

concerning the equity method of

accounting for investments in common

stock, the term ‘‘significant’’ is used

when it refers to influence over the

operating and financial policies of the

investee. APB–18, paragraph 17, reads:

‘‘Absent evidence to the contrary, an

investment (directly or indirectly) of

20% or more in the voting stock of an

investee is presumed to indicate the

ability to exercise significant influence,

and the equity method is required for

fair presentation.’’ There was also a

presumption in APB–18 that

‘‘significant’’ influence does not exist in

an investment of less than 20%.

The use of the 20% threshold for

significance is also supported in the

Communications Act of 1934, Section

310, which indicates that a station

license shall not be granted to ‘‘any

corporation of which more than onefifth of the capital stock is owned of

record or voted by aliens.’’ 4 This would

seem to indicate that control of 20% of

the capital stock imparts significant

influence upon the stockholder.

In each of the above references it can

be inferred that 20% was considered to

be the threshold for significance.

Translating this inference to the task of

defining ‘‘significant upgrade or major

modification,’’ it could be argued that

any telecommunications carrier that

incurred expenditures equal to or

exceeding 20% of the

telecommunications plant in-service

value of a switch has made a

‘‘significant upgrade or major

modification’’ to that switch.

Based on this premise the FBI could

define ‘‘significant upgrade or major

modification’’ in financial terms as

follows: ‘‘A significant upgrade or major

modification is defined as any

improvement to a carrier’s existing

equipment, facilities, or services for

which the construction, installation,

and acquisition costs of the project

equal or exceed 20% of the

telecommunications plant in-service

value in switching equipment and

switching assets used for stored program

control.’’

However, this accounting definition

ultimately proved untenable. First, it is

possible for a carrier to make a

modification or upgrade which could

cross the 20% threshold, yet have no

impact on law enforcement’s ability to

conduct lawfully authorized electronic

surveillance. Such an occurrence would

be inconsistent with the intent of

CALEA. Additionally, given the wide

variety of network-based systems in use

today, it would be extremely difficult to

determine precisely to what the 20%

threshold should apply (e.g., the entire

network, a specific switch, an available

feature). In practice, applying such a

percentage to a telecommunications

network would ultimately create more

confusion than it would resolve.

Therefore, the FBI discarded this

approach.

3. Technical Approaches

The FBI also considered a number of

technical approaches to defining

‘‘significant upgrade or major

modification.’’ The term ‘‘significant’’

was used in relation to equipment

upgrades by the Federal

Communications Commission (FCC) in

only one telecommunications

proceeding during the past few years:

FCC Docket Number 95–116, Telephone

Number Portability (‘‘Number

Portability Proceeding’’). The discussion

of implementation costs in the Number

Portability Proceeding states: ‘‘longterm, or database, number portability

methods require significant network

upgrades, including installation of

number portability-specific switch

software, implementation of Signaling

System No. 7 and Intelligent Network or

Advance Intelligent Network capability,

and the construction of multiple

number portability databases.’’ 5 This

specific reference to ‘‘significant

network upgrades’’ does not, however,

provide a generic definition; rather, it

provides only examples of upgrades

which could be considered significant.

As the FBI worked through a number

of technical definitions, some dealing

with software generics, some dealing

with switch architecture, it became

apparent that every technical definition

was open to question on some type of

equipment. Furthermore, each technical

definition proposed left ambiguities and

called for constant definition of the

terms used. Therefore, the FBI discarded

this approach for the long term.

4. Public Safety Approaches

The intent of CALEA is to ensure that

law enforcement agencies, acting

pursuant to court order or other lawful

authorization, will continue to be able

to interpret communications regardless

of advances in telecommunications

technologies. Therefore, the FBI began

to look at defining ‘‘significant upgrade

or major modification’’ from a public

safety perspective. In doing so, the FBI

determined that any new modification

or upgrade which created an

impediment to lawfully authorized

electronic surveillance could be

considered ‘‘significant’’ or ‘‘major’’

given the intent of CALEA in that it

would endanger public safety and

prevent law enforcement from carrying

out its mission. Therefore, the FBI

developed the following definition: ‘‘the

term ‘significant upgrade or major

modification’ means any change,

whether through addition or other

modification, to any equipment, facility

or service that impedes law

enforcement’s ability to conduct

lawfully authorized electronic

surveillance.’’

However, the FBI recognizes that

events have overtaken the CALEA

implementation process, specifically the

enactment of the Telecommunication

Act of 1996, and that carriers could not

cease all activity on their systems until

a definition of ‘‘significant upgrade or

major modification’’ was promulgated.

Therefore, in the interests of

reasonableness, the FBI developed the

following bipartite definition:

§ 100.22 Definition of ‘‘significant upgrade

or major modification.’’

(a) For equipment, facilities or services for

which an upgrade or modification has been

completed on or before October 25, 1998, the

term ‘‘significant upgrade or major

modification’’ means any fundamental or

substantial change in the network

architecture or any change that

fundamentally alters the nature or type of the

existing telecommunications equipment,

facility, or service that impedes law

enforcement’s ability to conduct lawfully

authorized electronic surveillance, unless

such change is mandated by a Federal or

State statute;

(b) For equipment, facilities or services for

which an upgrade or modification is

completed after October 25, 1998, the term

‘‘significant upgrade or major modification’’

means any change, whether through addition

or other modification, to any equipment,

facility or service that impedes law

enforcement’s ability to conduct lawfully

authorized electronic surveillance, unless

such change is mandated by a Federal or

State statute.
23234 Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules

6CALEA § 109(d).

The technical terminology in proposed

§ 100.22(a) is derived from the

comments submitted by the

telecommunications industry in

response to the ANPRM. Given that

October 25, 1998 is the compliance date

for CALEA capability, the FBI believes

that this initial definition will give

carriers the time they need to make

appropriate business decisions about

their ‘‘equipment’’ in light of CALEA’s

‘‘significant upgrade or major

modifications’’’ clause and will not

penalize carries for most upgrades or

modifications made to their

‘‘equipment’’ while both a definition of

‘‘significant upgrade or major

modification’’ and a CALEA solution

were unavailable. However, carriers

who made upgrades or modifications

about which no argument can be made

regarding their ‘‘significance’’ (e.g.

changing from analogue to digital

switching) will still be required to

comply with CALEA at their own

expense.

Proposed § 100.22(b) will then carry

out the intent of CALEA by ensuring

that law enforcement will continue to be

able to carry out lawfully authorized

electronic surveillance in cases where

carriers made informed business

decisions to modify or upgrade their

equipment in such a way which

impedes law enforcement. Carriers do

not modify or upgrade equipment at

random; such business decisions are

made so that they will ultimately

increase a carrier’s revenue. With the

promulgation of this definition, carriers

will be able to factor the requirements

and costs of CALEA compliance into

their decisions, thereby being able to

determine if upgrading or modification

is the best decision at that time.

D. Industry Comments in Response to

ANPRM

In response to the ANPRM,

commenters raised a number of issues,

many of which had little direct bearing

on the issue of defining the term

‘‘significant upgrade or major

modification’’ and have since been

addressed in the final CALEA cost

recovery rule (62 FR 13307). Therefore,

the FBI has opted to address in this

document only those comments which

have a direct bearing on ‘‘significant

upgrade or major modification’’ and

which have not been previously

addressed in print.

1. Definition of ‘‘Installed or Deployed’’

The CALEA Cost Recovery Rules (28

CFR part 100) define ‘‘installed or

deployed’’ as follows: ‘‘Installed or

deployed means that, on a specific

switching system, equipment, facilities,

or services are operable and available

for use by the carrier’s customers.’’ (28

CFR 100.10). Several commenters

responding to the ANPRM argues that

‘‘deployed’’ should mean

‘‘commercially available prior to

January 1, 1995’’ and should, therefore,

be defined separately from ‘‘installed.’’

The FBI believes that the commenters’

proposed definition of ‘‘deployed’’ as it

is used in CALEA is incorrect. CALEA

section 109(e)(3), Submission of Claims,

reads: ‘‘Such [Cost Control] regulations

shall require any telecommunications

carrier that the Attorney General has

agreed to pay for modifications pursuant

to [section 109] and that has installed

or deployed such modification to submit

to the Attorney General a claim for

payment * * *’’ (Emphasis added). It is

unlikely that the Congress intended that

carriers be able to submit claims for

payment simply because a piece of

equipment was commercially available.

It is also unlikely that the Congress

intended that the Attorney General

agree to reimburse carriers for

commercially available equipment

sitting in their warehouses. Rather, it

seems clear that the Congress intended

that claims be submitted only for such

equipment for which the CALEA

solution was ‘‘operable and available for

use,’’ or ‘‘deployed.’’ Therefore, no

change to the definition of ‘‘installed or

deployed’’ has been made.

2. Definition of ‘‘Replaced’’

Some commenters requested that the

FBI defined ‘‘replaced’’ as used in the

phrase ‘‘replaced or significantly

upgraded or otherwise undergoes major

modification.’’ 6 These commenters

advocated defining ‘‘replaced’’ as

meaning the installation of equipment,

facilities or services which became

commercially available after January 1,

1995 and which are not upgrades or

modifications to equipment, facilities or

services commercially available prior to

January 1, 1995. However, the plain

language of CALEA never addresses the

issue of commercial availability with

regard to grandfathered equipment;

rather, CALEA repeatedly refers to the

date of installation or deployment as the

relevant date for reimbursement

eligibility. Additionally, unlike the

potentially subjective or ambiguous

nature of the term ‘‘significant upgrade

or major modification,’’ the meaning of

the term ‘‘replaced’’ is both clear and

common. Therefore, the FBI does not

intend to define this term.

3. Just Compensation

Some commenters asserted that an

overly broad definition of ‘‘significant

upgrade or major modification’’ would

constitute a taking for which the carriers

would be entitled to full compensation

pursuant to the Just Compensation

Clause of the Fifth Amendment of the

Constitution of the United States. One

commenter asserted that this was so

regardless of whether Congress provides

funding for CALEA cost reimbursement.

No set formula exists for identifying

when Government regulatory action

constitutes a ‘‘taking’’ under the

Constitution; the Supreme Court has

instead generally relied on an ad hoc,

factual inquiry into the circumstances of

each particular case. The Supreme court

has, however, indicated that the

following factors have particular

significance: (1) The severity of the

economic impact of the regulation on

the claimant; (2) the extent to which the

regulation has interfered with distinct

investment-backed expectations; and (3)

the character of the government action.

See Concrete Pipe and Products of

California, Inc. v. Construction Laborers

Pension Trust for So. California, 508

U.S. 602, 113 S.Ct. 2264, 124 L.Ed. 2d

539 (1993); Connolly v. Pension Benefit

Guaranty Corp., 475 U.S. 211, 106 S.Ct.

1018, 89 L.Ed.2d 166 (1986); see also

Lucas v. South Carolina Coastal

Commission, 505 U.S. 1003, 112 St.Ct.

2886, 120 L.Ed.2d 798 (1992).

In response to the comments received,

the FBI has analyzed these factors and

has concluded that the proposed

definition of ‘‘significant upgrade or

major modification’’ does not amount to

a compensable taking. First, the FBI

does not believe that the economic

impact of this definition on carriers will

rise to the level of a taking requiring

compensation. The proposed definition

will not significantly impair the

economically beneficial use of the

carriers’ property, and the value of such

property will not be substantially

reduced. If any such reduction does

occur, CALEA section 109(b) provides a

mechanism whereby carriers may

petition the FCC for relief through a

determination that CALEA compliance

is not reasonably achievable. Moreover,

it has been held that ‘‘mere diminution

in the value of property, however

serious, is insufficient to demonstrate a

taking.’’ Concrete Pipe, 508 U.S. at 645.

Second, this definition, and the

regulations of which it is a part, will not

interfere with investment-backed

expectations of the carriers. Carriers

have cooperated with the execution of

court-ordered electronic surveillance for

some time now. Carriers could,
Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules 23235

7See, however, the amendments to the

Communications Act of 1934 contained in Title III

of CALEA, specifically 47 U.S.C. 229(a): ‘‘In

general—the Commission shall prescribe such rules

as are necessary to implement the requirements of

the Communications Assistance for Law

Enforcement Act.’’ 8CALEA § 107(a)(3)(B).

consequently, readily anticipate that

such wiretapping would continue and

that the mechanisms of such

wiretapping would evolve as

telecommunications technology

advanced. These regulations do not

expand law enforcement authority but

merely maintain the ability of law

enforcement to conduct court-ordered

surveillance. Carriers had no reasonable

expectation that they would not be

required to continue to provide

assistance to law enforcement. Finally,

the character of the government action

involved suggests that regulations do

not involve a compensable taking. In

carrying out CALEA, no law

enforcement agency will physically

invade any carriers’ property or

appropriate any carriers’ assets for its

own use. The FBI feels that the

regulations of which this definition is a

part substantially advance the Nation’s

legitimate interests in preserving public

safety and national security. These

interests would unquestionably be

jeopardized without the ability to

conduct court-ordered electronic

surveillance. Such wiretaps are critical

to saving lives and preventing and

solving crimes. In sum, the FBI does not

believe that the carriers are being forced

to bear a burden ‘‘which, in all fairness

and justice, should be borne by the

public as a whole.’’ Armstrong v. United

States, 364 U.S. 40, 49, 80 S.Ct. 1563,

4 L.Ed.2d 1554 (1960).

4. FBI Authority To Define ‘‘Significant

Upgrade or Major Modification’’

Some commenters challenged the

FBI’s authority to define the term

‘‘significant upgrade or major

modification,’’ asserting that final

authority rests with either the FCC or

the courts. The FBI began this

rulemaking proceeding regarding

‘‘significant upgrade or major

modification’’ at the request of

commenters on the proposed cost

recovery rule. In fact, some of the same

entities which requested in their

comments on the proposed CALEA cost

recovery rule that the FBI define

‘‘significant upgrade or major

modification,’’ are those who are now

challenging the FBI’s authority to do so.

There is no explicit language in

CALEA placing the definition of

‘‘significant upgrade or major

modification’’ under the FCC’s

authority.7 In fact, in light of the FCC’s

greater technical expertise, the FBI has

consulted on several occasions with the

FCC regarding the definition of

‘‘significant upgrade or major

modification.’’ The FBI offered to defer

to the FCC in this area; however, the

FCC determined that the definition of

‘‘significant upgrade or major

modification’’ falls within the FBI’s

CALEA implementation responsibilities,

specifically with regard to

reimbursement.

With regard to the courts, CALEA

section 108 does place the final

authority regarding this issue with the

courts in any enforcement order

proceeding. However, that should not

preclude the FBI from defining this term

so that carriers will know whether their

equipment, facilities and services are

grandfathered under CALEA section

109(d), whether they may be eligible for

compensation under CALEA section

109(a), and whether they may need to

petition the FCC under the provisions of

CALEA section 109(b). Therefore, the

FBI is proceeding with this rulemaking.

5. Potential Burden on Small Carriers

Two associations representing the

interests of carriers qualifying as ‘‘small

entities’’ for regulatory purposes sought

assurances that the proposed definition

of ‘‘significant upgrade or major

modification’’ would take into

consideration the potential burdens

imposed upon small carriers. The FBI is

cognizant of the needs of small carriers

and has taken these needs into

consideration during the development

of the proposed definition. This issue is

addressed at length in Section F, Initial

Regulatory Flexibility Analysis, below.

6. The Telecommunications Act of 1996

Several commenters were concerned

that upgrades and modifications

required by the Telecommunications

Act of 1996, as well as other federal and

state mandates, be exempt from

consideration as ‘‘significant upgrades

or major modifications’’ under CALEA.

The FBI is persuaded by these

comments and has worked such an

exemption into the proposed definition.

7. Availability of a CALEA Standard

Several commenters asserted that a

pre-condition for the occurrence of a

‘‘significant upgrade or major

modification’’ was the availability of an

industry-developed CALEA standard.

However, the plain language of CALEA

states that the absence of a standard

shall not ‘‘relieve a carrier,

manufacturer, or telecommunications

support services provider of the

obligations imposed by sections 103

[Assistance Capability Requirements] or

106 [Cooperation of Equipment

Manufacturers and Providers of

Telecommunications Support Services],

as applicable.’’ 8 Therefore, the FBI does

not accept this comment.

8. Availability of CALEA Compliant

Technology

Several commenters asserted that a

pre-condition for the occurrence of a

‘‘significant upgrade or major

modification’’ was the availability of

CALEA compliant technology. Carriers

could not be expected to include the

CALEA solution along with any

‘‘significant upgrade or major

modification’’ if such a solution did not

exist.

The FBI is cognizant of this issue and

has taken steps to minimize the impact

of the ‘‘significant upgrade or major

modification’’ clause in these

circumstances. To this end, the FBI has

proposed the bipartite definition

proposed above, which limits

‘‘significant upgrades or major

modifications’’ prior to October 25, 1998

to ‘‘any fundamental or substantial

change in the network architecture or

any change that fundamentally alters

the nature or type of the existing

telecommunications equipment, facility,

or service, that impedes law

enforcement’s ability to conduct

lawfully authorized electronic

surveillance, unless such change is

mandated by a Federal or State statute.’’

Given that October 25, 1998 is the

compliance date for CALEA capability,

the FBI believes that this initial

definition will give carriers the time

they need to make appropriate business

decisions about their ‘‘equipment’’ in

light of CALEA’s ‘‘significant upgrade or

major modification’’ clause and will not

penalize carriers for most upgrades or

modifications made to their

‘‘equipment’’ while the CALEA solution

is unavailable. However, carriers who

made upgrades or modifications about

which no argument can be made

regarding their ‘‘significance’’ (e.g.

changing from analogue to digital

switching) will still be required to

comply with CALEA at their own

expense.

9. Definition of ‘‘Significant Upgrade’’

Most commenters proposed a

definition of ‘‘significant upgrade or

major modification’’ similar to the one

proposed by the United States

Telephone Association (USTA):

Significant upgrade or major modification

includes only those upgrades or

modifications which are generally available

to the industry and installed/implemented in
23236 Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules

9U.S.C. 603.

10The Regulatory Flexibility Act, 5 U.S.C. § 601

et seq. has been amended by the Contract with

America Advancement Act of 1996, Pub. L. No.

104–121, 110 Stat. 847 (1996) (CWAAA). Title II of

the CWAAA is the ‘‘Small Business Regulatory

Enforcement Fairness Act of 1996’’ (SBREFA).

11 5 U.S.C. 601(3) (incorporating by reference the

definition of ‘‘small business concern’’ in 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 term

which are appropriate to the activities of the agency

and publishes such definition in the Federal

Register.’’

12 15 U.S.C. 632. See, e.g., Brown Transport

Truckload, Inc. v. Southern Wipers,. Inc., 176 B.R

82(Bankr. N.D.Ga. 1994).

13 2 CFR 121.201.

order to be consistent with industrydeveloped standards and/or FCC technical

requirements associated with

implementation of CALEA. Such upgrades or

modifications pertain only to facilities,

services, functions, etc. that affect

compliance with the capabilities [sic]

requirements of CALEA and represent

changes in the network architecture or

changes that fundamentally alter the nature

or type of the existing telecommunications

equipment, facility, or service. Such term

does not include upgrades and/or

modifications to networks mandated by state

or Federal law where CALEA compliant

technology is not available.

As discussed above, the FBI has taken

this proposed definition under

consideration and has incorporated

parts of it into the FBI’s own proposed

definition regarding upgrades and

modifications made between January 1,

1995 and the CALEA capability

compliance date of October 25, 1998.

The FBI has also included in toto the

proposed exemption for upgrades or

modifications required by state and

federal mandates. However, the FBI

believes that this definition will not

satisfy the intent of CALEA in the long

term. Therefore, the FBI has broadened

the definition for modifications

occurring after October 25, 1998 to

include any upgrade or modification

which impedes law enforcement’s

ability to carry out lawfully authorized

electronic surveillance. Such

impediments are clearly ‘‘significant’’

and ‘‘major’’ in that they endanger

public safety and prevent law

enforcement from carrying out its

mission. Therefore, the FBI can accept

the commenters proposed definition

only in part.

E. Applicable Administrative

Procedures and Executive Orders

1. Unfunded Mandates

The FBI has examined this proposed

rule in light of the Unfunded Mandates

Reform Act of 1995 and has tentatively

concluded that this proposed rule will

not result in the expenditure by State,

local, and tribal governments, in the

aggregate, or by the private sector, of

$100,000,000 or more (adjusted

annually for inflation) in any one year.

2. Executive Order 12866

The FBI examined this proposed rule

in light of Executive Order 12866 and

has found that it constitutes a

significant regulatory action only under

section 3(f)(4). In accordance with

section 6 of Executive Order 12866, the

FBI has submitted this proposed rule to

the Office of Information and Regulatory

Affairs, OMB, for review, and has met

all of the requirements of this section.

3. Executive Order 12612

This final rule does not have a

substantial direct effect on the States, on

the relationship between the national

Government and the States, or on

distribution of power and

responsibilities among the various

levels of government. Therefore, in

accordance with Executive Order 12612,

it is determined that this rule does not

have sufficient federalism implications

to warrant the preparation of a

Federalism Assessment.

4. Executive Order 12988

This proposed rule meets the

applicable standards set forth in

sections 3(a) and 3(b)(2) of Executive

Order 12988.

5. Paperwork Reduction Act of 1995

This proposed rule contains no

information collection requirements and

is not, therefore, subject to the

Paperwork Reduction Act of 1995.

F. Initial Regulatory Flexibility

Analysis

As required by the Regulatory

Flexibility Act (‘‘RFA’’),9 the FBI has

prepared an Initial Regulatory

Flexibility Analysis (‘‘IRFA’’) of the

expected significant economic impact

on small entities of this proposed rule.

Written public comments are requested

on the IRFA. Comments must be

identified as responses to the IRFA and

must be filed by the deadlines for

comments on the NPRM provided above

on the first page, in the heading. The

FBI shall send a copy of this NPRM,

including the IRFA, to the Chief

Counsel for Advocacy of the Small

Business Administration (SBA) in

accordance with section 603(a).10

1. Need for and Objectives of the

Proposed Rules

This NPRM responds both to the

legislative mandate contained in Section

109 of the Communications Assistance

for Law Enforcement Act, Pub. L. No.

103–414, 108 Stat. 4279 (1994) (codified

as amended in scattered sections of 18

U.S.C. and 47 U.S.C.) and to public

comments received in response to the

proposed CALEA Cost Recovery Rules

published in the Federal Register on

May 10, 1996 (61 FR 21396 .

2. Legal Basis

The proposed action is authorized

under the Communications Assistance

for Law Enforcement Act, Pub. L. No.

103–414, 108 Stat. 4279 (1994) (codified

as amended in scattered sections of 18

U.S.C. and 47 U.S.C.).

3. Description and Estimate of the

Number of Small Entities to Which the

Proposed Rules Will Apply.

This proposed rule may have a

significant economic impact on a

substantial number of small telephone

companies identified by the SBA. The

FBI seeks comment on how small

entities may be affected by the proposed

definition of ‘‘significant upgrade or

major modification.’’

The RFA generally defines ‘‘small

entity’’ as having the same meaning as

the term ‘‘small business,’’ ‘‘small

organization,’’ and ‘‘small governmental

jurisdiction’’ and the same meaning as

the term ‘‘small business concern’’

under the Small Business Act, unless an

agency has developed one or more

definitions that are appropriate to its

activities.11 Under the Small Business

Act, a ‘‘small business concern’’ is one

that: (1) Is independently owned and

operated; (2) is not dominant in its field

of operation; and (3) meets any

additional criteria established by the

Small Business Administration (SBA).12

The SBA has defined small business for

Standard Industrial Classification (SIC)

categories 4812 (Radiotelephone

Communications and 4813 (Telephone

Communications, Except

Radiotelephone) to be small entities

when they have fewer than 1,500

employees.13 This IRFA first discusses

generally the total number of small

telephone companies falling within both

of those SIC categories. Then, the IRFA

addresses the number of small

businesses within the two subcategories,

and attempts to refine further those

estimates to correspond with the

categories of telephone companies that

are commonly used under the FCC’s

rules. It must be noted, however, that

only small entities in operation on or
Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules 23237

14United States Department of Commerce,

Bureau of the Census, 1992 Census of

Transportation, Communications, and Utilities:

Establishment and Firm Size, at Firm Size 1–123

(1995) (‘‘1992 Census’’).

15 15 U.S.C. § 632(a)(1).

16Census, supra, at Firm Size 1–123.

17 13 CFR 121.201, Standard Industrial

Classification (SIC) Code 4812.

18Federal Communications Commission, CCB,

Industry Analysis Division. Telecommunications

Industry Revenue: TRS Fund Worksheet Data, Tbl.

21 (Average Total Telecommunications Revenue

Reported by Class of Carrier) (December, 1996)

(‘‘TRS Worksheet’’).

19TRS Worksheet.

20 13 CFR 121.201, SIC 4813.

21United States Department of Commerce,

Bureau of the Census 1992 Census of

Transportation, Communications, and Utilities:

Establishment and Firm Size, at Firm Size 1–123

(1995) (‘‘1992 Census’’).

22 13 CFR 121.201, Standard Industrial

Classification (SIC) Code 4812.

before January 1 1995 are affected by

this proposed rule.

Total Number of Telephone Companies

(SIC 4813) Affected

This proposed rule may have a

significant effect on a substantial

number of the small telephone

companies identified by SBA. The

United States Bureau of the Census

(‘‘the Census Bureau’’) reports that, at

the end of 1992, there were 3,497 firms

engaged in providing telephone

services, as defined therein, for at least

one year.14 This number contains a

variety of different categories of carriers,

including local exchange carriers,

interexchange carriers, competitive

access providers, cellular carriers,

mobile service carriers, operator service

providers, pay telephone operators, PCS

providers, covered SMR providers, and

resellers. It seems certain that some of

those 3,497 telephone service firms may

not qualify as small entities because

they are not ‘‘independently owned and

operated.’’15 For example, a PCS

provider that is affiliated with an

interexchange carrier having more than

1,500 employees would not meet the

definition of a small business. It seems

reasonable to conclude, therefore, that

fewer than 3,497 telephone service firms

are small entity telephone companies

that may be affected by this proposed

rule.

Wireline Carriers and Service Providers

SBA has developed a definition of

small entities for telephone

communications companies other than

radiotelephone (wireless) companies.

The Census bureau reports that there

were 2,321 such telephone companies

in operation for at least one year at the

end of 1992.16 According to SBA’s

definition, a small business telephone

company other than a radiotelephone

company is one employing fewer than

1,500 persons.17 All but 26 of the 2,321

non-radiotelephone companies listed by

the Census Bureau were reported to

have fewer than 1,000 employees. Thus,

even if all 26 of those companies had

more than 1,500 employees, there

would still be 2,295 non-radiotelephone

companies that might qualify as small

entities. Although it seems certain that

some of these carriers are not

independently owned and operated, the

FBI is unable at this time to estimate

with greater precision the number of

wireline carriers and service providers

that would qualify as small business

concerns under SBA’s definition.

Consequently, the FBI estimates that

there are fewer than 2,295 small entity

telephone communications companies

other than radiotelephone companies

that may be affected by this proposed

rule.

Local Exchange Carriers.

Neither the FCC nor SBA has

developed a definition of small

providers of local exchange services

(LECs). The closest applicable definition

under SBA rules is for telephone

communications companies other than

radiotelephone (wireless) companies.

The most reliable source of information

regarding the number of LECs

nationwide of which the FBI is aware

appears to be the data that the FCC

collects annually in connection with the

Telecommunications Relay Service

(TRS). According to the most recent

data, 1,347 companies reported that

they were engaged in the provision of

local exchange services.18 Although it

seems certain that some of these carriers

are not independently owned and

operated, have more than 1,500

employees, or were not in operation

prior to January 1, 1995, the FBI is

unable at this time to estimate with

greater precision the number of LECs

that would qualify as small business

concerns under SBA’s definition.

Consequently, the FBI estimates that

there are fewer than 1,347 small LECs

that may be affected by this proposed

rule.

Interexchange Carrier

Neither the FCC nor SBA has

developed a definition of small entities

specifically applicable to providers of

interexchange services (IXCs). The

closest applicable definition under SBA

rules is for telephone communications

companies other than radiotelephone

(wireless) companies. The most reliable

source of information regarding the

number of IXCs nationwide of which

the FBI is aware appears to be the data

that the FCC collects annually in

connection with TRS. According to the

most recent data, 130 companies

reported that they were engaged in the

provision of interexchange services.19

Although it seems certain that some of

these carriers are not independently

owned and operated, have more than

1,500 employees, or were not in

operation prior to January 1, 1995, the

FBI is unable at this time to estimate,

with greater precision the number of

IXCs that would qualify as small

business concerns under SBA’s

definition. Consequently, the FBI

estimates that there are fewer than 130

small entity IXCs that may be affected

by this proposed rule.

Competitive Access Providers

Neither the FCC nor SBA has

developed a definition of small entities

specifically applicable to providers of

competitive access services (CAPs). The

closest applicable definition under SBA

rules is for telephone communications

companies other than radiotelephone

(wireless) companies. The most reliable

source of information regarding the

number of CAPs nationwide of which

the FBI is aware appears to be the data

that the FCC collects annually in

connection with the TRS. According to

the most recent data, 57 companies

reported that they were engaged in the

provision of competitive access

services.20 Although it seems certain

that some of these carriers are not

independently owned and operated,

have more than 1,500 employees, or

were not in operation prior to January

1, 1995, the FBI is unable at this time

to estimate with greater precision the

number of CAPs that would qualify as

small business concerns under SBA’s

definition. Consequently, the FBI

estimates that there are fewer than 57

small entity CAPs that may be affected

by this proposed rule.

Wireless (Radiotelephone) Carriers

SBA has developed a definition of

small entities for radiotelephone

(wireless) companies. The Census

Bureau reports that there were 1,176

such companies in operation for at least

one year at the end of 1992.21

According to SBA’s definition, a small

business radiotelephone company is one

employing fewer than 1,500 persons.22

The Census Bureau also reported that

1,164 of those radiotelephone

companies had fewer than 1,000

employees. Thus, even if all of the

remaining 12 companies had more than

1,500 employees, there would still be

1,164 radiotelephone companies that
23238 Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules

23TRS Worksheet, at Tbl. 1 (Number of Carriers

Reporting by Type of Carrier and Type of Revenue). 24 Id.

might qualify as small entities if they

are independently owned and operated.

Although it seems certain that some of

these carriers are not independently

owned and operated, the FBI is unable

at this time to estimate with greater

precision the number of radiotelephone

carriers and service providers that

would qualify as small business

concerns under SBA’s definition.

Consequently, the FBI estimates that

there are fewer than 1,164 small entity

radiotelephone companies that may be

affected by this proposed rule.

Cellular and Mobile Service Carriers

In an effort to further refine the FBI’s

calculation of the number of

radiotelephone carriers, Cellular Service

Carriers and Mobile Service Carriers.

Neither the FCC nor the SBA has

developed a definition of small entities

specifically applicable to Cellular

Service Carriers and to Mobile Service

Carriers. The closest applicable

definition under SBA rules for both

services is for telephone companies

other than radiotelephone (wireless)

companies. The most reliable source of

information regarding the number of

Cellular Service Carriers and Mobile

Service Carriers nationwide of which

the FBI is aware appears to be the data

that the FCC collects annually in

connection with the TRS. According to

the most recent data, 792 companies

reported that they are engaged in the

provision of cellular services and 138

companies reported that they are

engaged in the provision of mobile

services.23 Although it seems certain

that some of these carriers are not

independently owned and operated,

have more than 1,500 employees, or

were not in operation prior to January

1, 1995, the FBI is unable at this time

to estimate with greater precision the

number of Cellular Service Carriers and

Mobile Service Carriers that would

qualify as small business concerns

under SBA’s definition. Consequently,

the FBI estimates that there are fewer

than 792 small entity Cellular Service

Carriers and fewer than 138 small entity

Mobile Service Carriers that might be

affected by the actions and rules

adopted in this NPRM.

Resellers

Neither the FCC nor SBA has

developed a definition of small entities

specifically applicable to resellers. The

closest applicable definition under SBA

rules is for all telephone

communications companies. The most

reliable source of information regarding

the number of resellers nationwide of

which the FBI is aware appears to be the

data that the FCC collects annually in

connection with the TRS. According to

the most recent data, 260 companies

reported that they were engaged in the

resale of telephone services.24 Although

it seems certain that some of these

carriers are not independently owned

and operated, have more than 1,500

employees, or were not in operation

prior to January 1, 1995, the FBI is

unable at this time to estimate with

greater precision the number of resellers

that would qualify as small business

concerns under SBA’s definition.

Consequently, the FBI estimates that

there are fewer than 260 small entity

resellers that may be affected by this

proposed rule.

4. Description of Projected Reporting,

Recordkeeping and Other Compliance

Requirements

This proposed rule imposes no

reporting or recordkeeping requirements

on small entities. Additionally, this

proposed rule does not impose any

other direct compliance requirements

on small entities. However, this

proposed rule does, by defining

‘‘significant upgrade or major

modification,’’ clarify the threshold at

which telecommunications equipment,

facilities and services installed or

deployed on or before January 1, 1995

cease to be grandfathered under CALEA

section 109. Should a carrier make a

‘‘significant upgrade or major

modification’’ to such grandfathered

equipment, facility, or service, the

carrier must then bring the equipment,

facility or service in question into

compliance with the assistance

capability requirements of CALEA

section 103 at the carrier’s expense.

5. Significant Alternatives to Proposed

Rules Which Minimize Significant

Economic Impact on Small Entities and

Accomplish Stated Objectives

The development of the proposed

definition of ‘‘significant upgrade or

major modification’’ is discussed at

length in Section C, Definition

Development, of this NPRM, supra. The

FBI considered and rejected as

impractical both technical and

accounting definitions. Having

determined that CALEA’s intent was

best served by a definition focusing on

public safety, the FBI then modified its

definition to incorporate industry’s

suggestions submitted in response to the

ANPRM.

Because this document proposes a

definition which must be as clear and as

finite as possible, the FBI has tentatively

concluded that it is not feasible to make

special accommodations for small

entities in this proceeding. The FBI

arrived at this tentative conclusion

knowing that CALEA itself makes ample

provisions for the protection of small

entities which make ‘‘significant

upgrade[s] or major modification[s]’’ by

allowing these carriers to petition the

FCC for relief under CALEA section

109(b).

The FBI welcomes and encourages

comments from concerned small entities

on this issue.

6. Federal Rules That May Overlap,

Duplicate, or Conflict With the Proposed

Rules

The FBI is not aware of any

overlapping, duplicating, or conflicting

Federal Rules to the Federal Rule

proposed in this document.

G. Electronic Submission of Comments

While printed comments are

welcome, commenters are encouraged to

submit their responses on electronic

media. Electronic documents must be in

WordPerfect 6.1 (or earlier version) or

Microsoft Word 6.0 (or earlier) format.

Comments must be the only file on the

disk. In addition, all electronic

submissions must be accompanied by a

printed sheet listing the name, company

or organization name, address, and

telephone number of an individual who

can replace the disk should it be

damaged in transit. Comments under 10

pages in length can be faxed to the

Telecommunications Contracts and

Audit Unit, Attention: CALEA FR

Representative, fax number (703) 814–

4730.

[47 U.S.C. 1001–1010; 28 CFR 0.85(o)]

List of Subjects in 28 CFR Part 100

Accounting, Law enforcement,

Reporting and recordkeeping

requirements, Telecommunications,

Wiretapping and electronic

surveillance.

For the reasons set out in the

preamble, 28 CFR part 100 is proposed

to be amended as set forth below:

PART 100—COST RECOVERY

REGULATIONS, COMMUNICATIONS

ASSISTANCE FOR LAW

ENFORCEMENT ACT OF 1994

1. The authority citation for 28 CFR

part 100 continues to read as follows:

Authority: 47 U.S.C. 1001–1010; 28 CFR

0.85(o).

2. Section 100.22 is added to read as

follows:
Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Proposed Rules 23239

§ 100.22 Definition of ‘‘significant upgrade

or major modification.’’

(a) For equipment, facilities or

services for which an upgrade or

modification has been completed after

January 1, 1995 and on or before

October 25, 1998, the term ‘‘significant

upgrade or major modification’’ means

any fundamental or substantial change

in the network architecture or any

change that fundamentally alters the

nature or type of the existing

telecommunications equipment, facility

or service, that impedes law

enforcement’s ability to conduct

lawfully authorized electronic

surveillance, unless such change is

mandated by a Federal or State statute;

(b) For equipment, facilities or

services for which an upgrade or

modification is completed after October

25, 1998, the term ‘‘significant upgrade

or major modification’’ means any

change, whether through addition or

other modification, to any equipment,

facility or service that impedes law

enforcement’s ability to conduct

lawfully authorized electronic

surveillance, unless such change is

mandated by a Federal statute.

Dated: April 13, 1998.

Louis Freeh,

Director, Federal Bureau of Investigation,

Department of Justice.

[FR Doc. 98–10928 Filed 4–27–98; 8:45 am]

BILLING CODE 4410–02–M

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[WI76–01–7305; FRL–6004–7]

Approval and Promulgation of State

Implementation Plans; Wisconsin

AGENCY: Environmental Protection

Agency.

ACTION: Proposed rule.

SUMMARY: The United States

Environmental Protection Agency

(USEPA) is proposing to disapprove a

site-specific volatile organic compound

(VOC) reasonably available control

technology (RACT) State

Implementation Plan (SIP) revision for

the Amron Corporation facility located

at 525 Progress Avenue in Waukesha.

The SIP revision was submitted by the

Wisconsin Department of Natural

Resources (WDNR) on February 21,

1997, and would exempt the facility

from the emission limits applicable to

miscellaneous metal coating operations.

DATES: Comments on this proposed rule

must be received before May 28, 1998.

ADDRESSES: Written comments should

be sent to: Carlton T. Nash, Chief,

Regulation Development Section, Air

Programs Branch (AR–18J), U.S.

Environmental Protection Agency, 77

West Jackson Boulevard, Chicago,

Illinois 60604.

Copies of the proposed SIP revision

and EPA’s analysis are available for

inspection at the U.S. Environmental

Protection Agency, Region 5, Air and

Radiation Division, 77 West Jackson

Boulevard, Chicago, Illinois 60604.

(Please telephone Kathleen D’Agostino

at (312) 886–1767 before visiting the

Region 5 Office.)

FOR FURTHER INFORMATION CONTACT:

Kathleen D’Agostino, Environmental

Engineer, Regulation Development

Section, Air Programs Branch (AR–18J),

U.S. Environmental Protection Agency,

Region 5, Chicago, Illinois 60604, (312)

886–1767.

SUPPLEMENTARY INFORMATION:

I. Background

On February 21, 1997, WDNR

submitted a site-specific VOC RACT SIP

revision for the Amron Corporation

facility located at 525 Progress Avenue

in Waukesha. Amron manufactures

several different kinds of projectiles for

a United States Department of Defense

(DOD) contractor. Amron’s work is

exclusively DOD contracts.

The Amron facility is located in the

Milwaukee severe nonattainment area

and is subject to rule NR 422.15 of the

Wisconsin Administrative code, which

regulates miscellaneous metal coating

operations. NR 422.15 has been

approved by the United States

Environmental Protection Agency

(USEPA) as meeting the RACT

requirements of the Clean Air Act (Act).

Specifically, under NR 422.15(2)(a)

and (b), when coating miscellaneous

metal parts or products using a baked or

specially cured coating technology,

Amron may not exceed 4.3 pounds of

VOC per gallon of coating as applied for

clear coats and 3.5 pounds of VOC per

gallon of coating as applied for extreme

performance coatings. Under NR

422.15(3)(c), when coating

miscellaneous metal parts or products

using an air dried coating technology,

Amron may not exceed 3.5 pounds of

VOC per gallon for clear coatings.

II. Facility and Process Description

As noted above, Amron manufactures

several different kinds of projectiles for

the DOD. Process P01 at Amron is the

paint operation which encompasses five

different lines for coating numerous

types and shapes of military items,

including the 25mm cartridge case, the

M430/M918TP, the M67/M69, the

M56A4, and the M75 and M73 rockets.

As a contractor to the DOD, Amron is

required to use certain paints which are

specified by the military. Each coating

was specified by DOD for its unique

characteristics.

Exterior projectile coatings must

protect against corrosion, provide color

identification and not chip, flake or rub

off. Exterior cartridge case coatings must

protect against corrosion, provide a low

co-efficient of friction surface for

feeding and extraction, as well as not

chip or rub off. Interior and exterior

cartridge or projectile coatings must

protect against corrosion, provide a

friction-free surface between the steel

body and high explosives during

loading, and be chemically compatible

with the high explosives.

Below is a table listing the coatings

used by Amron for the various

projectiles.

Product Description Type Military specification VOC lb/gal

25MM ......................... Olive Drab ............................................ Polyamide-Amide Teflon ..................... 12013517 6.4

M430/M918 ................ Red Oxide Primer ................................ Alkyd .................................................... MIL–P–22332 4.52

Olive Drab Lacquer ............................. Cellulose Nitrate .................................. MIL–L–11195 4.94

Blue Lacquer ....................................... Cellulose Nitrate .................................. MIL–L–11195 4.94

M67 ............................ Red Oxide Primer ................................ Alkyd .................................................... MIL–P–22332 4.52

Off-White Primer .................................. Epoxy ................................................... MIL–P–53022 4.229

Green Zenthane .................................. Polyurethane ........................................ MIL–C–53039 3.491

M69 ............................ Blue Lacquer ....................................... Cellulose Nitrate .................................. MIL–L–11195 (1)

M56A4 ....................... Asphalt Type I ..................................... Asphalt ................................................. MIL–C–450C 3.744

Yellow Lacquer .................................... Cellulose Nitrate .................................. MIL–L–11195 4.89

Red Lacquer ........................................ Cellulose Nitrate .................................. MIL–L–11195 5.0

M73 ............................ Olive Drab Lacquer ............................. Cellulose Nitrate .................................. MIL–L–11195 4.94

Yellow Lacquer .................................... Cellulose Nitrate .................................. MIL–L–11195 4.89