Electronic Surveillance

Requirements Loom for VoIP Providers

Although the FCC has yet to define VoIP service providers as regulated common carriers, with each passing month the regulatory distinctions between VoIP and telecom common carriers are harder to discern.

This past summer, the FCC imposed a series of Universal Service filing and payment obligations on certain VoIP service providers. Now, the FCC has announced deadlines for interconnected VoIP providers to submit filings concerning compliance with the Communications Assistance for Law Enforcement Act (CALEA) rules.

The FCC’s CALEA rules require communications carriers, now including interconnected VoIP providers, to assist law enforcement entities by, among other things, implementing the following capabilities in their networks: call intercept, access to call identifying information (CII), and the ability to deliver “reasonably available” CII and other information to law enforcement agencies pursuant to a court order or other authorization. In order to comply with CALEA, many VoIP providers will have to make certain changes to their networks, including perhaps softswitch replacement. The current deadline for VoIP providers to comply with these CALEA regulations is May 14.

As part of its effort to ensure universal compliance with the May deadline, the FCC has ordered interconnected VoIP providers to file a “monitoring report” to illustrate their progress in meeting their CALEA requirements. The deadline for filing the monitoring report was Feb. 12.

The monitoring report consists of an FCC Form 445, which contains a series of short questions concerning the status of a VoIP service providers’ CALEA compliance, and whether the carrier expects to meet the May 14 compliance deadline. The FCC also requires interconnected VoIP providers to comply with its “system security rules” and to file with that agency the policies and procedures they use to comply with those rules. These rules provide guidance to carriers on policies and procedures for employee supervision as well as control and maintaining secure and accurate records when responding to an appropriate legal authorization for electronic surveillance. The deadline for interconnected VoIP providers to file their System Security and Integrity policies and procedures is March 12.

The FCC permits the filing of petitions for extension of the CALEA compliance deadline, but only for equipment, facilities, or services installed or deployed prior to Oct. 25, 1998. Any interconnected VoIP provider that has a pending petition for extension of the compliance deadline also must file a letter with the FCC attesting that its petition concerns only pre-Oct. 25, 1998, equipment, facilities and services. The deadline for filing these “attestation letters” was Feb. 12. VoIP service providers were allowed to file a new petition for extension of the deadline, but, extension requests required a similar attestation.

Regarding cost recovery for CALEA compliance, the FCC has concluded carriers must bear responsibility for CALEA development and implementation costs. There is an exception that permits cost recovery from the U.S. government for situations where CALEA compliance is not “reasonably achievable,” but meeting that exception requires a very high burden of proof. The FCC has announced specific requirements and procedures concerning petitions for recovery of CALEA compliance costs from the federal government. These requirements and procedures are extremely complex, and the FCC candidly has stated it expects few, if any, service providers to meet the requirements necessary to shift the CALEA cost burdens to the federal government. The specific requirements, which include a long list of due diligence requirements and cost studies, are spelled out in the FCC’s CALEA Report and Order that was released in May of 2006. The deadline for submitting a CALEA cost recovery petition is May 14, 2007.

The FCC permits VoIP providers to recover their CALEA-related costs from their subscribers. Carriers may insert such charges as line items on their customers’ bills, as telecommunications carriers typically do when recovering Universal Service contributions and local number portability fees.

The FCC previously anticipated all of these notices concerning CALEA filing requirements would be released in the summer or early fall of 2006. Due to its apparent delay, the FCC released these filing requirements and regulations with much shorter than anticipated deadlines. Fresh on the heels of Universal Service reporting and payment obligations, interconnected VoIP service providers are starting the new year with a host of CALEA reporting and compliance obligations. Like it or not, becoming CALEA-compliant will have to be on every VoIP service provider’s to-do list this year.

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