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105th Congress                                                   Report
 2d Session             HOUSE OF REPRESENTATIVES                105-425
_______________________________________________________________________


 
                WIRELESS PRIVACY ENHANCEMENT ACT OF 1998

                                _______
                                

 March 3, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 2369]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Commerce, to whom was referred the bill 
(H.R. 2369) to amend the Communications Act of 1934 to 
strengthen and clarify prohibitions on electronic 
eavesdropping, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Hearings.........................................................     5
Committee Consideration..........................................     5
Rollcall Votes...................................................     5
Committee Oversight Findings.....................................     5
Committee on Government Reform and Oversight.....................     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Committee Cost Estimate..........................................     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     7
Advisory Committee Statement.....................................     7
Constitutional Authority Statement...............................     7
Applicability to Legislative Branch..............................     8
Section-by-Section Analysis of the Legislation...................     8
Changes in Existing Law Made by the Bill, as Reported............    11

                               Amendment

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Wireless Privacy Enhancement Act of 
1998''.

SEC. 2. COMMERCE IN ELECTRONIC EAVESDROPPING DEVICES.

  (a) Prohibition on Modification.--Section 302(b) of the 
Communications Act of 1934 (47 U.S.C. 302a(b)) is amended by inserting 
before the period at the end thereof the following: ``, or modify any 
such device, equipment, or system in any manner that causes such 
device, equipment, or system to fail to comply with such regulations''.
  (b) Prohibition on Commerce in Scanning Receivers.--Section 302(d) of 
such Act (47 U.S.C. 302a(d)) is amended to read as follows:
  ``(d) Equipment Authorization Regulations.--
          ``(1) Privacy protections required.--The Commission shall 
        prescribe regulations, and review and revise such regulations 
        as necessary in response to subsequent changes in technology or 
        behavior, denying equipment authorization (under part 15 of 
        title 47, Code of Federal Regulations, or any other part of 
        that title) for any scanning receiver that is capable of--
                  ``(A) receiving transmissions in the frequencies that 
                are allocated to the domestic cellular radio 
                telecommunications service or the personal 
                communications service;
                  ``(B) readily being altered to receive transmissions 
                in such frequencies;
                  ``(C) being equipped with decoders that--
                          ``(i) convert digital domestic cellular radio 
                        telecommunications service, personal 
                        communications service, or protected 
                        specialized mobile radio service transmissions 
                        to analog voice audio; or
                          ``(ii) convert protected paging service 
                        transmissions to alphanumeric text; or
                  ``(D) being equipped with devices that otherwise 
                decode encrypted radio transmissions for the purposes 
                of unauthorized interception.
          ``(2) Privacy protections for shared frequencies.--The 
        Commission shall, with respect to scanning receivers capable of 
        receiving transmissions in frequencies that are used by 
        commercial mobile services and that are shared by public safety 
        users, examine methods, and may prescribe such regulations as 
        may be necessary, to enhance the privacy of users of such 
        frequencies.
          ``(3) Tampering prevention.--In prescribing regulations 
        pursuant to paragraph (1), the Commission shall consider 
        defining `capable of readily being altered' to require scanning 
        receivers to be manufactured in a manner that effectively 
        precludes alteration of equipment features and functions as 
        necessary to prevent commerce in devices that may be used 
        unlawfully to intercept or divulge radio communication.
          ``(4) Warning labels.--In prescribing regulations under 
        paragraph (1), the Commission shall consider requiring labels 
        on scanning receivers warning of the prohibitions in Federal 
        law on intentionally intercepting or divulging radio 
        communications.
          ``(5) Definitions.--As used in this subsection, the term 
        `protected' means secured by an electronic method that is not 
        published or disclosed except to authorized users, as further 
        defined by Commission regulation.''.
  (c) Implementing Regulations.--Within 90 days after the date of 
enactment of this Act, the Federal Communications Commission shall 
prescribe amendments to its regulations for the purposes of 
implementing the amendments made by this section.

SEC. 3. UNAUTHORIZED INTERCEPTION OR PUBLICATION OF COMMUNICATIONS.

  Section 705 of the Communications Act of 1934 (47 U.S.C. 605) is 
amended--
          (1) in the heading of such section, by inserting 
        ``INTERCEPTION OR'' after ``UNAUTHORIZED'';
          (2) in the first sentence of subsection (a), by striking 
        ``Except as authorized by chapter 119, title 18, United States 
        Code, no person'' and inserting ``No person'';
          (3) in the second sentence of subsection (a)--
                  (A) by inserting ``intentionally'' before 
                ``intercept''; and
                  (B) by striking ``and divulge'' and inserting ``or 
                divulge'';
          (4) by striking the last sentence of subsection (a) and 
        inserting the following: ``Nothing in this subsection prohibits 
        an interception or disclosure of a communication as authorized 
        by chapter 119 of title 18, United States Code.'';
          (5) in subsection (e)(1)--
                  (A) by striking ``fined not more than $2,000 or''; 
                and
                  (B) by inserting ``or fined under title 18, United 
                States Code,'' after ``6 months,''; and
          (6) in subsection (e)(3), by striking ``any violation'' and 
        inserting ``any receipt, interception, divulgence, publication, 
        or utilization of any communication in violation'';
          (7) in subsection (e)(4), by striking ``any other activity 
        prohibited by subsection (a)'' and inserting ``any receipt, 
        interception, divulgence, publication, or utilization of any 
        communication in violation of subsection (a)''; and
          (8) by adding at the end of subsection (e) the following new 
        paragraph:
  ``(7) Notwithstanding any other investigative or enforcement 
activities of any other Federal agency, the Commission shall 
investigate alleged violations of this section and may proceed to 
initiate action under section 503 of this Act to impose forfeiture 
penalties with respect to such violation upon conclusion of the 
Commission's investigation.''.

                          Purpose and Summary

    The purpose of H.R. 2369, the Wireless Privacy Enhancement 
Act of 1998, as amended, is to enhance the privacy of users of 
cellular and other mobile communications services. These 
changes are necessary to prohibit modification of currently 
available scanners and to prevent the development of a market 
for new digital scanners capable of intercepting digital 
communications.
    The bill has four main components. First, the bill would 
extend current scanning receiver manufacturing restrictions to 
prevent the manufacture of scanners that are capable of 
intercepting communications in frequencies allocated to new 
wireless communications, namely personal communications 
services, and protected paging and specialized mobile radio 
services. Second, the bill would add a prohibition on the 
modification of scanners and require the Federal Communications 
Commission (the Commission or FCC) to strengthen its rules to 
prevent the modification of scanning receivers, including 
through adopting additional requirements to prevent the 
tampering of scanning receivers. Third, the bill would make it 
unacceptable to intentionally intercept or divulge the content 
of radio communications. Lastly, the bill would improve the 
enforcement of privacy law by increasing the penalties 
available for violators and requiring the Commission to move 
expeditiously on investigations of potential violations.

                  Background and Need for Legislation

    Over 50 million Americans subscribe to cellular or other 
commercial mobile services. The majority of cellular services 
used today are provided with analog technology. Analog 
communications are susceptible to unauthorized eavesdropping 
from scanners since voice, an analog form of communication, 
need not be decoded when intercepted over a scanner. The 
Committee discovered through a hearing on wireless privacy in 
February 1997 how easily over-the-shelf scanners may be 
modified to enable them to intercept cellular communications. 
Digital cellular, the next generation of cellular services, and 
digital personal communications services (PCS) are less 
susceptible to unauthorized eavesdropping than analog cellular. 
PCS services are digital services that combine voice services 
with data (paging, messaging, caller identification) and 
possibly video services, over the same handset. While digital 
cellular and PCS are not immune from eavesdropping, they are 
currently more secure than analog cellular because the 
equipment for intercepting digital calls is vastly more 
expensive and complex than existing, off-the-shelf scanners 
that intercept analog communications (e.g., $200 vs. $10,000-
$30,000). However, one of the purposes of the bill is to 
prevent a market for developing for less expensive digital 
scanners by clearly prohibiting the authorization of such 
scanners by the FCC.
    Several existing statutes are intended to protect cellular 
users' privacy. Section 705(a) of the Communications Act of 
1934 prohibits the unauthorized interception and divulgence of 
radio communications, including cellular calls. This statute is 
not limited by its terms to analog radio communications and, 
therefore, would apply to digital cellular and PCS, as well as 
to other commercial mobile radio services such as paging, 
specialized mobile services, messaging services, etc. FCC rules 
also prohibit the interception of private conversations by 
radio scanners, whether or not the content of such radio 
communications is divulged (47 C.F.R. 15.9).
    Section 705(e)(4) of the Communications Act makes it 
illegal for a person to manufacture, assemble, modify, import, 
export, sell, or distribute equipment knowing or having reason 
to know that it is intended for the unauthorized interception 
and divulgence of radio communications. However, the FCC has 
only enforced this provision for satellite cable piracy.
    In addition to these provisions of the Communications Act 
and FCC regulations, the Electronic Communications Protection 
Act, 18 U.S.C. 2511 et seq. (1986) (ECPA), also prohibits the 
unauthorized interception or disclosure of cellular and other 
radio communications. Under ECPA, the manufacture, assembly, 
possession, sale or use of scanning devices which are 
``primarily useful'' for surreptitious interception and are 
sent through interstate mail are prohibited. ECPA is the 
principal statute used to prosecute unlawful interceptions. 
ECPA prohibits knowingly advertising interstate for any device 
``primarily useful'' for the surreptitious interception of 
electronic communications. See Section 2512(1)(c).
    While interception of cellular telephone calls is illegal, 
it is legal under existing statutes to intercept radio 
communications outside of the cellular bands as long as the 
communication is not divulged or does not ``benefit'' the 
interceptor. For example, people may intercept public safety 
communications on the latest emergency occurring in their 
vicinity. Typically, these communications can be intercepted by 
an off-the-shelf scanner. Prior to passage of the Telephone 
Disclosure and Dispute Resolution Act (TDDRA) (P.L. 102-556, 47 
U.S.C. 302(a)), which codified existing section 302, over 22 
brands of scanners were capable of intercepting the cellular 
bands. TDDRA, in part, was designed to decrease the manufacture 
and availability ofscanning devices capable of intercepting 
cellular communications. Under TDDRA, manufacturers are prohibited from 
manufacturing scanners that can be ``readily altered'' to intercept 
cellular communications. FCC Rule 15.121 defines ``readily altered.'' 
Specifically, existing section 302(b) of the Communications Act of 1934 
prohibits the manufacture, import, or sale of scanning devices that are 
capable of intercepting cellular calls, or of being ``readily altered'' 
for such interception. In section 302(d), Congress required the FCC to 
promulgate regulations denying authorization to scanners that are 
capable of receiving cellular transmissions. See 47 C.F.R. 
Sec. Sec. 15.121 and 15.37(f). The Committee has found that current 
scanning receivers may not be manufactured in a manner to effectively 
prohibit interception of these frequencies and the current law may not 
be read to apply to new technologies.

                                Hearings

    The Subcommittee on Telecommunications, Trade, and Consumer 
Protection held a hearing on cellular privacy on February 5, 
1997. The Subcommittee received testimony from: Mr. Thomas E. 
Wheeler, President, Cellular Telecommunications Industry 
Association; Mr. Bob Grove, President, Grove Enterprises; Mr. 
Jay Kitchen, President and CEO, Personal Communications 
Industry Association; Mr. Gary Shapiro, President, Consumer 
Electronics Manufacturers Association; Mr. Jerry Berman, 
Executive Director, Center for Democracy and Technology; Mr. 
James K. Kallstrom, Assistant Director in Charge, New York 
Division, Federal Bureau of Investigation, accompanied by Mr. 
James Y. Blankner, Inspector/Deputy Assistant Director, 
Information Resources Division, Federal Bureau of 
Investigation; Mr. William E. Kennard, then-General Counsel, 
Federal Communications Commission, accompanied by Mr. Richard 
Smith, Chief, Office of Engineering and Technology, Federal 
Communications Commission; and Mr. Robert S. Litt, Deputy 
Assistant Attorney General, Criminal Division, Department of 
Justice. Prior to the witnesses' testimony, a technological 
demonstration was conducted to highlight the ease with which 
scanning equipment can be ``readily altered'' to intercept 
cellular communications.

                        Committee Consideration

    On October 29, 1997, the Subcommittee on 
Telecommunications, Trade, and Consumer Protection met in open 
markup session and approved H.R. 2369 for Full Committee 
consideration, amended, by a voice vote.
    The Full Committee met in open markup session on February 
26, 1998, and ordered H.R. 2369 reported to the House, as 
amended, by a voice vote.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 2369 
reported. A motion by Mr. Bliley to order H.R. 2369 reported to 
the House, as amended, was agreed to by a voice vote, a quorum 
being present.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee held an oversight 
hearing and made findings that are reflected in this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee finds that 
H.R. 2369, the Wireless Privacy Enhancement Act of 1998, would 
result in no new or increased budget authority, entitlement 
authority, or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 2, 1998.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2369, the Wireless 
Privacy Enhancement Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kim Cawley 
(for federal costs), Alyssa Trzeszkowski (for revenues), and 
Jean Wooster (for private-sector mandates).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 2369--Wireless Privacy Enhancement Act of 1998

    CBO estimates that enacting this bill would have no 
significant effect on the federal budget. Because the bill 
would establish new criminal penalties and could affect 
receipts, pay-as-you-go procedures would apply. H.R. 2369 
contains no intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act of 1995 (UMRA), and would not 
affect the budgets of state, local, or tribal governments. H.R. 
2369 would impose a new private-sector mandate, but CBO 
estimates the direct cost to industry of complying with the 
bill would fall well below the statutory threshold for private-
sector mandates.
    H.R. 2369 would amend the Communications Act of 1934 to 
prohibit modifying any equipment used to communicate 
electronically in any manner that would not comply with 
regulations affecting electronic eavesdropping. The bill would 
direct the Federal Communications Commission (FCC) to prepare 
regulations to deny the authorization to use FCC equipment for 
certain scanning receivers that may be capable of unauthorized 
interception of communication transmissions. Based on 
information from the FCC, we estimate that these regulations 
would cost less than $500,000 to promulgate, assuming 
appropriation of the necessary amounts. Furthermore, under 
current law the FCC is authorized to collect fees from the 
telecommunications industry sufficient to offset the cost of 
its regulatory program. Therefore, CBO estimates the net 
budgetary effect of this provision would be negligible over 
time.
    The bill also would amend the Communications Act of 1934 to 
impose criminal penalties for intercepting, publishing, or 
divulging a communication that is not authorized. CBO estimates 
that this provision would have a negligible effect on revenues. 
The bill would direct the FCC to investigate alleged violations 
of this portion of the act and to enforce this provision 
through forfeiture penalties. Under current law, any 
enforcement costs that the agency incurs are offset by fees 
charged to the industries that the FCC regulates. As a result, 
we estimate this provision would not result in any significant 
net cost to the federal government.
    H.R. 2369 would impose a new private-sector mandate, as 
defined by UMRA, on manufacturers, importers, sellers, and 
those who modify scanning receivers. The bill would expand the 
FCC's criteria for authorizing equipment. Based on information 
provided by the leading manufacturer of scanning receivers and 
the FCC, CBO estimates that the direct cost of complying with 
H.R. 2369 would fall well below the statutory threshold for 
private-sector mandates ($100 million in 1996, adjusted 
annually for inflation).
    The CBO staff contacts for this estimate are: Kim Cawley 
for federal costs, Alyssa Trzeszkowski for revenues, and Jean 
Wooster for private sector mandates. This estimate was approved 
by Paul N. Van de Water, Assistant Director for Budget 
Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

                         Section 1. Short Title

    Section 1 designates the short title of the bill as the 
``Wireless Privacy Enhancement Act of 1998.''

        Section 2. Commerce in Electronic Eavesdropping Devices

    Section 2(a) extends the prohibition in section 302(b) of 
the Communications Act of 1934 to ``modifying'' scanning 
devices. While the Committee believes that ``modifying'' is 
already covered by the prohibition against ``manufacturing'' 
noncomplying scanners, it has decided to make the manufacturing 
prohibition explicit to prevent any misreading of the statute. 
By this subsection, the Committee does not intend to prohibit 
amateurs from modifying linear amplifiers after purchase, as 
permitted by Commission rules, to allow the devices to operate 
in the amateur 12-meter and 10-meter bands. Nor does the 
Committee intend for Section 2(a) to prohibit amateurs from 
building or modifying one amplifier per year to enable this 
capability, as also permitted by Commission rules. Likewise, 
the Committee does not intend for Section 2 to be interpreted 
in a manner that would permit the Commission to take actions 
against an amateur operator who is operating within the terms 
of his or her license.
    Nor does the Committee intend for Section 2(a) to be 
interpreted in a manner that would discourage manufacturers or 
dealers of amateur equipment from providing amateur licensees 
with information about permissible modifications of 
transceivers to enable them to transmit and receive on Military 
Affiliate Radio Service and the Civil Air Patrol, to the extent 
such transmission and reception is permissible under 18 U.S.C. 
2511(g) or other statutes. The Committee expects that the new 
regulations required under Section 2 will preserve the ability 
of amateurs to modify transceivers for the legitimate purposes 
discussed above.
    Section 2(b) makes amendments to section 302(d) of the 
Communications Act of 1934. Section 2(b) amends section 
302(d)(1) to expand its scope to cover new communications 
technologies such as personal communications services (PCS) and 
protected specialized mobile radio and paging services. It also 
requires the Commission to deny equipment authorization to 
scanners that are capable of being equipped with certain 
decoders. By this language, the Committee does not intend to 
hamper the inclusion of consumer-friendly features on radio 
scanners such as external audio jacks. The Committee intends 
manufacturers to design scanners with ports that the 
manufacturer does not anticipate can be used: (1) to equip the 
scanner with a decoder that can convert digital cellular, 
personal communications services, or protected specialized 
mobile radio services to analog voice audio; (2) to convert 
protected paging services to alphanumeric text; or (3) to 
otherwise decrypt radio transmissions for the purposes of 
unauthorized interception. Thus, after the enactment of the 
Wireless Privacy Enhancement Act, manufacturers will be under 
an obligation to design scanners with consumer-friendly 
features that the manufacturer does not anticipate can be used 
to equip such scanners with prohibited decoders.
    The Committee notes that nothing in this bill is intended 
to impede the development and deployment of scanning receivers 
designed as an integral part of a licensed wireless 
communications station or wireless communications system, or 
designed as communications test equipment not available to the 
general public.
    Section 2(b) amends and replaces section 302(d)(2) of the 
Communications Act of 1934 with a new provision providing the 
Commission with the authority to prescribe rules to enhance the 
privacy of users of frequencies shared by commercial services 
and the public safety community. Section 2(b) also adds a new 
section 302(d)(3) that requires that the Commission consider 
requiring that scanning receivers be manufactured in a manner 
that prevents any tampering or alteration by the user that 
would permit the device to be used unlawfully for interception 
or divulgence of radio communications. By this provision, the 
Committee intends that the order adopting the regulations 
reflect on the record a discussion of possible means for 
manufacturers to prevent tampering or alteration of scanners 
for such illegal use. New section 302(d)(4) requires the 
Commission to consider requiring scanning manufacturers to 
include warning labels on scanners notifying users of 
prohibited uses. The Committee, likewise, intends that the 
order adopting the regulations reflect on the record a 
discussion of the benefits of warning labels. New section 
302(d)(5) adds a definition of ``protected'' to the statute to 
be used in conjunction with the amendments made by this bill to 
section 302(d)(1).
    Section 2(b) recognizes that some frequencies available for 
commercial mobile services are shared with public safety and 
other private wireless users. Again, nothing in this 
legislation is intended to impede the development and 
deployment of scanning receivers designed as an integral part of a 
licensed wireless communications station or wireless communications 
system, or designed as communications test equipment not available to 
the general public.
    Section 2(c) requires the Commission to revise its rules, 
within 90 days, to implement the changes made by section 2. For 
purposes of Section 2(b) and the implementing regulations 
required by section 2(c), the Committee expects that the 
Commission will provide an effective date to the regulations 
that will provide an adequate transition period for scanner 
manufacturers to comply, so that scanner manufacturers or 
distributors are able to sell their current inventory. The 
Committee, therefore, expects the Commission to reflect on the 
record of the rulemaking required by Section 2, as is its 
practice, a discussion of the manufacturers' normal product 
development and production cycles in determining effective 
dates for the relevant requirements within the regulations, 
while bearing in mind the overall purpose of the bill to 
increase the privacy of wireless users. The Committee expects 
the Commission to promulgate regulations under Section 2(d)(2) 
which ensure that any privacy enhancement measures resulting 
from such regulations do not interfere with or impede the 
otherwise normal and proper use of radio scanners for reception 
of public safety and other allowed frequencies under law.

 Section 3. Unauthorized Interception or Publication of Communications

    Section 3(a) makes amendments to section 705 of the 
Communications Act of 1934. Section 3(a)(1) alters the heading 
provided to section 705. Section 3(a)(2) strikes ``except as 
authorized by chapter 119, title 18, United States Code'' from 
the first sentence of section 705(a) of the Communications Act. 
This is later addressed by section 3(a)(4).
    Section 3(a)(3) eliminates the requirement that a violation 
of section 705(a) requires both interception and divulgence. 
The bill separates this provision into intentional interception 
or divulgence and, thus, the intentional interception itself is 
illegal.
    Section 3(a)(4) preserves the authorization of certain 
interceptions or disclosures provided in Chapter 119 of Title 
18. That chapter governs wire and electronic communications 
interception and interception of oral communications. Section 
2511 of that chapter provides a number of exceptions to the 
chapter's prohibitions on interception. The majority of these 
exceptions relate to government interception. However, section 
2511(g) provides a number of broad exceptions for the 
interception by private parties of radio communications, 
including those that are transmitted: (a) over a system that is 
configured for ready access by the general public; (b) by any 
station for the use of the general public, or that relates to 
ships, aircraft, vehicles, or persons in distress; (c) by any 
governmental, law enforcement, civil defense, private land 
mobile, or public safety communications system that is readily 
accessible to the general public; (d) by a station operating in 
the amateur, citizens band (CB); and (e) by any marine or 
aeronautical communications system.
    Because the Committee preserved the Chapter 119 exceptions 
in its amendment of section 705(a) of the Communications Act, 
the Committee does not intend for the Commission or any other 
enforcement agency to investigate or fine parties for the 
interceptions authorized by Chapter 119. Therefore, the 
Committee does not intend for uses of scanning receivers and 
receiving radios such as short-wave radios, that are consistent 
with the section 2511(g) exceptions to be investigated or fined 
under section 705(a).
    Section 3(a)(5) increases the penalties for violating 
section 705(a) to be consistent with those under ECPA, relating 
to the interception or divulgence prohibition. Currently, the 
fine for willful violation is $2,000, 6 months in jail, or 
both; under ECPA, the penalties can be increased based upon 
repeated violations. Section 3(a)(5), therefore, provides an 
additional penalty option.
    Paragraphs (6) and (7) make appropriate changes to section 
705(e)(3) and (4) to be consistent with the changes made by 
section 3(a)(3) of the bill.
    Paragraph (8) adds a new section 705(e)(7) to the 
Communications Act that would require the FCC to investigate 
and take action, notwithstanding any other investigations by 
other agencies or departments, on possible violations of the 
Communications Act or Commission rules on wireless 
communications privacy. With regards to the responsibility for 
enforcement under this paragraph, the Committee does not intend 
to preclude the Department of Justice or the Federal Bureau of 
Investigation from initiating and conducting separate or 
parallel investigations of allegations of violations of Chapter 
119 of Title 18 of the United States Code.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                       COMMUNICATIONS ACT OF 1934

          * * * * * * *

                TITLE III--PROVISIONS RELATING TO RADIO

                       PART I--GENERAL PROVISIONS

          * * * * * * *

SEC. 302. DEVICES WHICH INTERFERE WITH RADIO RECEPTION.

  (a) * * *
  (b) No person shall manufacture, import, sell, offer for 
sale, or ship devices or home electronic equipment and systems, 
or use devices, which fail to comply with regulations 
promulgated pursuant to this section, or modify any such 
device, equipment, or system in any manner that causes such 
device, equipment, or system to fail to comply with such 
regulations.
          * * * * * * *
  [(d)(1) Within 180 days after the date of enactment of this 
subsection, the Commission shall prescribe and make effective 
regulations denying equipment authorization (under part 15 of 
title 47, Code of Federal Regulations, or any other part of 
that title) for any scanning receiver that is capable of--
          [(A) receiving transmissions in the frequencies 
        allocated to the domestic cellular radio 
        telecommunications service,
          [(B) readily being altered by the user to receive 
        transmissions in such frequencies, or
          [(C) being equipped with decoders that convert 
        digital cellular transmissions to analog voice audio.
  [(2) Beginning 1 year after the effective date of the 
regulations adopted pursuant to paragraph (1), no receiver 
having the capabilities described in subparagraph (A), (B), or 
(C) of paragraph (1), as such capabilities are defined in such 
regulations, shall be manufactured in the United States or 
imported for use in the United States.]
  (d) Equipment Authorization Regulations.--
          (1) Privacy protections required.--The Commission 
        shall prescribe regulations, and review and revise such 
        regulations as necessary in response to subsequent 
        changes in technology or behavior, denying equipment 
        authorization (under part 15 of title 47, Code of 
        Federal Regulations, or any other part of that title) 
        for any scanning receiver that is capable of--
                  (A) receiving transmissions in the 
                frequencies that are allocated to the domestic 
                cellular radio telecommunications service or 
                the personal communications service;
                  (B) readily being altered to receive 
                transmissions in such frequencies;
                  (C) being equipped with decoders that--
                          (i) convert digital domestic cellular 
                        radio telecommunications service, 
                        personal communications service, or 
                        protected specialized mobile radio 
                        service transmissions to analog voice 
                        audio; or
                          (ii) convert protected paging service 
                        transmissions to alphanumeric text; or
                  (D) being equipped with devices that 
                otherwise decode encrypted radio transmissions 
                for the purposes of unauthorized interception.
          (2) Privacy protections for shared frequencies.--The 
        Commission shall, with respect to scanning receivers 
        capable of receiving transmissions in frequencies that 
        are used by commercial mobile services and that are 
        shared by public safety users, examine methods, and may 
        prescribe such regulations as may be necessary, to 
        enhance the privacy of users of such frequencies.
          (3) Tampering prevention.--In prescribing regulations 
        pursuant to paragraph (1), the Commission shall 
        consider defining ``capable of readily being altered'' 
        to require scanning receivers to be manufactured in a 
        manner that effectively precludes alteration of 
        equipment features and functions as necessary to 
        prevent commerce in devices that may be used unlawfully 
        to intercept or divulge radio communication.
          (4) Warning labels.--In prescribing regulations under 
        paragraph (1), the Commission shall consider requiring 
        labels on scanning receivers warning of the 
        prohibitions in Federal law on intentionally 
        intercepting or divulging radio communications.
          (5) Definitions.--As used in this subsection, the 
        term ``protected'' means secured by an electronic 
        method that is not published or disclosed except to 
        authorized users, as further defined by Commission 
        regulation.
          * * * * * * *

                  TITLE VII--MISCELLANEOUS PROVISIONS

          * * * * * * *

SEC. 705. UNAUTHORIZED INTERCEPTION OR PUBLICATION OF COMMUNICATIONS.

  (a) [Except as authorized by chapter 119, title 18, United 
States Code, no person] No person receiving, assisting in 
receiving, transmitting, or assisting in transmitting, any 
interstate or foreign communication by wire or radio shall 
divulge or publish the existence, contents, substance, purport, 
effect, or meaning thereof, except through authorized channels 
of transmission or reception, (1)to any person other than the 
addressee, his agent, or attorney, (2) to a person employed or 
authorized to forward such communication to its destination, (3) to 
proper accounting or distributing officers of the various communicating 
centers over which the communication may be passed, (4) to the master 
of a ship under whom he is serving, (5) in response to a subpena issued 
by a court of competent jurisdiction, or (6) on demand of other lawful 
authority. No person not being authorized by the sender shall 
intentionally intercept any radio communication [and] or divulge or 
publish the existence, contents, substance, purport, effect, or meaning 
of such intercepted communication to any person. No person not being 
entitled thereto shall receive or assist in receiving any interstate or 
foreign communication by radio and use such communication (or any 
information therein contained) for his own benefit or for the benefit 
of another not entitled thereto. No person having received any 
intercepted radio communication or having become acquainted with the 
contents, substance, purport, effect, or meaning of such communication 
(or any part thereof) knowing that such communication was intercepted, 
shall divulge or publish the existence, contents, substance, purport, 
effect, or meaning of such communication (or any part thereof) or use 
such communication (or any information therein contained) for his own 
benefit or for the benefit of another not entitled thereto. [This 
section shall not apply to the receiving, divulging, publishing, or 
utilizing the contents of any radio communication which is transmitted 
by any station for the use of the general public, which relates to 
ships, aircraft, vehicles, or persons in distress, or which is 
transmitted by an amateur radio station operator or by a citizens band 
radio operator.] Nothing in this subsection prohibits an interception 
or disclosure of a communication as authorized by chapter 119 of title 
18, United States Code.
          * * * * * * *
  (e)(1) Any person who willfully violates subsection (a) shall 
be [fined not more than $2,000 or] imprisoned for not more than 
6 months, or fined under title 18, United States Code, or both.
          * * * * * * *
  (3)(A) Any person aggrieved by [any violation] any receipt, 
interception, divulgence, publication, or utilization of any 
communication in violation of subsection (a) or paragraph (4) 
of this subsection may bring a civil action in a United States 
district court or in any other court of competent jurisdiction.
          * * * * * * *
  (4) Any person who manufactures, assembles, modifies, 
imports, exports, sells, or distributes any electronic, 
mechanical, or other device or equipment, knowing or having 
reason to know that the device or equipment is primarily of 
assistance in the unauthorized decryption of satellite cable 
programming, or direct-to-home satellite services, or is 
intended for [any other activity prohibited by subsection (a)] 
any receipt, interception, divulgence, publication, or 
utilization of any communication in violation of subsection 
(a), shall be fined not more than $500,000 for each violation, 
or imprisoned for not more than 5 years for each violation, or 
both. For purposes of all penalties and remedies established 
for violations of this paragraph, the prohibited activity 
established herein as it applies to each such device shall be 
deemed a separate violation.
          * * * * * * *
  (7) Notwithstanding any other investigative or enforcement 
activities of any other Federal agency, the Commission shall 
investigate alleged violations of this section and may proceed 
to initiate action under section 503 of this Act to impose 
forfeiture penalties with respect to such violation upon 
conclusion of the Commission's investigation.