When AT&T Profits Off Government Snooping, Shouldn't We Be Blaming the Government?

If we're not willing to rein in law enforcement, why should a telecom company?


John Angelillo/UPI/Newscom

It is easy to forget that Americans had actually been clued in to the likelihood of domestic telecommunication surveillance by the National Security Agency (NSA) long before Edward Snowden's leaks. Snowden helped us understand the massive scope and many particulars about which we were unaware and really put the issue before the public in a way we hadn't seen before.

But have we all forgotten Room 641A? That was the room in San Francisco where telecommunications company AT&T set up a system for the NSA to access the company's internet traffic for surveillance. It was exposed by the Electronic Frontier Foundation and a former AT&T technician all the way back in 2006, years before Snowden's leaks.

That background is relevant again as The Daily Beast has a story that puts AT&T's cooperation with federal authorities with surveillance in a whole new light. The reason why AT&T has been so helpful to the government in providing data about its customers (or anybody who communicates with their customers) is because it has found a way to monetize it. The Hemisphere Project was first revealed in 2013 by The New York Times. Hemisphere was a database system provided by AT&T to help law enforcement officials access data from any call that passes through their system (which means not just their own customers). This data was then used by the government for drug busts.

In order to participate in the program, government agencies were required by the contract to keep the existence of Hemisphere a secret and not reference it in any government document. This was not unlike the contracts we have been seeing from law enforcement agencies using "Stingray" devices used to track mobile phones. It's where we learned about "parallel construction," where law enforcement agencies kept this information they had received from surveillance secret, but used it to create a second chain of evidence that could be introduced in court cases. The Times story from 2013 mentioned that government paid AT&T for access to Hemisphere (and even for AT&T employees to embed with drug-fighting units to assist them), but the Times didn't know the cost.

Kenneth Lipp from The Daily Beast provides that information today, along with news that the Hemisphere program was not just for fighting drugs. It's being used to fight all kinds of crime. And while the government can force telecommunications companies like AT&T to provide data about users with a subpoena, it appears AT&T took this all to the next level, turning it all into a program that can be marketed, and more importantly, sold to law enforcement agencies. They found a way to make money off government demands for data. And if you think the prices were modest, you obviously know nothing about government contracts:

Sheriff and police departments pay from $100,000 to upward of $1 million a year or more for Hemisphere access. Harris County, Texas, home to Houston, made its inaugural payment to AT&T of $77,924 in 2007, according to a contract reviewed by The Daily Beast. Four years later, the county's Hemisphere bill had increased more than tenfold to $940,000.

"Did you see that movie Field of Dreams?" [American Civil Liberties Union tech policy analyst Christopher] Soghoian asked. "It's like that line, 'if you build it, they will come.' Once a company creates a huge surveillance apparatus like this and provides it to law enforcement, they then have to provide it whenever the government asks. They've developed this massive program and of course they're going to sell it to as many people as possible."

This reporting hits AT&T at a time when they're trying to plan a merger with Time Warner. There's a thought, one supposes, that this either might or should hurt AT&T's chances there, but given that this program is in full cooperation with the very federal government that has authority to approve or deny the merger, it seems unlikely that whether this particular behavior is "good for the consumer" is going to influence the Department of Justice's decision whether to intervene.

On the one hand, this certainly makes it appear as though AT&T has little concern about its customers' privacy. On the other hand, AT&T has no choice but to cooperate when it receives subpoenas from law enforcement anyway. That's the problem with the current legal interpretation of the Fourth Amendment that data held by third parties (like telecom and internet companies) doesn't require warrants to access but simple subpoenas. As requests for data from law enforcement officials have skyrocketed, it would be eminently logical for a company like AT&T to create a program to make it easier for themselves to comply with the parade of government orders. And to find a way to make money off these demands, well it's preferable to seeing companies actually lose revenue due to the costs of complying with these subpoenas.

In all, it feels a bit like people want to hold AT&T accountable for not more powerfully resisting the surveillance and data-collecting authority of our own government. In that, it's reminiscent of a situation earlier in October where the ACLU was demanding social media companies be more accountable for how law enforcement uses its tools to engage in surveillance. I noted then: "It feels like an acknowledgment that we cannot expect our police to respect our privacy and we can't expect that they will be held accountable for violations. Instead the ACLU is demanding that these companies employ more resources, both human and technological, to keep authorities at bay."

The same holds true here. Obviously there's something creepy about AT&T turning law enforcement demands for our data into an opportunity to earn money. But given the kinds of pressure and intimidation the federal government has brought to bear against these companies in order to force cooperation, consider what options AT&T actually had. Remember Lavabit? Remember Qwest? AT&T is essentially the company the federal government made it become. Imagine them trying to get permission for this merger with Time Warner if they hadn't been so cooperative with the federal government with surveillance.

And that capitulation is a reminder here about who is calling the shots. The government will not be considering this merger on the basis of whether it serves the "consumer interest," though certainly that's what we'll be told. The merger will be decided on the basis on whether it's in the government's interest. AT&T at least understands that.