Federal Bureau of Investigation's
Implementation of the Communications Assistance
for Law Enforcement Act
00-10
March 2000

The Office of the Inspector General completed an audit of the implementation of the Communications Assistance for Law Enforcement Act (CALEA) by the Federal Bureau of Investigation (FBI). We are required by CALEA to report to Congress by April 1, 2000, on the equipment, facilities, and services that have been modified to comply with CALEA; and whether FBI payments to telecommunications carriers (carriers) for modifications are reasonable and cost effective.

Congress enacted CALEA to ensure that law enforcement agencies, when authorized by court order, had the ability to intercept electronic communications. The CALEA provides that carriers may be reimbursed for costs associated with equipment modifications to meet capability and current and future capacity requirements. The Department of Justice may reimburse the carriers for the modifications from the $500 million authorized by CALEA, subject to congressional appropriations and the availability of funds.

The FBI entered into two agreements with a manufacturer (Nortel) and certain carriers to permit carriers to use the CALEA solution developed by Nortel for its equipment under the right-to-use (RTU) licenses. Pursuant to these agreements, the FBI negotiated a price of $101.8 million for the RTU licenses for all carriers in the United States that use Nortel equipment.

The FBI entered into these agreements on the basis of an analysis set forth in a document entitled: Determination and Findings Regarding the Implementation of the Communications Assistance for Law Enforcement Act (D&F). The FBI produced this document to present its determination of the reasonableness of cost associated with these agreements. The FBI prepared the D&F because it was unable to determine the reasonableness of the cost of the RTU licenses through traditional means. The information provided by the FBI did not provide a basis for us to determine the reasonableness of the cost incurred for the RTU licenses. Accordingly, we offer no opinion on the reasonableness of the costs for the RTU licenses.