VOIP industry sources say there's a very real possibility that the Department of Justice will convince the Federal Communications Commission (FCC) to extend wiretapping rules to all VOIP services, including peer-to-peer communications.

If you're Niklas Zennstrom, founder of Skype Technologies SA, such news might put you off your danish and cappuccino.

The FCC specified in an August 5 release that VOIP providers that interconnect with the PSTN must facilitate wire taps within 18 months of the release of the order (see FCC Requires VOIP E911). So at least the PSTN-connected “SkypeOut” portion of Skype’s business appears to be on the hook for compliance under the CALEA laws.

But the DOJ wants more. The Department of Justice's response to the FCC's August 5 announcement, it cheered the commission for progress made, but said, in effect, the work is not yet done (see The FCC Plays Musical Chairs).

The FCC's official order will arrive this month, sources say, and it will likely put more color around the new CALEA rules. But the Commission too seems to acknowledge that the issue is not yet settled. On the same day the new order was announced, it issued another notice of proposed rulemaking (NPRM) asking for a new round of comments on CALEA.

Meanwhile, law enforcement remains in “almost daily” conversation with the commission, according to FCC media relations director David Fiske.

The DOJ’s point person for CALEA, Laura Parsky, has implied that wire-tapping VOIP is crucial to national security. Parsky said as much in a Congressional hearing that explored the idea that VOIP providers must be connected to the PSTN in order to be subject to CALEA:

Parsky declined comment on this story, but spokesman Bryan Sierra says the DOJ has “unfinished business” with the FCC on CALEA (see VOIP Fans Raise Regulatory Issues).

“I believe that the FBI and DOJ want to extend CALEA as far as possible,” says Kurt Opsahl of the Electronic Frontier Foundation.

The DOJ's intentions are ambitious, but not surprising. By making "interconnection with the PSTN" the qualifier for being subject to wiretapping rules, the Commission seems to have drawn a somewhat arbitrary line in the sand. If anything, tech-savvy bad guys would probably avoid such public modes of communication.

Skype argues to the FCC that it facilitates peer-to-peer communications, but does not employ switches and other network equipment to actually transport call traffic. Skype says it merely facilitates VOIP calls, but does not have access to them.

The company also says it would have to re-architect its entire model in order to comply with CALEA, but declined comment on the costs of such an undertaking (see Nuvio Appeals FCC Order).

Complete CALEA compliance might do to Skype what viruses and copyright lawsuits did to KaZaa. If Skype refuses to bring its systems into compliance, calls to or from the US -- and the revenues they bring to Skype -- could cease (see Acme Packet Supports CALEA).

The Electronic Frontier Foundation, together with the Center for Democracy and Technology (CDT) and others are preparing for a possible legal challenge to the new CALEA rules after the order comes out (see Citron: Some Bills Are 'Weirdly Weird' ).

The whole process of updating CALEA rules started in 2004 with a joint petition from the DOJ, FBI, and DEA. Collectively, law enforcement feared that its monitoring capabilities were being outpaced by new technologies like VOIP.

Congress originally enacted CALEA, or the "Communications Assistance for Law Enforcement Act," in October 1994. The law defines the obligations of telecommunications carriers to assist law enforcement in executing electronic surveillance "pursuant to court order or other lawful authorization."

— Mark Sullivan, Reporter, Light Reading