ELECTRONICALLY FILED ON JUNE 12, 2006 STATE OF MAINE PUBLIC UTILITIES COMMISSION __________________________________________ JAMES D COWIE, ET AL.

) ) PUBLIC ADVOCATE’S COMMENTS RE: Request for Commission Investigation ) ON VERIZON’S RESPONSE TO Into Whether Verizon is Cooperating in Maine ) PETITION BY JAMES D. COWIE, ET AL. With the National Security Agency’s ) Warrantless Domestic Wiretapping Program ) ) June 12, 2006 Docket No. 2006-274 ) THIS IS A VIRTUAL DUPLICATE OF THE ORIGINAL HARDCOPY SUBMITTED TO THE COMMISSION IN ACCORDANCE WITH ITS ELECTRONIC FILING INSTRUCTIONS “Under Federal Law, … we have the duty to protect the confidentiality of your telecommunications service information. This information includes the services and products you purchase, account activity (for example, the telephone numbers you dial), and charges incurred.” Verizon Extra (bill-stuffer sent to each Maine residential customer) May, 2006, page 3 A. INTRODUCTION. On May 8, 2006, James D. Cowie and 21 other Verizon customers filed a Complaint at the Public Utilities Commission asking the Commission to investigate whether Verizon is cooperating with the National Security Agency’s (NSA) warrantless wiretapping program.1 Verizon has filed a response2 to that Complaint, requesting that the Commission dismiss the Complaint summarily.

1

In their Complaint, the Cowie Complainants are asking the Commission (a) (b) (c) to determine whether Verizon has provided the NSA unwarranted access to any Verizon (or MCI) facilities in Maine, and if Verizon has done so, to determine whether Verizon has violated any Maine or federal statutes; and if it has, to order Verizon to stop providing unwarranted access to its Maine facilities and to its customer records and e-mail records.

2

“Response of Verizon Maine to Ten-Person Complaint,” filed May 19, 2006 (hereinafter, “Verizon Response”).

In these comments, the Public Advocate addresses the arguments made by Verizon in its Response, and we ask the Commission to open an investigation of Verizon’s actions in cooperating with what appears to be a warrantless violation of the privacy rights of Verizon’s Maine customers.

B. VERIZON’S RESPONSE. In its Response, Verizon suggests that the complaint should be dismissed because the Maine Commission “will be unable to adduce any facts” relating to the allegations of the Complaint, and hence “will be unable to resolve the issues raised in the Complaint.” Verizon also claims that the relief requested3 in the Complaint “implicates issues of national security and is beyond the Commission’s power to grant.”

Verizon’s principle argument is that the Commission should not open an investigation as to whether Verizon has violated the privacy interests of its Maine customers because “Verizon is prohibited from providing any information concerning its alleged cooperation with the NSA program.”4 To support that argument, Verizon relies on several federal statues and also asserts the “state secrets” privilege. Verizon also argues that the Complaint should be dismissed because it is “without merit” because there is no statutory basis for the complaint.5

3

The Complaint asks that the Maine Commission order Verizon to stop providing unwarranted access to its Maine facilities and to its Maine customers’ call records and e-mail records.
4

Verizon Response, p.3. Id, p.6

5

2

We encourage the Commission to reject those arguments and to recognize that the privacy interests at issue are protected here by Maine statutes, the Maine constitution, federal statutes and the U.S. Constitution, and therefore to open an investigation of the allegations in the Complaint.

C.

PRIVACY INTERESTS AND PRIVACY PROTECTIONS. Citing the Agro v. MPUC case6, Verizon argues that dismissal of the Complaint is appropriate

where “there is no statutory basis for the complaint.” In doing so, Verizon overlooks the privacy interests that are protected by Maine statute, the Maine constitution, federal law, and the U.S. Constitution.

1.

Maine Statutes.

In Maine, the Legislature has declared that Maine telephone subscribers have privacy rights: “Telephone subscribers have a right to privacy and the protection of this right to privacy is of paramount concern to the State.” 35-A M.R.S.A. § 7101-A (1). Moreover, Maine law provides further that: “To exercise their right to privacy, telephone subscribers must be able to limit the dissemination of their telephone numbers to persons of their choosing.” 35-A M.R.S.A. § 7101-A(2).

Title 15 M.R.S.A. §§ 709-712 also address interception of wire and oral communications.

2.

Maine Constitution.

Beyond that, the Maine Constitution also protects telephone customers because it prohibits Maine citizens from seizures and searches without a warrant. Section 5 of the Declaration of Rights reads as follows:

6

611 A.2d 566 (ME. 1992).

3

Unreasonable searches prohibited. The people shall be secure in their persons, houses, papers and possessions from all unreasonable searches and seizures; and no warrant to search any place, or seize any person or thing, shall issue without a special designation of the place to be searched, and the person or thing to be seized, nor without probable cause -- supported by oath or affirmation 3. Federal Statutes. a. The Telecommunications Act.

In federal law, the Telecommunications Act protects against disclosure and dissemination of customer proprietary network information (CPNI).7 CPNI includes the information that Verizon and other telephone carriers obtain by virtue of providing telecommunications service to customers, “such as the phone numbers called by consumers, the frequency, duration, and timing of such calls and information about the types of services purchased by the customer, i.e. call-waiting” and “therefore includes highly sensitive personal information.”8 The unauthorized disclosure of CPNI poses significant privacy and security risks for consumers.

Pursuant to 47 U.S.C. § 222(c)(1), a telecommunications carrier -- such as Verizon – cannot disclose or permit other entities access to CPNI “[e]xcept as required by law or with the approval of the customer” or as part of its providing telephone service.”9 Under the Federal Communications
7

“Customer proprietary network information” or CPNI, is defined as: (A) information that relates to the quantity, technical configuration, type, destination, location, and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier, and that is made available to the carrier by the customer solely by virtue of the carrier-customer relationship; and (B) information contained in the bills pertaining to telephone exchange service or telephone toll service received by a customer of a carrier; except that such term does not include subscriber list information.

47 USC 222(h)(1).
8

See In the Matter of Implementation of the Telecommunications Act of 1996: Telecommunications Carriers’ Use of Consumer Proprietary Information and other Customer Information; Petition for Rulemaking to Enhance Security and Petition for Rulemaking to Enhance Security and Authentication Standards for Access to Customer Proprietary Information, CC Docket No. 96-115, Notice of Proposed Rulemaking (rel. Feb. 14, 2006) [71 Fed. Reg. 13317 (Mar. 15, 2006].
9

47 U.S.C. § 222(c)(1).

4

Commission (FCC)’s current CPNI rules, carriers must receive “opt-in” (i.e. affirmative) consent from

customers before disclosing CPNI to third parties or their own affiliates that do not provide communications-related services.10 Opt-in consent is express written, oral or electronic consent.11

Furthermore, the Maine Commission’s rules provide that telephone carriers operating in Maine “shall comply with the FCC’s CPNI Rules, 47 CFR §§ 64.2001-2009.”12 b. The Wiretap Act -- Title III.

In 1967, the Supreme Court first held that electronic eavesdropping on private communications by the government was a search and seizure subject to the Fourth Amendment. Berger, 388 U.S. 41, 51-60 (1967); Katz v. United States, 389 U.S. 347, 352-353 (1967).

In response to Berger and Katz, Congress enacted Title III, Pub. L. No. 90-351, Tit. III, §§ 801-04, 82 Stat. 211 (codified as amended at 18 U.S.C. § 2510 et seq.) Bartnicki v. Vopper, 532 U.S. 514, 523 (2001). Consistent with those decisions, Title III requires law enforcement officers to obtain a search warrant based on probable cause before intercepting wire, oral, or electronic13 communications in all but emergency situations.

10

See 47 C.F.R. § 64.2007(b)(3). 47 C.F.R. § 64.2003(h).

11

12

See PUC Rules, Chapters 290, 291 and 292, Standards For Billing, Credit and Collection and Customer Information For Eligible Telecommunications Carriers, Non Eligible Telecommunications Carriers, and Interexchange Carriers, Section 7 (Customer Privacy).
13

Title III was amended to protect electronic communications as well as phone conversations by the Electronic Communications Privacy Act of 1986 (“ECPA”), Pub. L. No. 99-508, 100 Stat. 1848, codified in pertinent part at 18 U.S.C. §§ 2510(a), 2510(4); see Bartnicki, 532 U.S. at 524 (through ECPA, Congress “enlarged the coverage of Title III to prohibit the interception of ‘electronic’ as well as oral and wire communications”).

5

However, as Congress’ broad intent was to “effectively protect the privacy of . . . communications,” Title III is not limited to regulating government surveillance. Bartnicki, 532 U.S. at 523-24 (citation and quotation omitted). It also generally prohibits any person from intercepting private communications, or using or disclosing intercepted communications. Id.; 18 U.S.C. § 2511. Communications providers themselves are subject to this prohibition, except to the extent their conduct is reasonably necessary to providing their service or protecting their rights and property. 18 U.S.C. § 2511(2)(a)(i).

c.

The Electronic Communications Privacy Act.

The Electronic Communications Privacy Act, 18 USC § 2701 et seq., also generally prohibits governmental access to telephone records without a court order. “A provider … shall not knowingly divulge a record or other information pertaining to a subscriber to or customer of such service … to any governmental entity.” 18 USC § 2702(a)(3).

Section 2702(a)(1) prohibits a provider from “knowingly divulge[ing] to any person or entity the contents of a communication while in electronic storage by that service.” Id. § 2702(a)(1). Section 2702(a)(2) prohibits a provider from “knowingly divulge[ing] to any person or entity the contents of any communication which is carried or maintained on that service…” Id. § 2702(a)(2).

In its Response, Verizon points to the statutory exceptions found in sections 2702(b) and(c) and 2703(c). For example, disclosure is allowed pursuant to warrants, court orders and administrative subpoenas, 18 USC § 2703(c); with customer consent, 18 USC § 2703(c)(1)(C), see also 18 USC § 2702(c)(2); and “incident to the rendition of the service or to the protection of the rights of the [company’s] property, 18 USC § 2702(c)(3). 18 USC § 2702(c)(4) and 18 USC § 2702(b)(8) provide that providers may disclose information if the provider believes, in good faith, that an “emergency 6

involving danger of death or serious physical injury to any person requires disclosure without delay of information relating to the emergency.”

Section 2707 provides a civil action for any person aggrieved by a knowing or intentional violation of 18 USC § 2702. Id. § 2707.

d.

Foreign Intelligence Surveillance Act (FISA).

In 1978 Congress enacted the Foreign Intelligence Surveillance Act (FISA) which limits the means by which the government can engage in electronic surveillance in the United States for foreign intelligence purposes. Electronic surveillance in the United States is prohibited except that the government may engage in such surveillance for foreign intelligence purposes -- but only if a warrant is obtained under FISA. The Act is the exclusive means by which electronic surveillance and the interception of domestic wire, oral and electronic communications may be conducted.14 18 U.S.C. § 2511(2)(f). Hence, FISA prohibits the NSA or the President, except in certain narrowly defined circumstances, from authorizing domestic electronic surveillance for foreign intelligence purposes unless the Attorney General applies for, and the FISA Court approves, a warrant application. 50 U.S.C. §§ 1802, 1804, 1811.

4.

U.S. Constitution.

Finally, under the First and Fourth15 Amendments to the U.S. Constitution, Maine telephone customers have a reasonable expectation of privacy in the communications that they make through the
14

Both in the statute itself, see 18 U.S.C. § 2511(2)(f) (FISA and its criminal law counterparts “shall be the exclusive means by which electronic surveillance . . . may be conducted”), see, e.g., H.R. Rep. No. 95-1283, pt. I, at 22 (1978) (“The procedures in the bill would be exclusive by means by which electronic surveillance . . . could be used for foreign intelligence purposes.”). 15 The Fourth Amendment provides: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

7

Verizon telecommunications network, and in the records pertaining to their communications transmitted, collected and stored by Verizon telecommunications network.

After the Katz decision, supra, the Fourth Amendment “now shields private speech from unreasonable surveillance.” United States v. United States District Court for the Eastern District of Michigan et al., 407 U.S. 297, 314 (1972) (“the broad and unsuspected governmental incursions into conversational privacy which electronic surveillance entails necessitate the application of Fourth Amendment safeguards.” (footnote omitted)).

Because Title III provides statutory protection for privacy of electronic communications, few courts have had occasion to apply Fourth Amendment standards to Internet transmissions like e-mail. In United States v. Maxwell, 45 M.J. 406 (C.A.A.F. 1996), However, the Court of Appeals for the Armed Forces found that “the transmitter of an e-mail message enjoys a reasonable expectation that police officials will not intercept the transmission without probable cause and a search warrant. Id. at 418. While the sender bears the risk that “an employee of the company will read e-mail against company policy . . . this is not the same as the police commanding an individual to intercept the message.” Id.

5.

Verizon’s Acknowledgement of Its Privacy Obligations.

In a pamphlet entitled “Verizon Extra,” that Verizon mailed to its Maine residence customers as a “bill-stuffer” in May 2006, the Company acknowledged its obligation under Federal law to protect the privacy of its customers’ sensitive service information:

Under Federal Law, we have the duty to protect the confidentiality of your telecommunications service information. This information includes the services and 8

products you purchase, account activity (for example, the telephone numbers you dial), and charges incurred. Verizon Extra, ME 5/06 (Res), p.3. Hence, it is entirely appropriate for this Commission to investigate the possible unauthorized disclosure by Verizon of Maine customers’ sensitive telephone record information.

D. PROTECTIONS FROM DECEPTIVE ACTS AND PRACTICES. If Verizon violated its on customer privacy policies regarding how it handles sensitive customer information, that action may constitute deceptive act or practice under Maine’s Unfair Trade Practices Act, 5 M.R.S.A. § 205-A et seq.16

The Maine Commission has jurisdiction to investigate deceptive practices by telecommunications companies. The Commission’s rules provide that telephone carriers “shall not engage in conduct prohibited by the Maine Unfair Trade Practices Act . . . and related consumer protection statutes.”17.

In its Response, Verizon states “to the extent it provides assistance to the government for national security or other purposes, it ‘will provide customer information to a government agency only where authorized by law for appropriately-defined and focused purposes[,]”, see Verizon Response at

16

5 M.R.S.A § 207 provides: Unlawful acts and conduct Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are declared unlawful . . . .

17

See PUC Rules, Chapters 290, 291 and 292, Standards For Billing, Credit and Collection and Customer Information For Eligible Telecommunications Carriers, Non Eligible Telecommunications Carriers, and Interexchange Carriers, Section 6B (Unfair or Deceptive Trade Practices, Application of Maine Unfair Trade Practices Act).

9

2, and that “Verizon ‘has a longstanding commitment to vigorously safeguard [its] customers’ privacy,’ as reflected in, among other things, its publicly available privacy principles.” Id. at 2-3.

The Commission has the authority to review Verizon’s policies and determine whether the Company has adhered to them.

E.

THE ALLEGATIONS. The Complainants have attached and incorporated two newspaper articles18 in their Complaint.

Those articles describe how -- without first obtaining warrants -- the NSA has monitored international phone calls made to and from people in the United States. The articles indicate that “leading telecommunications companies” have given the NSA access to their electronic switches so that the NSA is able to “[tap] directly into some of the American telecommunications system’s main arteries” to conduct wholesale surveillance of international calls.19 However, indications are that, as the NSA has been hunting for terrorists, the “communications technology [that it uses] is so advanced that it probably would be next to impossible for the NSA to filter out all of the [domestic] U.S.-based electronic communications.”20 In short, in order to co-operate with the NSA’s warrantless surveillance program, certain Bell Companies have given that agency the access to the connections necessary to monitor both international and domestic telecommunications.

In response to those newspaper articles, the Complainants have asked Verizon for its assurance that Verizon has not granted the NSA access to any Verizon voice or data switch in Maine. They also
18

Those articles include “Bush Lets U.S. Spy on Callers Without Courts,” New York Times, December 16, 2005; and “U.S. Spying is Much Wider, Some Suspect,”Los Angeles Times, December 25, 2005.
19

“U.S. Spying is Much Wider, Some Suspect,” Los Angeles Times, December 25, 2005. Id.

20

10

sought assurance that Verizon has not given the NSA warrantless access to international or domestic calls.

In response, Verizon suggests that most details about the NSA program are highly classified,21 and therefore Verizon “cannot either confirm or deny cooperation in such a program.”22 The Complainants state that, by itself, Verizon’s refusal to provide a substantive answer to the questions about cooperation with the NSA is itself an “unreasonable utility practice,” under Section 1302, and therefore the Commission should open an investigation.

Further allegations appear in a third newspaper article23 that was attached to the May 15, 2006 Procedural Order in this case. That article, which appeared in USA Today, reported that since 2002, Verizon has been providing the NSA with data concerning the domestic telephone calls placed by its customers. Those calling records have been provided without warrants and without approval from the Foreign Intelligence Surveillance Act (FISA) Court.24 a. Verizon’s Failure to Respond to Commission’s Request.

21

Verizon has failed to identify exactly what constitutes “highly classified” material. Verizon appears to define the term broadly, with the effect that it has no limits. Its position appears to be that any discussion of whether and what Verizon may have provided to the NSA is a subject that is “classified,” and therefore cannot be investigated. However, the area of inquiry requested by the Complaint is more narrow. The Complaint asked the Commission to investigate whether Verizon has released proprietary customer information. This is a discreet issue that the Commission can investigate. See Section H, below.
22

E-mail message of Drew C. Arena to J.D.Cowie (Tuesday, April 11, 4:24 pm) attached to the Complaint. NSA Has Massive Database of American’s Phone Calls,” USA Today, May 11, 2006.

23

24

Enacted in 1978, the FISA law requires that the government must obtain search warrants, approved by the secret FISA court, for wiretaps in national security cases. It authorizes a judge on the FISA court to grant an application for an order approving electronic surveillance to “obtain foreign intelligence information” if “there is probable cause to believe that . . . the target of the electronic surveillance is a foreign power or an agent of a foreign power,” and that “each of the facilities or places at which the surveillance is directed is being used, or is about to be used, by a foreign power or an agent of a foreign power.” 50 U.S.C. § 1805(a)(3).

11

In the 5/15/2006 Procedural Order to which the USA Today article was attached, the Commission requested that Verizon address “the extent to which the actions alleged in the USA Today article implicate the privacy rights of Maine telephone service subscribers described by 35-A M.R.S.A. §7101-A.” To date, Verizon has not responded to the Commission’s request.

F.

STANDARD OF REVIEW – VERIZON’S MOTION TO DISSMISS. In its “Response to Ten-Person Complaint,” Verizon asks the Commission to dismiss the

Complainant because “the PUC has no authority to grant the relief requested…”25 In effect, Verizon’s Response is a motion to dismiss under Rule 12(b)(6) of the Maine Civil Rules of Procedure.26 That is, it is a motion that effectively asserts that the Complainants have failed “to state a claim upon which relief can be granted.”

When the Commission reviews such a motion, the scope of review is one that accepts the facts as alleged in the complaint. That is, a motion to dismiss presumes that the facts as alleged in the complaint are true; furthermore, reasonable inferences that can be drawn from those facts are construed most favorably to the plaintiffs. Heber v. Lucerne-in-Maine Village Corp., 2000 ME 137, ¶7, 755 A.2d 1064,1066. As stated in the most recent Comments27 on the Maine Rules of Civil Procedure, A court reviewing a motion to dismiss a complaint pursuant to M.R.Civ.P. 12(b)(6), will consider the facts alleged in the complaint as if they were admitted. Libner v. Maine County Commissioners Ass’n, 2004 ME 39, ¶ 7, 845, A.2d 570, 572; Napieralski v. Unity Church, 2002 ME 108, ¶ 4, 802, A.2d 391, 302. The complaint must be examined “in the light most favorable to the
25

Verizon Response, p. 6.

26

Procedures not specifically addressed by Chapter 110 (Rules of Practice and Procedure) of the Commission’s rules are governed by the Maine Rules of Civil Procedure and the procedural requirements of 5 MRSA § 8001, et seq. and Title 35-A of the Maine Revised Statutes. PUC Rules, Chapter 110, (Rules of Practic and Procedure), Section 101 (Applicability).
27

The most recent Comments on the Maine Rules of Civil Procedure can be found at the following web-address: http://www.courts.state.me.us/rules_forms_fees/rules/MRCivP-AdvNotes9-05.pdf

12

plaintiff to determine whether it sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory.” In re Wage Payment Litigation, 2000 ME 162, ¶ 3, 759, A.2d 217, 220. Dismissal is warranted only “when it appears beyond a doubt that the plaintiff is not entitled to relief under any set of facts,” that might be proven in support of the claim. Johanson v. Dunnington, 2001 ME 169, ¶ 5, 785 A.2d 1244, 124546.

G.

VERIZON’S DEFENSES. In its Response, Verizon does not deny that it is providing the NSA access to its electronic

switches so that the NSA can conduct surveillance of international and domestic calls.28 Instead, relying on a series of federal statutes, Verizon argues that it is prohibited from providing any information concerning its cooperation with the NSA program and points to various exceptions to the general prohibition on disclosure of certain sensitive customer information. However, Verizon’s references to those statutory sections do not tell the whole story.

1.

Wiretap Act.

For instance, Verizon argues that if it participated in activities relating to the NSA program pursuant to the Wiretap Act, that fact as well as any records relating to such activities must remain a secret under federal law, citing to 18 U.S.C. 2511(2)(a)(ii)(B).29 Verizon suggests that any electronic surveillance at issue in this case may have been lawful because it was subject to a proper certification, however, Verizon argues that “any written authorizations or certifications relating to activities under the program” are “highly classified” and that any activities relating to the NSA program undertaken

28

Verizon does respond by repeating the statements that it has made in a couple of carefully-worded press releases. That is, it explains that it “has not turned over data on local calls to the NSA,” and that it will provide customer information to the government “only where authorized by law for appropriately-defined and focused purposes.” Verizon Response, p.2.
29

Verizon Response, p.3.

13

pursuant to the Wiretap Act and “any records relating to such activities must remain a secret under federal law.”30

However, that description of the Wiretap Act does not present the full picture. Verizon can disclose that information if required by legal process. Section 2511(2)(a)(ii)(B) specifically provides: No provider of wire or electronic communications serve…shall disclose the existence of any interception or surveillance or the devise used to accomplish the interception or surveillance with respect to which the person has been furnished a court order or certification under this chapter, except as may otherwise be required by legal process and then only after prior notification to the AG or to the principal prosecuting attorney of a State or any political subdivision of a State, as may be appropriate. Id. (emphasis added). In other words, if Verizon is claiming a certification defense, the statute specifically allows for the disclosure of this information as “required by the legal process.”

To the extent Verizon argues disclosure of any certification it received will harm national security, 18 U.S.C. § 1806(f) provides for review and disclosure as necessary of certifications and other materials related to the surveillance. Specifically, the provision provides: the court may disclose to the aggrieved person, under appropriate security procedures and protective orders, portions of the application, order, or other material relating to the surveillance only where such disclosure is necessary to make an accurate determination of the legality of the surveillance. Id. (emphasis added).

Verizon states: “Section 2511(2)(a) expressly authorizes companies to provide ‘information, facilities, or technical assistance’ upon receipt of a specified certification ‘notwithstanding any other law.’” Verizon Response at 5, n. 3. Section 2511(2)(a)(ii)(B), in relevant part, states that companies

30

Id., p. 2-3.

14

“are authorized to provide information, facilities, or technical assistance … if such [company] has been provided -- … “ (B) a certification in writing by a person specified in section 2518(7) of this title [18 USC § 2518(7)] or the Attorney General of the United States that no warrant or court order is required by law, that all statutory requirements have been met, and that the specified assistance is required setting fourth the period of time during which the provision of the information, facilities, or technical assistance is authorized and specifying the information, facilities, or technical assistance is required. Id. (emphasis added).

Furthermore, news reports and statements made by senior executives at Quest, -- the company that refused to cooperate with the government in the NSA program -- raise serious questions as to whether there was a certification. Quest has reportedly said that the government approached Quest for access to the private telephone records of Quest’s customers but did not offer certification to address Quest’s concerns about the program’s legality. As a result, former Chairman and Chief Executive Officer of Quest, Joe Nacchio, refused the government’s request due to legal concerns. Mr. Nacchio made inquiry as to whether a warrant or other legal process had been secured in support of that request. When he learned that no such authority had been granted and that there was disinclination on the part of the authorities to use any legal process, including the Special Court which had been established to handle such matters, Mr. Nacchio concluded that these requests violated the privacy requirements of the Telecommunications Act. Accordingly, Mr. Nacchio issued instructions to refuse to comply with these requests. These requests continued throughout Mr. Nacchio’s tenure and until his departure in June 2002. See Declaration of Shana E. Scarlett in Support of Plaintiff’s Memorandum of Points and Authorities in Response to Court’s May 17, 2006 Minute Order, Ex. 1., filed May 22, 2006 in Hepting v. AT&T, No. C-06-00672-VRW (N.D. Cal.) (attached hereto as Exhibit 1).

15

2.

Foreign Intelligence Surveillance Act.

In its Response, Verizon also argues that if its activities relating to the NSA surveillance program are undertaken pursuant to the Foreign Intelligence Surveillance Act (FISA), that fact, and any activities relating to those activities must remain secret under federal law, citing 50 U.S.C. §1805 (c)(2)(B) & (C). 31

However, the U.S. Code speaks directly to the question of access to classified materials that concern FISA surveillance activity where the legality of the surveillance program is at issue. Congress has recognized the need for due process in electronic-surveillance cases involving national security and has created a statutory mechanism for that purpose. Specifically, 50 U.S.C. §1806(f) speaks directly to the question of the access of a litigant obtaining information about electronic surveillance. That sections reads, in pertinent part: …whenever any motion or request is made by an aggrieved person …to discover or obtain applications or orders or other materials relating to electronic surveillance…, the United States district court or, where the motion is made before another authority, the United States district court …shall, notwithstanding any other law, if the Attorney General files an affidavit under oath that disclosure or an adversary hearing would harm the national security of the United States, review in camera and ex parte the application, order, and such other materials relating to the surveillance as may be necessary to determine whether the surveillance of the aggrieved person was lawfully authorized and conducted. In making this determination, the court may disclose to the aggrieved person, under appropriate security procedures and protective orders, portions of the application, order, or other materials relating to the surveillance only where such disclosure is necessary to make an accurate determination of the legality of the surveillance. 50 U.S.C. §1806(f)(emphasis added); see also: 50 U.S.C.§ 1845(f) (similar provision for review of evidence necessary to determine legality of the collection of non-content information through pen registers or trap-and trace devices).

31

Verizon Response, p.3

16

3. Verizon’s Assertion of the “State Secrets” Privilege. In its response, Verizon also argues that it cannot provide information about its cooperation with the NSA surveillance program because in proceedings like this one the government is entitled to invoke the “state secrets” privilege. Citing United States v. Reynolds, 345 U.S. 1 (1953), Verizon argues that the information at issue here may be relevant to a Commission investigation, but is the kind of information that cannot not be disclosed because disclosure would be harmful to national security.

However, there are limits to the “state secrets” privilege. As noted in United States v. Reynolds, supra, to assert the privilege, certain requirements must be met. The privilege belongs to the Government and must be asserted by it; it can neither be claimed nor waived by a private party. It is not to be lightly invoked. There must be a formal claim of privilege, lodged by the head of the department which has control over the matter, after actual personal consideration by that officer. The court itself must determine whether the circumstances are appropriate for the claim of privilege, and yet do so without forcing a disclosure of the very thing the privilege is designed to protect. United States v. Reynolds, 345 U.S. at 7-8 (footnotes omitted).

Consideration of the state secrets privilege can only proceed if the privilege was properly invoked under the procedures described by Reynolds. Sterling v. Tenet, 416 F.3d 338 (4th Cir. 2005). Hence, in this case the state secrets privilege does not apply the proper procedures have not been followed. The government has not asserted the privilege,32 and, as a private party, Verizon cannot assert it.33

32

That is, the head of the Attorney General’s Office, Alberto Gonzales, has not asserted the states secrets privilege in this proceeding.. Nor has the Attorney General asserted that privilege in the investigations by other state utility commissions (i.e., Vermont and Washington) of cooperation by other Bell companies with the NSA’s telecommunications surveillance program.
33

Furthermore, Verizon

17

Furthermore, even if the government were to step in and assert the privilege here, the Maine Commission, as the trier of fact, is the entity that determines whether the circumstances are appropriate for the claim of the state secrets privilege. Although an objection validly taken to production, on the ground that this would be injurious to the public interest, is conclusive, it is important to remember that the decision ruling out such documents is the decision of the judge. . . . It is the judge who is in control of the trial, not the executive… . Duncan v. Cammell, Laird & Co., [1942] A. C. 624, 642, cited in footnote 21 in United States v. Reynolds, supra, at 8 (emphasis supplied in Court’s footnote.)

In other words, it is the Maine Commission that must determine whether an investigation of Verizon would inevitably lead to the disclosure of matters that the law regards as confidential. Totten v. United States, 92 U.S. 105,107(1876). In making that determination, the Commission applies a balancing approach.34 “Too much judicial inquiry into the claim of privilege would force disclosure of the thing the privilege was meant to protect, while a complete abandonment of judicial control would lead to intolerable abuses.” United States v. Reynolds, supra, at 8. The Commission can use “creativity and care [to] devise procedures which [will] protect the privilege and yet allow the merits of the controversy to be decided in some form.” DTM Research, LLC v. AT&T Corp., 245 F.3d 327, 334 (4th Cir. 2001). For instance, the use of in camera proceedings may provide the protection necessary to protect against the disclosure of state secrets. In any case, as the U.S. Supreme Court noted in 1953, “Judicial control over the evidence in a case cannot be abdicated to the caprice of executive officers.” Id. at 9-10.

34

Tenet v. Doe, 544 U.S. 1, 9 (2005)

18

Contrary to the suggestion in Verizon’s Response, the assertion of the “state secrets” privilege does not automatically lead to a situation where the court must dismiss the case altogether. Crater Corp. v. Lucent Techs., Inc., 423 F.3d 1260 (D.C. Cir. 2005) For instance, the privilege does not protect from discovery material that is not strictly necessary to prevent potential harm to national security. Ellsberg v. Mitchell, 709 F.2d 51, 57 (D.C. Cir. 1983). In order to determine whether the case can proceed, the court must first examine the information needed to pursue the complainants’ claims, and then determine whether any of the complainants’ claims can be adjudicated without the privileged information. Crater Corp. v. Lucent Techs., Inc., supra, at 1267-68; see also: Tash Hepting, et al. v AT&T Corporation, Dkt. No. C-06-00672-VRW, Order, June 6, 2006 (N.D.Cal)(case cannot proceed and discovery cannot commence until court examines classified documents to assess whether state secrets privilege applies).

Here, Verizon seeks to prevent the Maine Commission from adjudicating any part of the complainants’ case. However, such a wholesale application of the state secrets privilege is unnecessary and inappropriate. In re United States, 872 F.2d 472, 478 (D.C. Cir. 1989) (affirming lower court’s denial of motion to dismiss in favor of an “item-by-item determination of the privilege”); Crater Corp. v. Lucent Techs., Inc., supra, at 1267-70 (reversing order dismissing case where factual record was not sufficiently developed to determine effect of state secrets privilege on plaintiff’s claims).

Sometimes the circumstances are such that the case can proceed because the record in the case can be developed without impinging on the state secrets privilege. See: Crater Corp. v. Lucent Techs., Inc., at 1268-69.

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H.

THERE ARE VARIOUS SUBJECT AREAS THAT THE MAINE COMMISSION CAN INVESTIGATE. In their complaint, the Complainants ask the Commission to determine whether Verizon has

violated any Maine or federal statutes by providing warrantless access to Verizon-Maine facilities. In its Response, Verizon claims that it is prohibited from providing any information concerning its cooperation with the NSA surveillance program. If we accept Verizon’s argument arguendo, there are nevertheless several subject-areas that the Maine Commission is still able to investigate. (a) The Maine Commission Should Open An Investigation Into The Serious Allegations That Have Been Raised.

Specifically, given the allegations in the Complaint, the Commission can investigate the following subject-areas:35 1. Since 2001, has Verizon ever given the government access to the hardware or software that it uses to deliver communications services in response to a request that was not compelled by one of the following: (a) a grand jury subpoena, (b) a national security letter, (c) a valid pen register or trap-and-trace order, (d) a valid administrative subpoena, or (e) a request for documents and materials under Section 215 of the Patriot Act. If that access was used to monitor the content of communications by Verizon-Maine customers, what type of communications were monitored? How many Verizon-Maine customers were subject to that surveillance? On what date(s) did the surveillance take place? Was the surveillance continual or intermittent? Were the customers that were subject to surveillance ever notified? Does the government currently have that same access to the communications of Verizon-Maine customers? What legal authority was cited by the government to have access to those communications without a valid wiretap? Since 2001, has Verizon ever turned over customer records to the federal government in response to a request that was not compelled by one of the following: (a) a grand jury subpoena, (b) a national security letter, (c) a valid pen register or trap-and-trace order, (d) a valid administrative subpoena, or (e) a request for documents and materials under Section 215 of the Patriot Act? How many times did Verizon receive such a request? What authority was cited in each request? What agency or department made the request? How many times did Verizon comply with such a request? What information did Verizon share with the government in response to each request? Were Verizon-

2.

35

The first two subject-areas for investigation are areas of investigation suggested by Representative John Conyers, Jr., in his January 20, 2006 letter to the Ivan Sedenberg of Verizon Communications, and the CEO’s of 19 other major communications companies

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Maine customers ever notified that information about their telephone use was given to the government? In addition, the Commission can still investigate whether Verizon has violated Maine law and federal law without resort to classified or privileged materials.

(b)

Maine Law.

Maine telephone customers have a right to know whether information about their phone use is not being kept private. The Maine Commission is the agency that is responsible for enforcing the requirements of Title 35-A – and the privacy rights protected by 35-A M.R.S.A. § 7101-A. At a minimum, the Commission should be able to assure Verizon’s Maine customers that, if their telephone records are being reviewed by government officials, that action is taking place through legal means.

If Verizon has provided the government with the sort of access to its facilities that permits either interception of the communications of its Maine customers, or monitoring of their network traffic, the Commission need not necessarily determine the exact method by which the interception was performed or the exact arrangement between the government and Verizon regarding control of those facilities. The application of the privacy statute (35-A M.R.S.A. § 7101-A) does not turn on the methods or equipment used by Verizon and the government. Instead, the issue to be investigated can be focused more particularly: Has the privacy of Maine telephone customers been violated by Verizon?

(c)

Federal Law.

Similarly, the Commission can investigate whether federal laws governing the privacy of communications have been violated – without relying on classified or privileged information. As noted earlier, 18 U.S.C. § 2511(1)(a) prohibits the intentional interception of wire and electronic

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communications.36 The statute defines “intercept” as “the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device.” 18 U.S.C. §2510(4). “Contents” include “any information concerning the substance, purport, or meaning of [a] communication.” 18 U.S.C. §2510(8).

Verizon is “intercepting” the communications of its Maine customers in violation of 18 U.S.C. §2511 if, as stated already by President Bush,37 the NSA is conducting warrentless surveillance of telephone and internet communications of persons within the United States, including Verizon customers. So long as Verizon has intercepted the communications of its Maine customers, the complainants in this case need not show the exact method by which the interception was performed, or the exact arrangement between Verizon and the government regarding control of Verizon’s facilities. The application of 18 U.S.C. §2511 “should not turn on the type of equipment that is used, but whether the privacy or [communications] has been invaded in a manner offensive to the words and intent of the Act.” Campiti v. Walonis, 611 f.2d 287, 392 (1st Cir. 1979).

Hence, in order to show that Verizon has violated Title III (the Wiretap Act), Complainants need prove only that the communications were unlawfully intercepted. Complainants need not prove what the government did with the communications. See Jacobsen v. Rose, 592 F.2d 515, 522 (9th Cir. 1978) (“Because Nevada Bell joined with the Washoe officials in the wiretapping, its failure to listen to the tapes should not insulate it from liability for the invasion of privacy it helped to occasion.”). Likewise, to show that Verizon has unlawfully divulged content and non-content records (i.e., call
36

See also: 18 U.S.C. §2511(3)(a) which states Except as provided in paragraph (b) of this subsection, a person or entity providing an electronic communication service to the public shall not intentionally divulge the contents of any communication (other than one to such person or entity, or an agent thereof) while in transmission on that service to any person or entity other than an addressee or intended recipient of such communication or an agent of such addressee or intended recipient. See: “NSA has Massive Database Of Americans’ Phone Calls,” USA Today (May 11, 2006).

37

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detail records) to the government, Complainants simply need prove Verizon has divulged information, not what the government subsequently did with it. See 18 U.S.C. §§ 2511(1)(c), (1)(d), and (3)(a); 47 U.S.C. § 605; 18 U.S.C. § 2702. As a result, in order to make their case, the Complainants do not require, for example, proof of any specific details about whether or how the government selects particular communications or records to review after Verizon has unlawfully intercepted or disclosed all of them, or the names or other identifying details of suspects, disclosure of which might arguably harm national security. That kind of information is simply not necessary where, as here, the question is whether Verizon has violated Title III.

(d)

Other State Commissions Have Opened Investigations.

The Washington Utilities and Transportation Commission agreed to open an investigation of possible unlawful disclosure of private consumer information by Washington telecommunications companies to the NSA in light of the “important issues of broad public concern” that have been raised. See Letter from Washington Utilities and Transportation Commission, dated May 25, 2006 (attached hereto as Exhibit 2). Similarly, the Vermont Department of Public Service served information requests on carriers seeking various information including but not limited to: 1) whether carriers disclosed customer call record data to the NSA or other state or federal government agencies and, if so, the type of information carriers disclosed; 2) whether carriers did so voluntarily at the request of the government or in response to some exercise of government authority (and if so, what government authority); 3) were carriers compensated for providing the information, 4) did carriers modify equipment to permit access to data by the government and 5) what are the carriers’ policies for responding to state law enforcement requests for call records. See Letter from Vermont Department of Public Service to carriers dated May 17, 2006 (attached hereto as Exhibit 3).

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I.

CONCLUSION. Why should the Commission open an investigation of Verizon’s activities? Because the

allegation is that Verizon and other Bell Companies have regularly shared customer telephone records with the National Security Agency, without legal authority. If true, those companies are cooperating in an surveillance program that violates the privacy of telephone customers. Federal law requires that the Companies not permit access to customers’ private information except as required by law

Maine telephone customers have a right to know whether information about their phone use is not being kept private. As the administrative agency that is responsible for enforcing the requirements of Title 35-A – and the privacy rights protected by 35-A M.R.S.A. § 7101-A -- the Commission should be able to assure Verizon’s Maine customers that if their telephone records are accessed by government officials, that action is taking place through legal means.

The Commission’s powers and duties include the power to obtain information, promulgate rules necessary to carry out its responsibilities under Title 35-A and investigate matters related to public utilities. See 35-A M.R.S.A. §§ 101-121. The Commission has the authority to investigate complaints against public utilities that certain practices are unreasonable, id. § 1302, and may impose sanctions and penalties for violations of Title 35-A. Id. §§ 1501-1512.

In a federal system, sometimes it is the role of the states to make sure that the federal government does not overstep its authority. There is no requirement that when the privacy of customers is at issue, such matters must be addressed only on a national basis. As the state agency that is charged with protecting customers from wrongdoing by utilities, the Public Utilities Commission is the proper agency to conduct such an investigation.

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When Maine telephone customers petition the Commission and ask for an investigation of the possible violation of their privacy of rights, the Commission should not permit Verizon to interpose arguments about state secrets and national security, and thereby bar the investigation. In its Response, Verizon claims that any cooperation that it has given to the NSA and its surveillance program is “entirely within the bounds of the law.”38 So that the Commission can protect the privacy interests of Verizon-Maine telephone customers, the Commission should open an investigation and test that claim. Respectfully submitted,

William C. Black Deputy Public Advocate

Paulina McCarter Collins Contract Attorney

38

Verizon Response, p. 4.

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