WIRETAP LAW TO APPLY TO NET CALLS

Federal regulators moved yesterday to prevent Internet phonesystems now largely unregulated from becoming the preferred way forcriminals and terrorists to communicate, voting to impose rules toensure that intelligence and police agencies will be able to tap intoNet calls.

By a 5-0 vote, the Federal Communications Commission approvedplans to draft rules to subject "voice over Internet protocol"services to a 1994 law that requires new telecom technologies toremain open for authorized eavesdropping. The FCC will requirewireless "push-to-talk" walkie-talkie services to meet the same law,the Communications Assistance for Law Enforcement Act.

Technological innovations that make VOIP a much cheaperalternative to conventional phone service can also make it harder tomonitor. While standard service creates two dedicated circuits for aphone call, VOIP services convert speech into data packets just likee-mail and shoot them over multiple Internet pathways, reassemblingthem at the other end.

"This is a real issue. This is not theoretical," said KurtSchwartz, head of Massachusetts Attorney General Thomas F. Reilly'scriminal bureau. He said Reilly's office has had several cases inwhich criminals used VOIP and push-to-talk services, including aninternational drug-smuggling ring that used Nextel DirectConnectbecause they believed wrongly that it couldn't be wiretapped.

The FCC action would affect services such as AT&T Corp.'sCallVantage, Verizon Communications Inc.'s VoiceWing, and a host ofother services that let people plug phones into broadband Internetconnections and make unlimited calls for $20 to $30 a month. Theseservices have attracted little more than 250,000 subscribers, butanalysts such as Gartner Inc. predict that by 2008 VOIP lines mayreplace one-sixth of all US phone lines. The FCC move would notaffect free computer-to-computer voice services, such as Skype andPulver.com's Free World Dial up, because they are "nonmanaged" peer-to-peer services.

That decision reflected in part the FCC's delicate policy dance oftrying to avoid as much as possible subjecting fast-growing VOIPservices to the same tangle of rules as traditional phone service, soas not to thwart innovation.

Pulver.com founder Jeff Pulver said he is confident the FCC move"should not take us down a slippery slope in which VOIP would becategorized as a telecom service and subject to the host of telecomregulations."

In March, Attorney General John D. Ashcroft asked the FCC tosubject broadband Internet voice services to the 1994 wiretappinglaw. BellSouth Corp., MCI Inc., Microsoft Corp., Time Warner Inc.'sAmerica Online, and Yahoo Inc. urged the FCC to reject the request.They said they already cooperate with tens of thousands lawenforcement requests each year for access to e-mail and other Nettraffic records, but get virtually none for monitoring VOIP traffic.Giving security officials access to Internet voice calls would beextraordinarily expensive and go beyond the 1994 law, they said.

But AT&T, Verizon, and Vonage Holdings Corp. said they support thenew FCC policy, as do push-to-talk wireless services.

Nextel Communications Inc., whose "DirectConnect" walkie-talkieservice has more than 10 million users, has made that servicecompliant with federal eavesdropping laws, a spokesman said.

Peter J. Howe can be reached at howe@globe.com.