This is nothing new for the communications industry -- cellular and other phone providers must already meet similar requirements -- but reaching a resolution with the satellite phone industry poses greater technical and bureaucratic challenges.
Instead of relying on ground-based relay devices as cellular phones do, satellite phones shuttle messages through space, allowing service to reach virtually any location in the world. This means that service to an entire continent can be provided with only a few ground stations, called gateways.
The satellite communications provider Globalstar, for instance, set to begin service in September, plans to provide service in the northern U.S. with two gateways in Canada.
To a user, this might sound efficient. But to the FBI, it's a security nightmare.
The U.S. does not want to have to go through a foreign government, even an ally's, to tap into conversations happening on American soil, according to a law enforcement official.
"It would be imprudent," the official said, "to allow for a situation to be created where criminals and terrorists can use commercially available services .. at the same time when those services don't address the public safety needs of law enforcement."
Also, the U.S. would have a more difficult time guarding against foreigners snooping in on American calls, the official said.
Those concerns have led the FBI to intervene as the incipient industry seeks permission to operate in the U.S.
In a letter dated February 9, 1998, FBI Assistant Director in Charge John F. Lewis, Jr. requested that the Federal Communications Commission reconsider its licensing of Iridium North America, local partner of Iridium LLC, the first operating satellite communications service provider.
Iridium had considered operating part of its North American service through a gateway in Canada.
"We request that the Commission, in deference to the Executive Branch, give due weight to the national security, law enforcement, and public safety concerns raised," the letter said, "and modify the license to prohibit the placement of INA network components outside the jurisdiction of the United States which handle U.S. telecommunication services."
Iridium, which continues to operate its service, said through a spokeswoman that they no longer plan to use a Canadian gateway, and that their service complies with, and was designed to comply with, U.S. wiretapping laws.
And the Canadian company TMI Communications has yet to be approved for service in the U.S., in part because they plan to provide service to the U.S. using Canada-based gateways.
The U.S. continues to negotiate with satellite communication providers on issues of national security.
"We are in negotiations with various satellite companies and are hopeful that we'll able to work something out with them," said Department of Justice spokeswoman Deborah Weireman.
Globalstar, a Loral-backed satellite phone company planning to operate two gateways in Canada, says it is in discussions with the FBI, but that those discussions are routine and unthreatening. International communications providers generally must obtain approval from the authorities in each of the countries in which it plans to operate.
"The FBI has said they have no desire to shut down Globalstar," spokesman Mac Jeffery said.
Of course, it's the FCC, not the FBI, which decides whether to license the companies. And the FCC's own rules have little to say about eavesdropping capabilities.
"Ultimately, if the FBI is unhappy they can take criminal action. The carriers on their part have the option of developing an industry-wide standard," an FCC official said.
But the FBI insists that the companies must follow the wiretap rules enacted by Congress.
In 1994, Congress passed the Communications Assistance for Law Enforcement Act, which the FBI says requires communication providers to make it possible to eavesdrop on calls and to determine the location of service users.
Another FCC official said the Commission would seriously consider national security concerns.
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