Bloomberg News

NSA to No Longer Keep Phone Call Records Under Obama Plan

January 17, 2014

NSA to Halt Collection of Mass Phone Records Under Obama Plan

Protesters dressed as President Barack Obama and an National Security Agency agent rally in front of the U.S. Capitol on Oct. 26, 2013 in Washington, D.C. Photographer: Allison Shelley/Getty Images

President Barack Obama will order an end to government storage of bulk phone records as it now exists under a revamp of U.S. surveillance activities he’ll announce today, an administration official said.

Obama will also take immediate steps to require a judicial finding before the National Security Agency can access existing records in a program under which it has been gathering and storing millions of phone records of Americans for years.

The president will announce the changes in a Washington speech marking his long-anticipated response to the global uproar set off by the disclosure of U.S. spy programs by former contractor Edward Snowden. While restraints on the phone-records program may be applauded by privacy and civil rights advocates, Obama will leave to Congress and a review panel to develop details about how phone records and Internet data are collected, stored and disclosed, according to people familiar with the president’s plans.

The move is “an attempt to address the concerns that the government holds and accesses too much data, but in many ways, he is leaving the details and mechanics of this to the attorney general and Congress to resolve,” said Juan Zarate, a counter-terrorism adviser to former President George W. Bush and now a senior adviser with the Center for Strategic and International Studies in Washington.

Obama, a former constitutional law professor and critic of President George W. Bush’s spy policies, is weighing civil liberties against warnings that relaxing policies to thwart terrorism might put the country at risk. The data collection programs came in response to the Sept. 11, 2001, attacks.

‘Punting’ Decisions

Obama will call for greater privacy protections for foreigners and create a public advocate to represent privacy interests before the secret court that oversees NSA spying, according to people familiar with deliberations. In addition, he will recommend that a panel look at government’s data-gathering impact on privacy and commercial interests.

“They’re going to punt,” James Lewis, a senior fellow at the Center for Strategic and International Studies in Washington, said of Obama and his aides. “For many of the big issues, they’ll express an opinion but leave it up to congressional action,” said Lewis, one of dozens of technology and privacy experts involved in the discussions for months.

The requirement for court orders ahead of querying the phone database as it currently exists will “no doubt slow or temper analysts’ ability to connect the dots,” Zarate said.

A White House advisory panel appointed by Obama recommended last month that the NSA not collect and hold bulk phone records and instead get an order from the secret court overseeing spy programs to access records held by phone companies or a third party.

Divided Congress

It remains to be seen if the administration will seek to place a mandate on phone companies, such as Verizon Communications Inc. (VZ:US) and AT&T Inc. (T:US), to retain data for a certain number of years and under a format that makes it easy to search. For now, the carriers have escaped any such mandate.

Attorney General Eric Holder will work with intelligence officials on how to sustain surveillance capabilities and report their findings to the president before the program comes up for reauthorization before a secret court on March 28.

The changes, along with other proposals, probably require legislation, which might not get through a divided Congress.

Senator Dianne Feinstein, a California Democrat who heads the intelligence committee, wants the data program to continue without forcing companies to collect and keep the records. Senator Patrick Leahy, a Vermont Democrat, and Representative James Sensenbrenner, a Wisconsin Republican, have introduced legislation to bar the NSA from collecting the phone records, as has Senator Rand Paul, a Kentucky Republican.

Economic Impact

A third party that could store the data doesn’t yet exist. An administration official familiar with the president’s thinking said Congress would have to enact legislation that would enable a third-party to retain the records.

AT&T Inc. Chief Executive Officer Randall Stephenson said he was “anxiously awaiting” Obama’s plan. Speaking at a Jan. 15 event in Washington, Stephenson declined to disclose his position on keeping the records.

“At the end of the day, the data needs to be provided only pursuant to a court order or a subpoena or a warrant,” he said. “Where the data is housed probably isn’t that important, as long as the rules are clarified.”

Political Fallout

The spying exposed by Snowden has enveloped companies in an international debate about privacy and the reach of government in the post-Sept. 11 world. The impact may be costly to companies and to the U.S. economy.

The domestic and international backlash could cost the U.S. economy $22 billion to $35 billion over the next three years, said Daniel Castro, an analyst with the Information Technology and Innovation Foundation.

“Pushing this off six months, three years, can have a dramatic impact on the growth of the U.S. economy,” he said. “It may be a good political move but a bad economic one.”

Beyond the economic impact, the president’s announcement carries security, diplomatic and political implications. Corporations, foreign leaders who may have been spied on, civil libertarians and the intelligence community have been working behind the scenes to shape Obama’s decisions.

Obama also will create a panel to examine how data-collection like the NSA’s affects Internet companies and privacy rights, two people familiar with White House deliberations said yesterday. The White House declined to preview the program.

Prism Disclosure

“I think the substance of the speech is going to be holding his ground,” General Micheal Hayden, former Central Intelligence Agency chief, said in an MSNBC interview today. He said he doesn’t think U.S. intelligence agencies “are going to be doing a whole lot of things different in a week, a month, a year, than they’re doing right now.”

Snowden exposed a program called Prism under which the NSA compels Internet companies through court orders to provide customer e-mails and other Internet activity. The companies are prohibited from disclosing or discussing the orders.

Microsoft Corp. (MSFT:US), Yahoo! Inc. and Facebook Inc. (FB:US) have lobbied Obama to be able to disclose details about government orders for customer data and the number of user accounts affected.

Two panels were assigned by the administration to review government policies. Obama is pre-empting next week’s scheduled release of recommendations and legal findings by a citizen’s privacy board created by Congress and filled with the president’s picks. Obama earlier rejected one of recommendations put out last month by one of the panels to split the NSA and U.S. Cyber Command.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Chris Strohm in Washington at cstrohm1@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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