Phone Cos Can Easily Break Out Call Data From Content

NEW YORK -(Dow Jones)- As more people react to reports the U.S. government may be monitoring people's telephone calls, focus has increased on how long-distance calls are handled by telecom companies.

In sum, roughly 70% of long-distance calls are routed by three companies - AT&T, Verizon Communications' MCI and Sprint Nextel. The structure of the long-distance and local networks allow the phone companies to easily break out data such as call time, origin and destination, and length without including the conversation.

AT&T's relative silence in response to recent reports - in comparison to the more vocal Verizon and BellSouth - and its majority role in handling long-distance calls have led some to suspect that long-distance calls are at the root of any request from the government.

Adding to that suspicion was Verizon's comments. The company said that until four months ago it consisted of five businesses and that "none of these companies provided customer records or call data." Verizon since then has completed the acquisition of MCI.

It makes sense, industry experts said, that the government could be focused on long-distance calls.

"For the most part, calls that would catch the eye would be long-distance calls," said Todd Rosenbluth, an analyst at Standard & Poor's.

The long-distance network operates under an international technology standard called Signaling System 7, which allows information about a call to be recorded.

When a person makes a phone call, the voice signal is changed to a light impulse that runs to the local phone company's central office. At that point, the call is routed to the long-distance provider's switching center, where it speeds across the network to the recipient's local phone central office, where it is transformed back to a voice signal.

As the call makes its way to the long-distance switching center, the system issues a Signaling System 7 packet that includes data such as the origin and destination of the call. It's a separate stream that runs along the light impulse.

"They are parallel highways that are physically separate from the calls, but linked together," said Lisa Pierce, an analyst with Forrester Research.

If the government wanted to, it could easily get information from the packet data records without compromising the content of the calls, she said. The information, however, would have to be obtained from the long-distance companies.

While reports center on the National Security Agency's targeting of the major phone companies, the Internet phone providers could eventually be asked to give up data, Pierce said. Their calls are broken up into bits and pieces called packets and routed through the Web before being placed together. The NSA could take a hold of the packets that contained the call information.

While obtaining data about a call, rather than the conversation, is seemingly a less severe violation of privacy, it doesn't necessarily make it legal.

"Call detail records are specifically protected in Section 222 of the Telecommunications Act," said Jonathan Marashlian, a partner at Helein Law Group PC, a telecom law firm based in McLean, Va.

Laws impose a general duty to all telecom carriers to protect the confidentiality of its customers' information, he said.

Three of the Baby Bells - AT&T, Verizon, and BellSouth - have been under fire from the public following a report in USA Today claiming the companies agreed to hand over billions of domestic phone records data to the NSA. The fourth Bell, Qwest Communications International, said it refused to cooperate with the NSA.

The phone companies have denied the report. AT&T said it doesn't allow wiretapping or give out customer information without legal authorization. BellSouth said the NSA had never contacted it regarding information on domestic calls.

Verizon added that the USA Today report erred in its claim that the phone companies had handed over local phone records, saying that in many cases, those records aren't kept because customers aren't typically billed for individual local calls.

Sprint declined to comment on the USA today report. "Sprint Nextel is dedicated to protecting the privacy of our customers' communications and complies fully with lawful processes," spokeswoman Leigh Horner said.

Since the report, the stocks of AT&T, Verizon and BellSouth have fallen about 4% each. Sprint shares, meanwhile, are down 2.2% over that period.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 18th May 2006