Copyright 2004 Globe Newspaper Company

The Boston Globe

August 5, 2004, Thursday THIRD EDITION

Federal regulators moved yesterday to prevent Internet phone systems now largely unregulated from becoming the preferred way for criminals and terrorists to communicate, voting to impose rules to ensure that intelligence and police agencies will be able to tap into Net calls.

By a 5-0 vote, the Federal Communications Commission approved plans to draft rules to subject "voice over Internet protocol" services to a 1994 law that requires new telecom technologies to remain open for authorized eavesdropping. The FCC will require wireless "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 cheaper alternative to conventional phone service can also make it harder to monitor. While standard service creates two dedicated circuits for a phone call, VoIP services convert speech into data packets just like e-mail and shoot them over multiple Internet pathways, reassembling them at the other end.

"This is a real issue. This is not theoretical," said Kurt Schwartz, head of Massachusetts Attorney General Thomas F. Reilly's criminal bureau. He said Reilly's office has had several cases in which criminals used VoIP and push-to-talk services, including an international drug-smuggling ring that used Nextel DirectConnect because they believed wrongly that it couldn't be wiretapped.

The FCC action would affect services such as AT&T Corp.'s CallVantage, Verizon Communications Inc.'s VoiceWing, and a host of other services that let people plug phones into broadband Internet connections and make unlimited calls for $20 to $30 a month.

These services have attracted little more than 250,000 subscribers, but analysts such as Gartner Inc. predict that by 2008 VoIP lines may replace one-sixth of all U.S. phone lines. The FCC move would not affect free computer-to-computer voice services, such as Skype and's Free World Dial up, because they are "non-managed" peer-to-peer services.

That decision reflected in part the FCC's delicate policy dance of trying to avoid as much as possible subjecting fast-growing VoIP services to the same tangle of rules as traditional phone service, so as not to thwart innovation. founder Jeff Pulver said he is confident the FCC move "should not take us down a slippery slope in which VoIP would be categorized as a telecom service and subject to the host of telecom regulations."

In March, Attorney General John D. Ashcroft asked the FCC to subject broadband Internet voice services to the 1994 wiretapping law. BellSouth Corp., MCI Inc., Microsoft Corp., Time Warner Inc.'s America Online, and Yahoo Inc. urged the FCC to reject the request.

They said they already cooperate with tens of thousands of law enforcement requests each year for access to e-mail and other Net traffic records, but get virtually none for monitoring VoIP traffic. Giving security officials access to Internet voice calls would be extraordinarily expensive and go beyond the 1994 law, they said.

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

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

Peter J. Howe can be reached at