Telcos still concerned about unknown costs of lawful access bill

Telecom and technology industry groups say they continue to have significant concerns about the cost of implementing the Conservative government's lawful access legislation, Bill C-30. The government introduced Bill C-30 in the House of Commons last week, which would require Internet and mobile providers to have intercept capabilities and disclose customer information to law enforcement authorities without court-ordered warrants. The legislative initiative is not new. The government tabled lawful access legislation in the last Parliament in the form of bills C-50, C-51 and C-52, which died on the order paper due to an election. In 2007, Industry Canada held a consultation to consider approaches to new lawful access legislation, in which the Information Technology Association of Canada (ITAC) and the Canadian Wireless Telecommunications Association (CWTA) participated. Public Safety Canada, along with Industry Canada, sought to address the challenges faced by police, the Canadian Security Intelligence Service (CSIS) and the Competition Bureau when those agencies seek online subscriber information. The CWTA and ITAC told The Wire Report in interviews after the release of Bill C-30 that their concerns about the cost of implementing the legislation haven't changed since the 2007 consultation. ITAC wrote in its submission in 2007 that telecommunication service providers would incur “significant costs” as a result of lawful access legislation and that providers should be compensated. “The volume of requests for customer name and address (CNA) information can be expected to increase substantially absent judicial oversight, with a corresponding substantial increase in costs to telecommunication service providers,” ITAC wrote in 2007. Bill Munson, a vice-president at ITAC, told The Wire Report in an interview that the new Bill C-30 still has an “expectation that they will have to comply, and that’s expensive for them.” He said compliance with the new bill will be expensive for larger providers because they “are not in a monopolistic situation anymore.” Bill Sandiford, a spokesman for the Canadian Network Operators Consortium (CNOC), a coalition of small ISPs, said to the Huffington Post last November that the costs associated with the government’s lawful access initiative could force small, independent Internet providers to shut down. Sandiford could not be reached for an interview last week, but he said in November that the cost of lawful access to providers was “alarming” and that if some “small ISPs need to spend $1 million to be compliant … that could mean the end of them.” Marc Choma, a spokesman for the CWTA, said in an interview that the association's main concern about the bill are the costs. He said it is “virtually impossible” to estimate how much service providers' will spend under Bill C-30. Right now, he said, wireless carriers are paying millions of dollars per year to meet law enforcement requests. That is under a voluntary system in which costs are shared by carriers and law enforcement authorities, he said. “We’ll have to wait to see the regulations that follow this bill to see how those costs are going to be dealt with, because they will be significant,” he said. Choma said costs will be higher if providers have to look at technology enhancements to meet the requirements of the legislation. Compliance for providers, he said, will not be achieved through a one-time rollout of technology. He estimated “hundreds of people,” for all service providers, will have to be on standby to comply with requests from law enforcement. In its 2007 consultation submission, the CWTA wrote that it is “imperative that law-enforcement authorities compensate telecommunication service providers for law enforcement services.” Michael Geist, a critic of the bill and the Canada research chair of Internet and e-commerce law at the University of Ottawa, wrote on his blog Tuesday that the cost of new “surveillance equipment could run into the tens of millions of dollars, yet the government has not said who will pay for it.” In 1995, Geist wrote, the U.S. passed a wiretapping law called the Communications Assistance for Law Enforcement Act (CALEA), in which Congress authorized the appropriation of $500 million US to reimburse carriers for the cost of modifying their systems and making them compliant with the requirements of the law. “Bill C-30 leaves these issues for another day by opening the door to fees but leaving specifics to future, unspecified regulations that can be passed by the Governor-in-Council without gaining Parliamentary approval,” Geist wrote. Bill C-30 says that “a telecommunications service provider that provides information to a person under ... is entitled to be paid the prescribed fee for providing the information.” For requests for information from CSIS, the police, or the Competition Bureau, “the fee is to be paid by the designating authority” in the government, the bill says. If the information is requested by a police officer, “the fee is to be paid by the chief or head of the police service that employs the police officer,” it says. In a backgrounder released Tuesday, the Canadian Association of Chiefs of Police, which supports the bill, said: “Within this legislation the government recognizes the cost of development for the providers and is prepared to assist in specific circumstances. There is wording that speaks to grandfathering existing providers and the permission of a catch-up period with the possibility of government financial assistance.” Last week, Government House Leader Peter Van Loan said the bill would be sent to committee before second reading, allowing for significant amendments. Section 39 of the bill also sets out extra-judicial provisions for ISPs' non-compliance with the proposed law. The bill says that every person who “commits a violation and is liable to an administrative monetary penalty not exceeding the prescribed maximum or, if no maximum has been prescribed, to a penalty not exceeding $50,000, in the case of an individual, and $250,000, in any other case.” Independent technology analyst Carmi Levy said in an interview Friday that Bill C-30's cost impact could be larger for smaller ISPs “because they just don’t have the resources to invest in anything like this to begin with.” “It’s going to cost everyone, small and larger ISPs, a similar amount just to get started,” he said. “But if you’re a Rogers or a Bell , it’s relatively easier to swallow than if you’re a smaller company looking at a massive build that represents a large chunk of your annual revenue.” Bill C-30 states that ISPs must have the necessary software and hardware to meet the operational requirements of the act, “even if the form of software in question would require the telecommunications service provider to acquire additional software licences or telecommunications facilities to achieve that increased ability.” Munson said compensation fees under the bill should cover companies’ cost of compliance, and that the fees may also serve as a type of disciplinary mechanism for government agencies. “But it also acts as a bit of a discipline for requests,” he said. “The police would probably ask less if they had to pay for it.” Levy agreed, saying that it depends on how much ISPs will charge to respond to information requests. “Obviously, if there’s a cost associated with its use, law enforcement would have to think long and hard before going on fishing expeditions for data,” he said. “Certainly, it does open the door to this being a mitigating factor, which does limit the scope for any potential abuse.” Tom Copeland, chair of the Canadian Association of Internet Providers (CAIP), told The Wire Report in 2010 that the cost of lawful access initiatives to providers will include initial capital expenditure costs, system maintenance, labour costs involved in capturing requested information, as well as storing it and making it available. He said the costs to ISPs will depend on the size of the provider and what equipment the companies have in place. dgrenier@thewirereport.ca

Telcos still concerned about unknown costs of lawful access bill

News | February 21, 2012

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