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FBI warns Congress: foreign telecomms may inhibit wiretaps

"Legal wiretaps," that is

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The great twins of American obsessiveness, Power and Wealth, stood in direct conflict on Capitol Hill Thursday as the House Commerce Subcommittee considered numerous implications of Deutsche Telekom's $46 billion takeover bid for US mobile phone operator VoiceStream Wireless.

At issue was concern that the German government owns fifty-eight per cent of Deutsche, meaning that if the deal were approved, an American telecomms company would fall under the influence of a foreign state.

An exquisitely painful choice for any US politician: the $46 billion of German capital is immensely tempting, but the loss of control is equally terrifying.

Power

The FBI, which, under the indulgent nurturing of the Clinton Administration, has developed into one of the world's premier control freaks, fretted openly that its ability to snoop on the populace could be hampered by the foreign owners of American communications networks.

"There may be no practical way to conduct lawful surveillance effectively and securely if the facilities that process US communications are located outside the United States," FBI General Counsel Larry Parkinson lamented. FBI wiretaps have skyrocketed under Clinton's tenure, and the Bureau, clearly, has grown very much used to the power.

Ultimately, Parkinson said, it is "the safety of the American public that suffers the consequences of an inability to conduct national security investigations and detect criminal activity through effective investigative tools such as court authorized electronic surveillance."

Yet we remain hard-pressed to produce a significant body of Americans who feel safer knowing that the Feds are reading their e-mail and tapping their phones with impunity.

But Power persisted in fretting. Whole investigations may be blown, Parkinson declared, because federal agencies are understandably reluctant to reveal the capabilities, and the limitations, of their surveillance tricks to outsiders.

"Data acquisition increasingly requires the cooperation of the communications service provider. In these cases, the US Government is required to disclose sensitive target information and investigative techniques to the service provider in order for it to provide the assistance required under the order," he whinged.

"The FBI is pushing the envelope," US Senator Patrick Leahy (Democrat, Vermont) observed dryly during Senate Judiciary Committee hearings Wednesday, where the FBI's controversial e-mail sniffer Carnivore was discussed in the context of America's rapid privacy erosion. The comment is all the more credible coming from a Democrat, especially one of Leahy's considerable stature.

Wealth

The Deutsche Telekom acquisition served chiefly as a foil to the Committee. No one seriously doubts that the German government would cooperate with US law enforcement if asked. The Committee met to consider the broad issues articulated in legislation proposed by US Senator Ernest Hollings (Democrat, South Carolina), who appeared as a witness before the House Committee, and who would make it impossible for a company to buy a US telecomms outfit if a foreign government owns more than twenty-five per cent of its stock.

The long-term financial disadvantages of doing business with a government-owned company, Hollings argued persuasively, outweigh the short-term gains. Fair competition is poorly served when the owner of a company is in a position to influence the regulatory environment in which it operates.

US Representative Edward Markey (Democrat, Massachusetts) noted that a third of Deutsche employees are civil servants whose salaries are determined by government regulation rather than personal merit, and who can't be sacked easily if they prove to be inadequate. Not exactly a model of lean, competitive fighting form, we must allow.

As a majority shareholder, the German government has considerable influence over Deutsche's corporate decisions, Markey said, and would be naturally inclined to consider the preferences of a large body of selfish, lazy, inept civil servants even if they conflict with common business sense.

And this from a well-mannered tribe eager, since the Second World War, for re-entry into the human race. One shudders to think of the problems associated with government-owned companies from monied states like China, Japan, South Korea and Taiwan, where Europe's and North America's celebrated Bourgeois, Protestant values are openly ridiculed as some bizarre affliction. (Hmmm...they may be onto something there.)

So if Power pushed the envelope and risked drawing suspicions of gross self-interest to itself, Wealth may have won the day with a cautionary tale of future riches sacrificed to immediate greed. And there is damn little that grabs the attention of a politician during an election season as firmly as the health of the economy.

And furthermore, if the American government can be prevented through legislation from owning a controlling stake in US telecomms, why not foreign ones? The Register's money, and wisely we think, is on the Hollings bill. ®

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