Psst! The FBI Is Having Trouble on the Line

The FBI is aware of the massive technological blind spot that allows criminals and terrorists to communicate undetected on American soil. But so far, it can't figure out what to do about VOIP--short for voice over Internet protocol, the dirt-cheap phone service that lets users make calls via their cable or DSL modems. Law-enforcement snoops can't tap into conversations or identify the location of callers, even with court orders authorizing surveillance. Given that the number of Internet phone users is expected to triple this year, to 2.8 million, the Federal Communications Commission (FCC) last week responded to a petition from the FBI and other agencies by requiring most VOIP providers to install within 18 months software that allows authorized law enforcement to wiretap conversations. Industry leader Vonage, which controls a majority of the VOIP market, is on track to enable such wiretaps by the end of the year, a process it started before the government ruling. "From our standpoint," says Vonage senior V.P. Brooke Schulz, "it is an important thing to do and a right thing to do."

But gaps remain. The FCC ruling does not apply to peer-to-peer calls made between two computers without a third-party provider. And the FCC has yet to resolve the issue of identifying the location of callers using VOIP. A Justice Department spokesman praised the FCC's announcement as an "important first step" but asked for "prompt action on the remaining issues." --By Brian Bennett