3 March 1998: Link to Declan McCullagh's Netly News article

2 March 1998
Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html

See Senate bill S.493 and prior bill HR 2460 and report

    [Congressional Record: February 26, 1998 (House)]
    [Page H636-H645]
    From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
    [DOCID:cr26fe98-65]

                       WIRELESS TELEPHONE PROTECTION ACT

      Ms. PRYCE of Ohio. Mr. Speaker, by the direction of the Committee on
    Rules, I call up House Resolution 368 and ask for its immediate
    consideration.
      The Clerk read the resolution, as follows:

                                  H. Res. 368

           Resolved, That at any time after the adoption of this
         resolution the Speaker may, pursuant to clause 1(b) of rule
         XXIII, declare the House resolved into the Committee of the
         Whole House on the state of the Union for consideration of
         the bill (H.R. 2460) to amend title 18, United States Code,
         with respect to scanning receivers and similar devices. The
         first reading of the bill shall be dispensed with. Points of
         order against consideration of the bill for failure to comply
         with clause 2(l)(6) of rule XI are waived. General debate
         shall be confined to the bill and shall not exceed one hour
         equally divided and controlled by the chairman and ranking
         minority member of the Committee on the Judiciary. After
         general debate the bill shall be considered for amendment
         under the five-minute rule. It shall be in order to consider
         as an original bill for the purpose of amendment under the
         five-minute rule the amendment in the nature of a substitute
         recommended by the Committee on the Judiciary now printed in
         the bill. Each section of the committee amendment in the
         nature of a substitute shall be considered as read. During
         consideration of the bill for amendment, the Chairman of the
         Committee of the Whole may accord priority in recognition on
         the basis of whether the Member offering an amendment has
         caused it to be printed in the portion of the Congressional
         Record designated for that purpose in clause 6 of rule XXIII.
         Amendments so printed shall be considered as read. The
         Chairman of the Committee of the Whole may: (1) postpone
         until a time during further consideration in the Committee of
         the Whole a request for a recorded vote on

    [[Page H637]]

         any amendment; and (2) reduce to five minutes the minimum
         time for electronic voting on any postponed question that
         follows another electronic vote without intervening business,
         provided that the minimum time for electronic voting on the
         first in any series of questions shall be fifteen minutes. At
         the conclusion of consideration of the bill for amendment the
         Committee shall rise and report the bill to the House with
         such amendments as may have been adopted. Any Member may
         demand a separate vote in the House on any amendment adopted
         in the Committee of the Whole to the bill or to the committee
         amendment in the nature of a substitute. The previous
         question shall be considered as ordered on the bill and
         amendments thereto to final passage without intervening
         motion except one motion to recommit with or without
         instructions.
           Sec. 2. After passage of H.R. 2460, it shall be in order to
         consider in the House S. 493. It shall be in order to move
         that the House strike all after the enacting clause of the
         Senate bill and insert in lieu thereof the provisions of H.R.
         2460 as passed by the House.

      The SPEAKER pro tempore (Mr. Tiahrt). The gentlewoman from Ohio (Ms.
    Pryce) is recognized for 1 hour.
      Ms. PRYCE of Ohio. Mr. Speaker, for purposes of debate only, I yield
    the customary 30 minutes to my good friend, the gentleman from Ohio
    (Mr. Hall), pending which I yield myself such time as I may consume.
    During consideration of this resolution, all time yielded is for the
    purpose of debate only.
      Mr. Speaker, House Resolution 368 is a fair and open rule providing
    for the consideration of H.R. 2460, the Wireless Telephone Protection
    Act.
      The rule provides for 1 hour of general debate equally divided
    between the chairman and ranking member of the Committee on the
    Judiciary. For the purposes of amendment, the rule makes in order the
    Committee on the Judiciary amendment in the nature of a substitute as
    an original bill and, under this rule, any germane amendment may be
    offered, with priority recognition given to those Members who have
    preprinted their amendments in the Congressional Record.
      In addition, the rule provides for the customary motion to recommit,
    with or without instructions.
      In order to bring this legislation to the floor today, it is
    necessary to waive clause 2(L)(6) of Rule XI, which requires a 3-day
    layover of the committee report, and this rule provides such a waiver.
      Further, to expedite consideration of H.R. 2460, the chairman of the
    committee will be permitted to postpone votes during consideration of
    the bill and reduce voting time to 5 minutes on a postponed question as
    long as it follows a 15-minute vote.
      Finally, the rule provides that upon House passage, it will be in
    order to move to insert the House language in the Senate bill number.
    This provision is included because the Senate has already passed the
    Wireless Telephone Protection Act.
      Mr. Speaker, I hope all of my colleagues will support this fair and
    open rule so that we may proceed with a thorough debate of the
    underlying legislation, which the Committee on the Judiciary reported
    favorably by voice vote.
      The goal of 2460 is straightforward. It seeks to deter cellular
    telephone fraud. As our society becomes increasingly reliant on
    cellular technology it is important that we have the tools to
    discourage and prosecute fraud in the wireless telephone industry.
      The pervasiveness of such fraud is startling. In fact, calls made
    from stolen or cloned telephones are responsible for losses to the
    industry of close to $710 million.
      The dollars lost are very significant, but perhaps more worrisome are
    the much more serious crimes which are related to cellular fraud. For
    example, it is becoming common practice for drug dealers to use cloned
    telephones to avoid detection when making calls to their sources and
    clients.
      Under current law, prosecutors must prove that a person who possessed
    or used technology to obtain unauthorized access to telecommunications
    services had the ``intent to defraud.'' But law enforcement officials
    have pointed out that this is often too hard to meet the standard and
    prove a violation of Federal law.
      H.R. 2460 responds to this legal obstacle by removing the ``intent to
    defraud'' standard, recognizing that there is no reason why any person
    not working in the wireless telephone industry or in law enforcement
    would need such high-tech equipment unless they are intending to use it
    to clone cellular telephones. This change in the law will enable the
    government to successfully prosecute and punish the fraudulent use of
    cellular technology.
      Another provision of H.R. 2460 will clean up existing law by
    clarifying the penalties which may be imposed for cellular telephone
    fraud, allowing for a 15-year maximum penalty for violations.
      Mr. Speaker, the gentleman from Florida (Mr. McCollum), the chairman
    of the Subcommittee on Crime, explained to the Committee on Rules that
    this legislation is not controversial; and he requested that the
    legislation be considered under an open rule so that any Member who may
    be uncomfortable with the bill will have the opportunity to amend it.
      The Committee on Rules was pleased to honor that request. In fact,
    the rule was reported out of committee by voice vote without dissent.
      So I urge my colleagues to support a free and fair debate on the
    Wireless Telephone Protection Act by voting ``yes'' on this rule.
      Mr. Speaker, I reserve the balance of my time.
      (Mr. HALL of Ohio asked and was given permission to revise and extend
    his remarks.)
      Mr. HALL of Ohio. Mr. Speaker, I yield myself such time as I may
    consume, and I want to thank my colleague, the gentlewoman from Ohio
    (Ms. Pryce) for yielding me this time.
      This is an open rule. It will allow for full and fair debate.
      As my colleague just described, this rule provides for 1 hour of
    general debate, equally divided and controlled by the chairman and
    ranking minority member of the Committee on the Judiciary. Under this
    rule, amendments will be allowed under the 5-minute rule. This is the
    normal amending process in the House. All Members on both sides of the
    aisle will have the opportunity to offer amendments.
      Fraud involving cellular telephones is a significant criminal problem
    in this country. Cell phone fraud is often linked to other, more
    serious crimes when criminals use illegal phones to avoid detection of
    their activities.
      This measure will make it easier to obtain convictions against
    criminals involved in cell phone fraud. It is a bipartisan bill with
    support on both sides of the aisle. The Committee on Rules approved
    this by a voice vote, and I urge adoption of the rule.
      Ms. PRYCE of Ohio. Mr. Speaker, I have no further requests for time,
    and I yield back the balance of my time.
      Mr. HALL of Ohio. Mr. Speaker, I have no further requests for time,
    and I yield back the balance of my time.
      Ms. PRYCE of Ohio. Mr. Speaker, I move the previous question on the
    resolution.
      The previous question was ordered.
      The resolution was agreed to.
      A motion to reconsider was laid on the table.
      The SPEAKER pro tempore. Pursuant to House Resolution 368 and rule
    XXIII, the Chair declares the House in the Committee of the Whole House
    on the State of the Union for consideration of the bill, H.R. 2460.

                                  {time}  1040

                         In the Committee of the Whole

      Accordingly, the House resolved itself into the Committee of the
    Whole House on the State of the Union for the consideration of the bill
    (H.R. 2460) to amend title 18, United States Code, with respect to
    scanning receivers and similar devices, with Mr. Collins in the chair.
      The Clerk read the title of the bill.
      The CHAIRMAN. Pursuant to the rule, the bill is considered as having
    been read the first time.
      Under the rule, the gentleman from Florida (Mr. McCollum) and the
    gentleman from Florida (Mr. Wexler) each will control 30 minutes.
      The Chair recognizes the gentleman from Florida (Mr. McCollum).
      Mr. McCOLLUM. Mr. Chairman, I yield myself such time as I may
    consume.
      I am pleased to rise in support of H.R. 2460, the Wireless Protection
    Act. This bill, introduced by the gentleman from Texas (Mr. Sam
    Johnson), is truly a bipartisan effort. I am proud to say that I was an
    original cosponsor of the bill, together with the gentleman from New
    York (Mr. Schumer), who is the ranking minority member of the
    Subcommittee on Crime, which I chair.

    [[Page H638]]

      This bill will close a loophole in a statute Congress passed in 1994
    to fight cellular telephone fraud.
      At a hearing before the Subcommittee on Crime last year, witnesses
    from both the wireless industry and law enforcement testified that
    cellular telephone fraud is a significant criminal activity in the
    United States. In 1996, the wireless telephone industry lost over $700
    million in revenue as a result of calls made from stolen or cloned
    phones.
      As important as that loss is, it is important that Members bear in
    mind that criminals often use these illegal telephones as a means to
    evade detection while they plan and commit other crimes. This
    phenomenon is most prevalent in drug crimes, where criminals frequently
    use several cloned phones in a day, or routinely switch from one cloned
    phone to another each day in order to evade detection.
      In 1994, Congress amended section 1029 of Title 18 to make it a crime
    to knowingly and with intent to defraud possess hardware or software
    configured to clone wireless telephones. However, law enforcement
    officials have testified before the Subcommittee on Crime that it is
    often impossible to prove the intent to defraud element of this
    section.
      Even in the most common case, law enforcement officials will arrest
    criminals for other crimes and find the telephone cloning equipment in
    the possession of the criminals, which has been, of course, used to
    make the cloned phones. However, they do so without finding specific
    evidence that the criminals intended to use this equipment to clone the
    wireless telephones; and if they do not find that evidence, law
    enforcement officials often have been thwarted in proving a violation
    of this statute.
      Because there is no legitimate reason why an ordinary person would
    possess this equipment, there is no doubt that the intent of these
    criminals was to use that equipment to clone cellular phones. In order
    to remedy this problem, H.R. 2460 amends section 1029 to eliminate the
    ``intent to defraud'' requirement concerning the possession of this
    equipment.
      In order to ensure that telecommunications company employees may
    continue to use these devices, however, the bill provides that it is
    not a violation of the amended statute for an officer, employee or
    agent of a facilities-based carrier to use, produce, have custody or
    control of or possess the hardware or software described in that
    subsection if they are doing it for the purpose of protecting the
    property or legal rights of that carrier.

                                  {time}  1045

      The bill provides a definition of facilities-based carrier to make it
    clear to whom the exception applies. The bill also clarifies the
    penalties which may be imposed for violations of section 1029. Under
    existing law, violations of some subsections of this statute are
    subject to two different maximum penalties. The bill deletes this
    duplicative language and restates the entire punishment section of 1029
    to more clearly state the maximum punishments for each possible
    violation of that section. Finally, the bill directs the United States
    Sentencing Commission to review and, if appropriate, amend its
    guidelines and policy statements so as to provide an appropriate
    penalty for each of the offenses involving the cloning of wireless
    telephones.
      Mr. Chairman, I would like to again reiterate the thrust of this
    bill. It is to provide for a situation where we can gain more
    prosecutions successfully, gain more convictions of those who are out
    there cloning telephones. The idea is that if one has this telephone
    cloning equipment, there is no possible earthly reason for him to have
    it unless he has got it there to clone phones. The only people who
    should have that equipment are the folks who are the manufacturers, the
    people who are in the telephone equipment company business who are
    professionals designed to have it. Therefore, in order to gain these
    convictions, since proving the intent to clone is not something that we
    have been able to do, we are making it in this case a criminal
    violation to possess in essence this equipment without having to prove
    the intent element.
      It is a very simple bill, a very important bill, because telephone
    cloning is a very big business in this country and it involves a lot of
    criminal activity at all levels. Mr. Chairman, with that in mind, I
    urge the adoption of this bill.
      Mr. Chairman, I reserve the balance of my time.
      Mr. WEXLER. Mr. Chairman, I yield myself such time as I may consume.
    I rise in support of this bill and commend the gentleman from Texas
    (Mr. Sam Johnson) along with the gentleman from Florida (Mr. McCollum)
    and the gentleman from New York (Mr. Schumer), the ranking member, for
    their work on this bill.
      Mr. Chairman, cell phone cloning is the hottest new scam on the
    street. Cloning costs phone companies and their customers more than
    $650 million a year. It lets drug cartels operate in secrecy, away from
    the reach of law enforcement surveillance. Cloned cell phones are
    rapidly becoming the main communication network of drug runners and
    street gangs. The reason is that cloned phones not only allow the
    criminals to cheat the phone company, but they also evade wire taps. A
    drug dealer will often have 20 or more cloned phones, constantly
    switching among them to cover his tracks.
      The gentleman from Florida (Mr. McCollum) has already explained how
    the cloning process works. This bill will ban the copycat machines that
    criminals use to make cloned phones. These machines are freely
    advertised in magazines and on the Internet from anywhere from $1100 to
    $2500. Yet the only reason anyone would buy these devices is to defraud
    innocent consumers. Under current law, copycat machines are illegal
    only if the government can prove an intent to defraud. That is often
    impossible to prove and it permits unscrupulous manufacturers to keep
    making the machines and offering them for sale. This bill will ban the
    copycat machines outright.
      There has been one concern raised about the bill. Some cell phone
    companies are concerned that the language of the bill might
    inadvertently apply to machinery used by legitimate companies to test
    or reprogram their equipment. I understand that the gentleman from
    Florida (Mr. McCollum) will offer an amendment in the nature of a
    substitute that cures this problem. I expect to fully support the bill
    after that amendment.
      I also want to note that with the amendment, the wireless industry
    fully supports the bill. In fact, at a hearing before the Subcommittee
    on Crime, representatives from both the cell phone industry and from
    law enforcement testified about the rapid increase they are seeing in
    cloning activity and the need to take these copycat devices out of
    circulation among the general public.
      Mr. Chairman, I urge support for this bill.
      Mr. Chairman, I yield back the balance of my time.
      Mr. McCOLLUM. Mr. Chairman, I yield such time as he may consume to
    the gentleman from Texas (Mr. Sam Johnson), the author of this bill.
      (Mr. SAM JOHNSON of Texas asked and was given permission to revise
    and extend his remarks.)
      Mr. SAM JOHNSON of Texas. Mr. Chairman, I thank the gentleman from
    Florida (Mr. McCollum) for yielding me this time and for his valuable
    assistance in helping make this bill possible.
      The Wireless Telephone Protection Act is really another effort of
    ours to stop crime in this country. It is going to outlaw equipment
    which is used to steal cellular telephone numbers. For those who are
    not familiar with cellular cloning, the process is simple. Criminals
    sit in parked cars outside airports or along roadways and use special
    software and equipment to steal the electronic serial numbers from any
    person who uses a cellular phone within range. The stolen numbers are
    then programmed into other cell phones, called clones, and finally
    charges are made to the unsuspecting person's account, like me, for
    instance. My phone was cloned last year while I was standing on the
    curb at D-FW Airport, that is Dallas-Fort Worth, waiting for my wife. I
    ended up with over a $6,000 phone bill for calls that I did not make.
    There were calls made to places all over the world, including Spain,
    Colombia and Mexico. Later while I was on my phone with the telephone
    company trying to get this problem resolved, my personal phone number
    was still being used to make calls while I was talking to the phone
    company.

    [[Page H639]]

      The tactic of using stolen phone numbers is commonly employed by drug
    dealers and gang members who are trying to evade law enforcement
    wiretaps or other surveillance. It is estimated that the cellular
    industry loses about $650 million per year due to this illegal
    activity. It increases the cost to every cellular phone user in the
    country.
      I hope that as a result of this bill, we can stop this fraud and help
    keep costs down for both the industry and the consumer. Cellular phone
    use is expanding by about 40 percent per year. With this increase, the
    Secret Service has doubled the number of arrests due to fraud every
    year since 1991. I am certain our law enforcement personnel could
    prosecute more criminals, as the gentleman from Florida (Mr. McCollum)
    says, if the current law permitted it, and it does not.
      Current law requires prosecutors to prove that a criminal acted with
    the intent to defraud. This means that an officer must catch the crook
    in the act of cloning to be arrested, which is next to impossible. The
    bill removes this burden. Now criminals will be arrested for possessing
    or manufacturing the cloning equipment, which has no other purpose than
    to steal a phone number.
      I have got an advertisement here that shows how easy it is to buy
    this cloning equipment. If we look at the fine print, it states that
    the equipment is used for educational or experimental purposes. That is
    kind of false. In fact, it is against the law. According to the Secret
    Service, there is no lawful purpose to possess, produce or sell
    hardware or software used to clone a wireless telephone.
      This is good, common sense legislation that is supported on both
    sides of the aisle. As my colleagues can see here, it is also supported
    by the Department of Justice, the U.S. Secret Service, and the cellular
    wireless industry, as my colleague has already stated. Every Member of
    this House has constituents who have been the victim of cell phone
    cloning. It causes them great stress, and I can tell my colleagues when
    you get a bill for 6,000 bucks on your phone, it is a shock.
      Let me just tell Members how James Kallstrom, the former head of the
    FBI, New York office, describes phone cloners. He says, quote, they are
    hard core criminals, murderers, kidnappers, terrorists, major drug
    dealers, child pornographers and pedophiles, violent criminals who use
    technology to avoid the law. We must stop this criminal activity now.
    This bill will do it. I urge Members' support.
      Mr. McCOLLUM. Mr. Chairman, I yield such time as she may consume to
    the gentlewoman from Maryland (Mrs. Morella).
      Mrs. MORELLA. Mr. Chairman, I thank the gentleman for yielding me
    this time. I would like to engage the gentleman in a colloquy on
    cellular extension phones.
      Mr. Chairman, I understand that many cellular subscribers find it
    advantageous to have two cellular phones with the same number. In this
    way, someone trying to reach a subscriber need only dial one number and
    the subscriber will be able to receive the call on either his or her
    car phone or on his or her portable hand-held phone. I also understand
    that the FCC currently prohibits companies from altering the electronic
    serial number of a cellular phone to allow more than one phone to have
    the same telephone number, but that the commission has been asked to
    reconsider that rule. I wonder, how would this bill affect the petition
    for reconsideration of this matter that is now pending before the FCC?
      Mr. McCOLLUM. Mr. Chairman, will the gentlewoman yield?
      Mrs. MORELLA. I yield to the gentleman from Florida.
      Mr. McCOLLUM. I thank the gentlewoman for her inquiry. In passing
    H.R. 2460, we do not intend to direct the FCC to act in one way or
    another on the pending petition for reconsideration that she has
    described. If the FCC were to change its rules, however, I think it is
    important for Members to understand that even though they did change
    those rules, the bill would still prevent the use, possession,
    production, and so forth, of hardware or software to insert or modify
    electronic serial numbers or other telecommunication identifying
    information to create extension phones. If the FCC does decide that a
    change in its rules serves the public interest, I would be willing to
    consider amending section 1029 in such a way as to conform the bill to
    the spirit of the FCC's decision, yet still making sure that this
    equipment would be unlikely to fall into the hands of criminals.
      Mrs. MORELLA. Mr. Chairman, that sounds reasonable.
      Mr. McCOLLUM. Mr. Chairman, I yield such time as he may consume to
    the gentleman from Arkansas (Mr. Hutchinson), a member of the
    committee.
      Mr. HUTCHINSON. Mr. Chairman, I rise in strong support of H.R. 2460,
    the Wireless Telephone Protection Act, and commend the gentleman from
    Texas (Mr. Sam Johnson) for introducing the legislation. I also want to
    commend the leadership of the gentleman from Florida (Mr. McCollum) for
    his excellent work in behalf of this important legislation.
      We have known for some time that a significant amount of criminal
    activity in the United States involves the use of cellular telephones
    and cloned phone numbers. Each year the cellular telephone industry
    loses millions of dollars in revenue as a result of the use of cell
    phones that are being illegally cloned. But more important, the
    greatest difficulty is in the arena of law enforcement. Those people
    who are trying to put drug dealers in jail have difficulty with the
    illegal use of cloned phones. Criminals frequently clone the cell phone
    number of an unsuspecting, innocent party and then use this cloned
    number to engage in criminal activity, especially drug-related crimes.
      The process of cloning involves the use of a device which captures
    the identifying information in the telephone and a second device which
    is used to reprogram the subsequent phones. Current Federal law
    requires a prosecutor to prove that persons in possession of those
    devices had an intent to defraud. This standard is very difficult to
    meet and since these devices have no legitimate purpose except for the
    use by the telephone companies themselves, then I believe it is very
    important to remove the intent requirement and make possession itself a
    crime.
      As a parent of teenagers, very concerned about the drug culture that
    is so prominent in our society, as a former Federal prosecutor, I
    believe this is critically important in order to address the problems
    of drugs in our society and the use of cloned phones by the drug
    dealers.
      Mr. Chairman, about a year ago the Subcommittee on Crime held a
    hearing on drug interdiction efforts in the Caribbean. One of the
    issues that repeatedly resurfaced during our discussions with law
    enforcement was the problems posed by cloned cell phones. This
    legislation provides an important tool for prosecutors to use in the
    war against drugs and as such I urge my colleagues to support it.
      Mr. PAUL. Mr. Speaker, I rise today in opposition of H.R. 2460, The
    Wireless Telephone Protection Act. Setting aside the vital and relevant
    question of whether the enumerated powers and tenth amendment allow the
    federal government to make possession of electronic scanning devices
    criminal, another aspect of this bill should have met with harsh
    criticism from those who hold individual liberties in even some regard.
      Under current ``anti-cloning'' law, prosecutors must prove a
    defendant intended to use scanning equipment illegally, or have an
    ``intent'' to defraud. This bill shifts the burden of proof of
    ``innocent use'' from the prosecutor to the defendant.
      The United States Constitution prohibits this federal government from
    depriving a person of life, liberty, or property without due process of
    law. Pursuant to this constitutional provision, a criminal defendant is
    presumed to be innocent of the crime charged and, pursuant to what is
    often called ``the Winship doctrine,'' the persecution is allocated the
    burden of persuading the fact-finder of every fact necessary to
    constitute the crime . . . charged.'' The prosecution must carry this
    burden because of the immense interests at stake in a criminal
    prosecution, namely that a conviction often results in the loss of
    liberty or life (in this case, a sentence of up to ten years).
      This radical departure from the long held notion of ``innocent until
    proven guilty'' warrants opposition to this bill.
      Mr. McCOLLUM. Mr. Chairman, I have no further requests for time, and
    I yield back the balance of my time.
      The CHAIRMAN. All time for general debate has expired.
      The committee amendment in the nature of a substitute printed in the
    bill shall be considered by section as an

    [[Page H640]]

    original bill for the purpose of amendment, and pursuant to the rule
    each section is considered read.
      During consideration of the bill for amendment, the Chair may accord
    priority in recognition to a Member offering an amendment that he has
    printed in the designated place in the Congressional Record. Those
    amendments will be considered read.
      The Chairman of the Committee of the Whole may postpone a request for
    a recorded vote on any amendment and may reduce to a minimum of 5
    minutes the time for voting on any postponed question that immediately
    follows another vote, provided that the time for voting on the first
    question shall be a minimum of 15 minutes.
      The Clerk will designate section 1.
      The text of section 1 is as follows:

         SECTION 1. SHORT TITLE.

           This Act may be cited as the ``Wireless Telephone
         Protection Act''.

                                  {time}  1100

      The CHAIRMAN. Are there any amendments to section 1?
      If not, the Clerk will designate section 2.
      The text of section 2 is as follows:

         SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH
                       COUNTERFEIT ACCESS DEVICES.

           (a) Unlawful Acts.--Section 1029(a) of title 18, United
         States Code, is amended--
           (1) by redesignating paragraph (9) as paragraph (10); and
           (2) by striking paragraph (8) and inserting the following:
           ``(8) knowingly and with intent to defraud uses, produces,
         traffics in, has control or custody of, or possesses a
         scanning receiver;
           ``(9) knowingly uses, produces, traffics in, has control or
         custody of, or possesses hardware or software, knowing it has
         been configured for altering or modifying a
         telecommunications instrument so that such instrument may be
         used to obtain unauthorized access to telecommunications
         services; or''.
           (b) Penalties.--
           (1) Generally.--Section 1029(c) of title 18, United States
         Code, is amended to read as follows:
           ``(c) Penalties.--The punishment for an offense under
         subsection (a) of this section is--
           ``(1) in the case of an offense that does not occur after a
         conviction for another offense under this section--
           ``(A) if the offense is under paragraph (1), (2), (3), (6),
         (7), or (10) of subsection (a), a fine under this title or
         imprisonment for not more than 10 years, or both; and
           ``(B) if the offense is under paragraph (4), (5), (8), or
         (9), of subsection (a), a fine under this title or
         imprisonment for not more than 15 years, or both; and
           ``(2) in the case of an offense that occurs after a
         conviction for another offense under this section, a fine
         under this title or imprisonment for not more than 20 years,
         or both.''.
           (2) Attempts.--Section 1029(b)(1) of title 18, United
         States Code, is amended by striking ``punished as provided in
         subsection (c) of this section'' and inserting ``subject to
         the same penalties as those prescribed for the offense
         attempted''.
           (c) Definitions.--Section 1029(e)(8) of title 18, United
         States Code, is amended by inserting before the period ``or
         to intercept an electronic serial number, mobile
         identification number, or other identifier of any
         telecommunications service, equipment, or instrument''.
           (d) Applicability of New Section 1029(a)(9).--
           (1) In general.--Section 1029 of title 18, United States
         Code, is amended by adding at the end the following:
           ``(g) It is not a violation of subsection (a)(9) for an
         officer, employee, or agent of, or a person under contract
         with, a facilities-based carrier, for the purpose of
         protecting the property or legal rights of that carrier, to
         use, produce, have custody or control of, or possess hardware
         or software configured as described in that subsection
         (a)(9).''.
           (2) Definition.--Section 1029(e) of title 18, United States
         Code is amended--
           (A) by striking ``and'' at the end of paragraph (6);
           (B) by striking the period at the end of paragraph (7) and
         inserting a semicolon;
           (C) by striking the period at the end of paragraph (8) and
         inserting ``; and''; and
           (D) by adding at the end the following:
           ``(9) the term `facilities-based carrier' means an entity
         that owns communications transmission facilities, is
         responsible for the operation and maintenance of those
         facilities, and holds an operating license issued by the
         Federal Communications Commission under the authority of
         title III of the Communications Act of 1934.''.
           (e) Amendment of Federal Sentencing Guidelines for Wireless
         Telephone Cloning.--
           (1) In general.--Pursuant to its authority under section
         994 of title 28, United States Code, the United States
         Sentencing Commission shall review and amend the Federal
         sentencing guidelines and the policy statements of the
         Commission, if appropriate, to provide an appropriate penalty
         for offenses involving the cloning of wireless telephones
         (including offenses involving an attempt or conspiracy to
         clone a wireless telephone).
           (2) Factors for consideration.--In carrying out this
         subsection, the Commission shall consider, with respect to
         the offenses described in paragraph (1)--
           (A) the range of conduct covered by the offenses;
           (B) the existing sentences for the offenses;
           (C) the extent to which the value of the loss caused by the
         offenses (as defined in the Federal sentencing guidelines) is
         an adequate measure for establishing penalties under the
         Federal sentencing guidelines;
           (D) the extent to which sentencing enhancements within the
         Federal sentencing guidelines and the court's authority to
         sentence above the applicable guideline range are adequate to
         ensure punishment at or near the maximum penalty for the most
         egregious conduct covered by the offenses;
           (E) the extent to which the Federal sentencing guideline
         sentences for the offenses have been constrained by statutory
         maximum penalties;
           (F) the extent to which Federal sentencing guidelines for
         the offenses adequately achieve the purposes of sentencing
         set forth in section 3553(a)(2) of title 18, United States
         Code;
           (G) the relationship of Federal sentencing guidelines for
         the offenses to the Federal sentencing guidelines for other
         offenses of comparable seriousness; and
           (H) any other factor that the Commission considers to be
         appropriate.

      The CHAIRMAN. Are there any amendments to section 2?

        Amendment in the Nature of a Substitute Offered by Mr. Mc Collum

      Mr. McCOLLUM. Mr. Chairman, I offer an amendment in the nature of a
    substitute.
      The Clerk read as follows:

           Amendment in the nature of a substitute offered by Mr.
         McCollum:
           Strike all after the enacting clause and insert the
         following:

         SECTION 1. SHORT TITLE.

           This Act may be cited as the ``Wireless Telephone
         Protection Act''.

         SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH
                       COUNTERFEIT ACCESS DEVICES.

           (a) Unlawful Acts.--Section 1029(a) of title 18, United
         States Code, is amended--
           (1) by redesignating paragraph (9) as paragraph (10); and
           (2) by striking paragraph (8) and inserting the following:
           ``(8) knowingly and with intent to defraud uses, produces,
         traffics in, has control or custody of, or possesses a
         scanning receiver;
           ``(9) knowingly uses, produces, traffics in, has control or
         custody of, or possesses hardware or software, knowing it has
         been configured to insert or modify telecommunication
         identifying information associated with or contained in a
         telecommunications instrument so that such instrument may be
         used to obtain telecommunications service without
         authorization; or''.
           (b) Penalties.--
           (1) Generally.--Section 1029(c) of title 18, United States
         Code, is amended to read as follows:
           ``(c) Penalties.--
           ``(1) Generally.--The punishment for an offense under
         subsection (a) of this section is--
           ``(A) in the case of an offense that does not occur after a
         conviction for another offense under this section--
           ``(i) if the offense is under paragraph (1), (2), (3), (6),
         (7), or (10) of subsection (a), a fine under this title or
         imprisonment for not more than 10 years, or both; and
           ``(ii) if the offense is under paragraph (4), (5), (8), or
         (9), of subsection (a), a fine under this title or
         imprisonment for not more than 15 years, or both;
           ``(B) in the case of an offense that occurs after a
         conviction for another offense under this section, a fine
         under this title or imprisonment for not more than 20 years,
         or both; and
           ``(C) in either case, forfeiture to the United States of
         any personal property used or intended to be used to commit
         the offense.
           ``(2) Forfeiture procedure.--The forfeiture of property
         under this section, including any seizure and disposition of
         the property and any related administrative and judicial
         proceeding, shall be governed by section 413 of the
         Controlled Substances Act, except for subsection (d) of that
         section.''.
           (2) Attempts.--Section 1029(b)(1) of title 18, United
         States Code, is amended by striking ``punished as provided in
         subsection (c) of this section'' and inserting ``subject to
         the same penalties as those prescribed for the offense
         attempted''.
           (c) Definitions.--Section 1029(e)(8) of title 18, United
         States Code, is amended by inserting before the period ``or
         to intercept an electronic serial number, mobile
         identification number, or other identifier of any
         telecommunications service, equipment, or instrument''.
           (d) Applicability of New Section 1029(a)(9).--
           (1) In general.--Section 1029 of title 18, United States
         Code, is amended by adding at the end the following:
           ``(g)(1) It is not a violation of subsection (a)(9) for an
         officer, employee, or agent of, or a person engaged in
         business with, a facilities-based carrier, to engage in
         conduct (other than trafficking) otherwise prohibited by that
         subsection for the purpose of protecting the property or
         legal rights of that

    [[Page H641]]

         carrier, unless such conduct is for the purpose of obtaining
         telecommunications service provided by another facilities-
         based carrier without the authorization of such carrier.
           ``(2) In a prosecution for a violation of subsection
         (a)(9), (other than a violation consisting of producing or
         trafficking) it is an affirmative defense (which the
         defendant must establish by a preponderance of the evidence)
         that the conduct charged was engaged in for research or
         development in connection with a lawful purpose.''.
           (2) Definitions.--Section 1029(e) of title 18, United
         States Code is amended--
           (A) by striking ``and'' at the end of paragraph (6);
           (B) by striking the period at the end of paragraph (7) and
         inserting a semicolon; and
           (C) by striking the period at the end of paragraph (8); and
           (D) by adding at the end the following:
           ``(9) the term `telecommunications service' has the meaning
         given such term in section 3 of title I of the Communications
         Act of 1934 (47 U.S.C. 153));
           ``(10) the term `facilities-based carrier' means an entity
         that owns communications transmission facilities, is
         responsible for the operation and maintenance of those
         facilities, and holds an operating license issued by the
         Federal Communications Commission under the authority of
         title III of the Communications Act of 1934; and
           ``(11) the term `telecommunication identifying information'
         means electronic serial number or any other number or signal
         that identifies a specific telecommunications instrument or
         account, or a specific communication transmitted from a
         telecommunications instrument.''.
           (e) Amendment of Federal Sentencing Guidelines for Wireless
         Telephone Cloning.--
           (1) In general.--Pursuant to its authority under section
         994 of title 28, United States Code, the United States
         Sentencing Commission shall review and amend the Federal
         sentencing guidelines and the policy statements of the
         Commission, if appropriate, to provide an appropriate penalty
         for offenses involving the cloning of wireless telephones
         (including offenses involving an attempt or conspiracy to
         clone a wireless telephone).
           (2) Factors for consideration.--In carrying out this
         subsection, the Commission shall consider, with respect to
         the offenses described in paragraph (1)--
           (A) the range of conduct covered by the offenses;
           (B) the existing sentences for the offenses;
           (C) the extent to which the value of the loss caused by the
         offenses (as defined in the Federal sentencing guidelines) is
         an adequate measure for establishing penalties under the
         Federal sentencing guidelines;
           (D) the extent to which sentencing enhancements within the
         Federal sentencing guidelines and the court's authority to
         sentence above the applicable guideline range are adequate to
         ensure punishment at or near the maximum penalty for the most
         egregious conduct covered by the offenses;
           (E) the extent to which the Federal sentencing guideline
         sentences for the offenses have been constrained by statutory
         maximum penalties;
           (G) the extent to which Federal sentencing guidelines for
         the offenses adequately achieve the purposes of sentencing
         set forth in section 3553(a)(2) of title 18, United States
         Code;
           (H) the relationship of Federal sentencing guidelines for
         the offenses to the Federal sentencing guidelines for other
         offenses of comparable seriousness; and
           (I) any other factor that the Commission considers to be
         appropriate.

      Mr. McCOLLUM (during the reading). Mr. Chairman, I ask unanimous
    consent that the amendment be considered as read and printed in the
    record.
      The CHAIRMAN. Is there objection to the request of the gentleman from
    Florida?
      There was no objection.
      Mr. McCOLLUM. Mr. Chairman, I will be brief in supporting this
    amendment in the nature of a substitute, but it does contain a number
    of technical amendments that we need to talk about. The manager's
    amendment makes changes to H.R. 2460 from the form in which the bill
    was reported from the full Committee on the Judiciary. It reflects the
    input of minority members of the Committee on the Judiciary, the
    cellular telephone industry, the Justice Department of the United
    States, Secret Service and members of the Committee on the Judiciary of
    the other body which passed a bill similar to H.R. 2460 at the end of
    last year.
      Mr. Chairman, the minority has indicated support of this amendment,
    but for the benefit of all Members, I will briefly outline the
    differences between the manager's amendment in the bill as it was
    reported by the Committee on the Judiciary.
      The purpose of H.R. 2460 is to clarify the provisions of section 1029
    of Title 18 relating to equipment that could be used to clone wireless
    telephones. H.R. 2460 amends that section to make it clear that the
    mere possession of this equipment will be illegal in most instances.
      The bill as reported by the committee prohibited the possession of
    equipment which had been configured for altering or modifying
    telecommunications instruments. Upon further reflection and after
    receiving input from the computer and telecommunications trade
    associations, the decision was made to further refine this language in
    order to make it more clear what types of devices would be prescribed.
      The manager's amendment will modify the bill to refer to hardware or
    software which has been, quote, configured to insert or modify
    telecommunication identifying information associated with or contained
    in a telecommunications instrument, unquote.
      The bill defines the term ``telecommunication'' identifying
    information to mean the electronic serial number or any other number or
    signal that identifies a specific telecommunications instrument and
    account relating to its specific telecommunication or the actual
    communication itself. The effect of this amendment is to make it clear
    that only devices which can insert or modify telecommunication
    identifying information contained in or otherwise associated with a
    telecommunications instrument are made illegal by the bill.
      Mr. Chairman, H.R. 2460 as reported by the full committee amended the
    penalty provisions of section 1029 to make them more clear and to
    correct an unintended redundancy in that section. The manager's
    amendment adds an asset forfeiture provision to the bill for all
    violations of section 1029. This provision requires forfeiture to the
    government of any personal property used or intended to be used to
    commit an offense. I note that this provision does not require the
    forfeiture of real property. Further, the property subject to
    forfeiture is only that personal property which the offender used or
    intended to use to commit the offense in question.
      Additionally, the bill as reported by the subcommittee contains an
    exception to the prohibition on possessing cellular telephone cloning
    equipment for officers, employees, agents and persons under contract
    with telecommunications carriers so long as their use of this equipment
    is for the purposes of protecting the property or legal rights of the
    carrier.
      The manager's amendment eliminates the requirement that third
    persons, quote, ``be under contract with,'' unquote, a facilities-based
    carrier and requires merely the person be engaged in business with a
    facilities-based carrier. The purpose of this phrase is to include
    within the exception third parties which have a business relationship
    with the carrier, but where that relationship may not be evidenced by
    written contract.
      In most cases, these parties will be persons and companies with
    technical expertise hired by carriers to assist them in protecting
    their property and legal rights. The phrase should not be interpreted
    to include within its meaning subscribers to the services of the
    telecommunications carrier.
      The manager's amendment also adds a further modification to this
    exception to make it clear that telecommunication carriers cannot use
    these devices to obtain telecommunication services provided by other
    carriers without the other carrier's authorization.
      Finally, the manager's amendment to the bill also adds a new
    provision creating an affirmative defense to a prosecution under new
    section 1029(a)(9) in instances where the charge involved was the use,
    custody or control or possession of the equipment described in the
    bill. The affirmative defense is available if the defendant can prove
    that his or her use, custody or control or possession of this equipment
    was for the purpose of research or development in connection with a
    lawful purpose. The defendant bears the burden of proving the facts
    relating to his or her conduct by a preponderance of the evidence, and
    I point out that the affirmative defense is not available as a defense
    to a charge of production or trafficking in this type of hardware or
    software.
      Mr. Chairman, I believe the amendments made in the manager's
    amendment strengthen the bill, are entirely consistent with the intent
    of the legislation introduced by the gentleman

    [[Page H642]]

    from Texas (Mr. Sam Johnson) and I want to again thank him for his
    leadership on this issue. I also want to thank the gentleman from
    Massachusetts (Mr. Frank) and the gentlewoman from California (Ms.
    Lofgren) for their helpful suggestions as well as those who have also
    been reporting information to us on this bill.

     Explanatory Statement and Section-by-Section Analysis of H.R. 2460 as
    Amended by the Manager's Amendment Submitted by Rep. Sam Johnson, Rep.
                    Bill McCollum, and Rep. Charles Schumer

                              purpose and summary

           H.R. 2460 amends section 1029 of Title 18 of the United
         States Code, relating to fraud and related activity in
         connection with access devices. The bill amends subsection
         (a)(8) of section 1029 by deleting the ``intent to defraud''
         requirement which exists under current law in order to prove
         a violation of that section. This section relates to persons
         who knowingly use, produce, traffic in, have custody or
         control of, or possess hardware or software which has been
         configured for altering or modifying a telecommunications
         instrument. As a result of the amendments made by the bill,
         in order to prove a violation of section 1029, law
         enforcement officials will no longer have to prove that a
         defendant possessing such hardware or software did so with
         the intent to defraud another person.
           The amendment to the statute is being made because law
         enforcement officials occasionally have been thwarted in
         proving true violations of the statute by the ``intent to
         defraud'' requirement. But as the hardware and software in
         question can be used only for the purpose of altering or
         modifying telecommunications instruments, persons other than
         those working in the telecommunications industry have no
         legitimate reason to possess the equipment. Therefore,
         requiring the government to prove an ``intent to defraud'' in
         order to prove a violation of the section for possessing this
         equipment is not necessary. By eliminating this requirement
         from existing law this bill will make it easier to obtain
         convictions against criminals who possess this equipment
         before they actually use it for illegal purposes.

                    background and need for the legislation

           Cellular telephone fraud is a significant criminal activity
         in the United States. Each year the wireless telephone
         industry loses hundreds of millions of dollars in revenue as
         the result of calls made from stolen telephones or cloned
         telephones. In 1996, the last year for which data is
         available, the wireless telephone industry reported that the
         aggregate loss to the industry was approximately $710
         million. While the industry estimates that the losses for
         1997 will be less, largely attributable to anti-fraud
         technologies it has developed and employed, the loss to this
         industry is still unacceptably high.
           As significant as is the loss of revenue to the wireless
         telephone industry, cellular telephone fraud poses another,
         more sinister, crime problem. A significant amount of the
         cellular telephone fraud which occurs in this country is
         connected with other types of crime. In most cases, criminals
         used cloned phones in an effort to evade detection for the
         other crimes they are committing. This phenomenon is most
         prevalent in drug crimes, where dealers need to be in
         constant contact with their sources of supply and
         confederates on the street. These criminals often use several
         cloned phones in a day, or switch from one cloned phone to
         another each day, in order to evade detection. Most
         significantly, this technique thwarts law enforcement's
         efforts to use wiretaps in order to intercept the criminals'
         conversations in which they plan their illegal activity.
           In 1994, Congress passed the Communications Assistance for
         Law Enforcement Act (Public Law 193-414) which, in part,
         amended 18 U.S.C. Sec. 1029, which concerns fraud and related
         activity in connection with access devices. That act added a
         new provision to section 1029 to make it a crime for persons
         to knowingly, and with intent to defraud, use, produce,
         traffic in, or have custody or control of, or possess a
         scanning receiver or hardware or software used for altering
         or modifying telecommunications instruments to obtain
         unauthorized access to telecommunications services.
           Law enforcement officials have testified before the
         Subcommittee on Crime that it is often hard to prove the
         intent to defraud aspect of this section with respect to the
         possession of hardware or software used for altering or
         modifying telecommunications instruments to obtain
         unauthorized access to telecommunications services. In the
         most common case, law enforcement officials will arrest
         criminals for other crimes and find telephone cloning
         equipment in the possession of the criminals. Without finding
         specific evidence that the criminals intended to use this
         equipment to clone cellular telephones, law enforcement
         officials often have been thwarted in an effort to prove a
         violation of this statute. But because there is no legitimate
         reason why any person not working for wireless telephone
         industry carriers would possess this equipment, there is no
         question that these criminals intended to use that equipment
         to clone cellular telephones. Law enforcement officials have
         informed the Subcommittee that deleting the ``intent to
         defraud'' requirement from section 1029(a)(8) with respect to
         this equipment would enable the government to punish a person
         who merely possesses this equipment, as well as those who
         produce, traffic in, or have custody or control over it.
           While we believe that, generally speaking, Congress should
         be hesitant to criminalize the mere possession of technology
         without requiring proof of an intent to use it for an
         improper purpose, the testimony before the Subcommittee on
         Crime, both by law enforcement agencies and representatives
         of the wireless telephone industry, confirms that the only
         use for this type of equipment, other than by persons
         employed in the wireless telephone industry and law
         enforcement, is to clone cellular telephones. Although
         wireless telecommunications companies use this equipment to
         test the operation of legitimate cellular telephones, to test
         the anti-fraud technologies their companies employ to thwart
         the use of cloned telephones, and in other ways to protect
         their property and legal rights, the equipment has no other
         legitimate purpose. Thus, there is no legitimate reason for
         any other person to possess this equipment. In short, the
         requirement in existing law to prove an intent to use this
         equipment for an illegal purpose is unnecessary.
           The bill H.R. 2460, amends existing law by deleting the
         intent to defraud requirement currently found in section
         1029(a)(8). The bill strikes current subsection (a)(8) of
         section 1029 and replaces it with two separate subsections.
         New paragraph (8) restates the language presently found in
         section 1029(a)(8)(A). New paragraph (9) restates the
         introductory phrase of existing paragraph (8), but omits the
         ``intent to defraud'' requirement and essentially restates
         the text of existing subparagraph (B) of current paragraph
         (8).
           The bill also clarifies the penalties which may be imposed
         for violations of section 1029. Under existing law,
         violations of subsections (a) (5), (6), (7), or (8) are
         subject to a maximum penalty of 10 years under section
         1029(c)(1). However, these same violations are also subject
         to a maximum penalty of 15 years under subsection (c)(2) of
         that same section. This unintentional duplication of penalty
         provisions for these crimes should be corrected. The bill
         corrects this problem by restating the punishment section of
         section 1029 to more clearly state the maximum punishment for
         violations of each paragraph of section 1029(a).
           In order to ensure that telecommunications companies may
         continue to use these devices, the bill provides that it is
         not a violation of new subsection (a)(9) for an officer,
         employee, or agent of, or a person doing business with, a
         facilities-based carrier to use, produce, have custody or
         control of, or possess hardware or software as described in
         that subsection if they are doing so for the purpose of
         protecting the property of or legal rights of that carrier.
         Section 1029 presently contains an exception to that
         section's prohibition for any lawful investigative,
         protective, or intelligence activities of law enforcement
         agencies of the United States, a State, or a political
         subdivision of a State, or of an intelligence agency of the
         United States. The bill also defines ``facilities-based
         carrier'' in order to make it clear that the exception to new
         subsection (a)(9) is only available to officers, employees,
         or agents of, or persons doing business with, companies that
         actually own communications transmission facilities, and
         persons under contract with those companies, because only
         those persons have a legitimate reason to use this property
         to test the operation of and perform maintenance on those
         facilities, or otherwise to protect the property or legal
         rights of the carrier.
           The bill also amends the definition of scanning receiver
         presently found in subsection (e)(8) of section 1029. Under
         that definition, a scanning receiver is a device or apparatus
         ``that can be used to intercept a wire or electronic
         communication in violation of Chapter 119'' of Title 18. the
         bill will add to that definition to ensure that the term
         ``scanning receiver'' will be understood to also include
         devices which intercept electronic serial numbers, mobile
         identification numbers, or other identifiers of
         telecommunications service, equipment, or instruments.
           Finally, the bill provides direction to the United States
         Sentencing Commission to review and amend, if appropriate,
         its guidelines and policy statements so as to provide an
         appropriate penalty for offenses involving cloning of
         wireless telephones. The bill states eight factors which the
         Commission is to consider in reviewing existing guidelines
         and policy statements.

                          section-by-section analysis

           Section 1. Short title. Section 1 of the bill states the
         short title of the bill as the ``Wireless Telephone
         Protection Act.''
           Section 2. Fraud and Related Activity in Connection with
         Counterfeit Access Devices. Section 2 of the bill sets forth
         the amendments made by the bill to section 1029 of Title 18
         of the United States Code.
           Section 2(a) of the bill deletes existing paragraph (8)
         from section 1029(a) and replaces it with two new paragraphs.
         New paragraph (8) restates in its entirety the text of old
         paragraph (8)(A). The text of new paragraph (9) is
         essentially the text of existing paragraph (8)(B), except
         that the existing requirement that the government show an
         ``intent to defraud'' in order to prove a violation has been
         deleted. Therefore, as section 1029 will be amended, in order
         to prove a violation of new subsection (a)(9), the government
         need only prove that the defendant knowingly used, produced,
         trafficked in, had custody or control of, or possessed
         hardware or

    [[Page H643]]

         software with the knowledge that it had been configured to
         insert or modify telecommunication identifying information
         associated with or contained in a telecommunications
         instrument so that the instrument could be used to obtain
         telecommunications service without authorization.
           As amended, new subsection (a)(9) does not make it a crime
         to simply possess a wireless telephone or other access device
         that has been manufactured or modified to obtain unauthorized
         use of telecommunications services. Under other subsections
         of section 1029, however, it will continue to be illegal to
         use, produce, traffic in, have custody or control of, or
         possess such a device if the act was done with the intent to
         defraud another person. This is current law, and it remains
         unchanged by the bill.
           The statute, as amended, also does not prohibit persons
         from simply possessing equipment that only intercepts
         electronic serial numbers or wireless telephone numbers
         (defined as ``scanning receivers'' under section 1029, as
         amended by the bill). For example, companies which produce
         technology to sell to carriers or state and local governments
         that ascertains the location of wireless telephones as part
         of enhanced 911 services do not violate section 1029 by their
         actions. Under new subsection (a)(8), however, it will
         continue to be illegal to use, produce, traffic in, have
         custody or control of, or possess a scanning receiver if such
         act was done with the intent to defraud another person. This
         also is current law, and it remains unchanged by the bill.
           While not specifically defined in the bill, the term
         ``telecommunications instrument'' as used in new subsection
         (a)(9) should be construed to mean the type of device which
         can be used by individuals to transmit or receive wireless
         telephone calls. The term should be construed to include
         within its definition the microchip or card which identifies
         the device or communications transmitted through the device.
           Section 2(b) of the bill amends all of existing subsection
         (c) of section 1029. Due to a previous amendment to this
         subsection, an inconsistency exists in current law with
         respect to the maximum punishment which may be imposed for
         violations of current paragraphs (a)(5), (6), (7), or (8).
         Currently, the maximum punishment for violations of these
         paragraphs is 10 years under subsection (c)(1) but 15 years
         under subsection (c)(2). Clearly, it is inappropriate for
         there to be different maximum punishments which may be
         imposed for violations of these paragraphs. Section 2(b) of
         the bill eliminates this inconsistency by clearly stating the
         maximum punishments which may be imposed for all violations
         of section 1029.
           Section 2(b) of the bill also amends existing subsection
         (b)(1) of section 1029 to state more clearly the maximum
         punishment which may be imposed for attempts to commit the
         crimes described in section 1029. As amended, subsection
         (b)(1) will provide that convictions for attempts under
         section 1029 are to be subject to the same penalties as those
         proscribed for the offense attempted.
           Section 2(b) of the bill further amends existing subsection
         (b)(1) of section 1029 to add a criminal asset forfeiture
         provision for violations of section 1029(a). In the event of
         a conviction for a violation of this subsection, the
         defendant will be required to forfeit to the United States
         any personal property used or which was intended to be used
         to commit the offense. This section of the bill also provides
         that the forfeiture procedure to be used is that contained in
         section 413 of the Controlled Substances Act (except for
         subsection (d) of that section).
           Section 2(c) of the bill amends the definition of
         ``scanning receiver'' currently found in section 1029(e)(8).
         The bill adds to the definition of scanning receiver
         additional language to ensure that the defined term is
         understood to include a device or apparatus that can be used
         to intercept an electronic serial number, mobile
         identification number, or other identifier of any
         telecommunications service, equipment, or instrument.
           Section 2(d) of the bill creates an exception to the crime
         described in new subsection (a)(9) for persons who are
         employed by or are engaged in business with certain
         telecommunications carriers. The new exception provides that
         it is not a violation of new subsection (a)(9) for an
         officer, employer, or agent of a facilities-based carrier, or
         a person engaged in business with a facilities-based carrier,
         to engage in conduct (other than trafficking) otherwise
         prohibited by that subsection in limited situations.
         Therefore, the behavior permitted by this subsection is
         the use, production, custody or control of, or possession
         of the hardware or software described in subsection
         (a)(9). The exception is only available to those persons
         described if their actions were taken for the purpose of
         protecting the property or legal rights of the facilities-
         based carrier.
           The purpose of the phrase ``person engaged in business with
         a facilities-based carrier'' is to include within the
         exception third parties which have a business relationship
         with the carrier but where that relationship may not be
         evidenced by a written contract. In most cases, these parties
         will be persons and companies with technical expertise hired
         by carriers to assist them in protecting their property and
         legal rights. The phrase should not be interpreted to include
         within its meaning parties whose business relationship with
         the carrier is only by virtue of having subscribed to the
         services of the telecommunications carrier.
           The phrase ``for the purpose of protecting the property or
         legal rights'' of the carrier should be narrowly construed.
         Only such actions which might be deemed to be part of the
         ordinary course of business of a telecommunications carrier,
         such as actions involving maintenance on or modifications to
         its telecommunications system, or which are designed to test
         the operation of the system or the system's ability to deter
         unauthorized usage (including the reverse engineering of
         hardware or software configured as described in new
         subsection (a)(9)), should be deemed to fall within this
         exception. Acts taken with the intent to defraud another,
         even if taken by officers, employees, or agents of a
         facilities-based carrier, or by persons under contract with a
         facilities-based carrier, would still violate the statute.
           We take particular note of the fact that under certain
         under some circumstances a facilities-based carrier may wish
         to use this type of equipment to intercept signals carried on
         another telecommunications carrier's system for the purpose
         of testing whether its customers may be able to utilize the
         other carrier's system when those customers initiate or
         receive calls while inside the other carrier's geographic
         area of operation. It is our understanding that these types
         of interceptions have always occurred with the express
         consent of the two carriers involved. We believe that this is
         the appropriate practice. Therefore, the bill has been
         amended to include an ``exception to the exception.'' The
         excepted conduct is not excepted (i.e., the conduct should be
         deemed to violate the statute) if the conduct was undertaken
         for the purpose of obtaining telecommunications service
         provided by another facilities-based carrier without the
         authorization of that carrier. Thus, the exception created by
         subsection (d) of the bill only applies to situations where
         the other carrier has consented to the use of this equipment
         to obtain the service provided on its system.
           Subsection (d) of the bill also creates an affirmative
         defense to the crime described in new subsection (a)(9) for
         violations other than those consisting of producing or
         trafficking. The section provides that it is a defense to a
         prosecution for such a violation if the conduct charged was
         engaged in for research or development in connection with a
         lawful purpose. The defendant bears the burden of proving the
         facts supporting this defense by a preponderance of the
         evidence. The defendant must prove that the purpose of its
         acts was otherwise lawful and that its conduct was limited to
         research and development activities. Acts which go beyond
         research and development, even if connected to a lawful
         purpose, fall outside the scope of the affirmative defense.
         The defense is only available to defend against the charges
         of use, custody or control of, or possessing the hardware or
         software described in subsection (a)(9). In the event that a
         defendant is charged with one of these violations together
         with a charge for which the defense is not available (e.g.,
         the defendant is charged with both use and trafficking) the
         defense may still be used by the defendant but only as
         against the charge permitted by the statute (e.g., use).
           Section (d) of the bill also adds new paragraph (9) to
         subsection (e) of section 1029 in order to define the term
         ``telecommunications service'' and provides that the term is
         to have the meaning given that term in section 3 of title 1
         of the Communications Act of 1934 (47 U.S.C. Section 153).
           Section (d) of the bill also adds new paragraph (10)
         section 1029(e) in order to define the term ``facilities-
         based carrier'' as it is used in the exception to new
         subsection (a)(9). That term is defined to mean an entity
         that owns communications transmissions facilities, is
         responsible for the operation and maintenance of those
         facilities, and holds an operating license issued by the
         Federal Communications Commission. Thus, it does not include
         so-called ``resellers'' of wireless telephone air time,
         companies which buy blocks of air time and resell it to
         retail customers. The definition also does not include
         companies which hold nominal title to telecommunications
         equipment but which have no responsibility for their
         operations or for performing maintenance on them. Finally,
         the definition does not include persons or companies which
         may own and operate tangible telecommunications equipment but
         which do not hold the appropriate license for that purpose
         issued by the Federal Communications Commission.
           Finally, the bill also defines ``telecommunication
         identifying information,'' one of the key terms in new
         subsection (a)(9). That term is defined to mean an electronic
         serial number or any other number or signal that identifies a
         specific telecommunications instrument. The intent of this
         term is to identify the unique components or features of a
         telecommunications instrument which can be inserted or
         modified by the devices described in new subsection (a)(9)
         such that the instrument can be used to obtain
         telecommunications service without authorization.
           Section 2(e) of the bill directs the United States
         Sentencing Commission to review and amend its sentencing
         guidelines and policy statements, if appropriate, to provide
         an appropriated penalty for offenses involving the cloning of
         wireless telephones. This section of the bill states a number
         of factors which the Sentencing Commission is directed to
         consider during its review. We are concerned that violations
         of section 1029 are not punished as severely as other,
         similar, fraud crimes are punished under the Sentencing
         Commission's sentencing guidelines and, in any event, are not
         punished as severely as

    [[Page H644]]

         they should be in light of the magnitude of loss resulting
         from this crime and the fact that this crime is often used to
         facilitate more serious crimes. This section of the bill
         directs the Sentencing Commission to consider these and other
         factors in making to Congress as part of its annual reporting
         process whatever recommendations it deems appropriate with
         respect to the guidelines for imposing punishment for
         violations of section 1029.
      Mr. McCOLLUM. Mr. Chairman, I yield back the balance of my time on
    this amendment.
      Mr. WEXLER. Mr. Chairman, I rise in support of the McCollum
    amendment.
      The gentleman from Florida (Mr. McCollum) has described what this
    amendment does. It simply makes clear that FCC license carriers can use
    the type of equipment described by the bill for their legitimate
    business purposes. On behalf of the gentleman from Michigan (Mr.
    Conyers) I want to thank Chairman McCollum and his counsel, Glen
    Schmitt, for their willingness to work through this issue. I also want
    to make it clear because there have been some questions on this point
    that the bill before us does not affect scanners. Scanners do have
    legitimate uses and will remain available.
      Mr. SAM JOHNSON of Texas. Mr. Chairman, I move to strike the last
    word.
      Mr. Chairman, in closing I just want to say that this bill will make
    cellular telephones across America more secure. It is high time in our
    society that the victim rather than the criminal is protected. No
    longer will the hard-core criminal be able to steal cellular phone
    numbers and rack up huge phone bills which cost all of us.
      Mr. Chairman, this bill is about freedom and security, the right of
    each American to freely and safely use their phones without the fear of
    their number being stolen. This bill is going to help our law
    enforcement agencies and ensure a safer America for all.
      The CHAIRMAN. The question is on the amendment in the nature of a
    substitute offered by the gentleman from Florida (Mr. McCollum).
      The amendment in the nature of a substitute was agreed to.
      The CHAIRMAN. Are there other amendments?
      If not, the question on the committee amendment in the nature of a
    substitute, as amended.
      The committee amendment in the nature of a substitute, as amended,
    was agreed to.
      The CHAIRMAN. Under the rule, the Committee rises.
      Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
    Gilchrest) having assumed the chair, Mr. Collins, Chairman of the
    Committee of the Whole House on the State of the Union, reported that
    that Committee, having had under consideration the bill (H.R. 2460) to
    amend title 18, United States Code, with respect to scanning receivers
    and similar devices, pursuant to House Resolution 368, he reported the
    bill back to the House with an amendment adopted by the Committee of
    the Whole.
      The SPEAKER pro tempore. Under the rule, the previous question is
    ordered.
      Is a separate vote demanded on the amendment to the committee
    amendment in the nature of a substitute adopted by the Committee of the
    Whole? If not, the question is on the committee amendment in the nature
    of a substitute.
      The committee amendment in the nature of a substitute was agreed to.
      The SPEAKER pro tempore. The question is on the engrossment and third
    reading of the bill.
      The bill was ordered to be engrossed and read a third time, and was
    read the third time.
      The SPEAKER pro tempore. The question is on the passage of the bill.
      The question was taken; and the Speaker pro tempore announced that
    the ayes appeared to have it.
      Mr. McCOLLUM. Mr. Speaker, on that I demand the yeas and nays.
      The yeas and nays were ordered.
      The vote was taken by electronic device, and there were--yeas 414,
    nays 1, not voting 15, as follows:

                                 [Roll No. 25]

                                   YEAS--414

         Abercrombie
         Ackerman
         Aderholt
         Allen
         Andrews
         Archer
         Armey
         Bachus
         Baesler
         Baker
         Baldacci
         Ballenger
         Barcia
         Barr
         Barrett (NE)
         Barrett (WI)
         Bartlett
         Barton
         Bass
         Bateman
         Becerra
         Bentsen
         Bereuter
         Berman
         Berry
         Bilbray
         Bilirakis
         Bishop
         Blagojevich
         Bliley
         Blumenauer
         Blunt
         Boehlert
         Boehner
         Bonilla
         Bonior
         Borski
         Boswell
         Boucher
         Boyd
         Brady
         Brown (CA)
         Brown (OH)
         Bryant
         Bunning
         Burr
         Burton
         Buyer
         Callahan
         Calvert
         Camp
         Canady
         Cannon
         Cardin
         Carson
         Castle
         Chabot
         Chambliss
         Chenoweth
         Christensen
         Clay
         Clayton
         Clement
         Clyburn
         Coble
         Coburn
         Collins
         Combest
         Condit
         Conyers
         Cook
         Cooksey
         Costello
         Cox
         Coyne
         Cramer
         Crane
         Crapo
         Cubin
         Cummings
         Cunningham
         Danner
         Davis (FL)
         Davis (IL)
         Davis (VA)
         Deal
         DeFazio
         DeGette
         Delahunt
         DeLauro
         DeLay
         Deutsch
         Diaz-Balart
         Dickey
         Dicks
         Dingell
         Dixon
         Doggett
         Dooley
         Doolittle
         Doyle
         Dreier
         Duncan
         Dunn
         Edwards
         Ehlers
         Ehrlich
         Emerson
         Engel
         English
         Ensign
         Eshoo
         Etheridge
         Evans
         Everett
         Ewing
         Farr
         Fawell
         Fazio
         Filner
         Foley
         Forbes
         Fossella
         Fowler
         Fox
         Frank (MA)
         Franks (NJ)
         Frelinghuysen
         Frost
         Furse
         Gallegly
         Ganske
         Gejdenson
         Gekas
         Gephardt
         Gibbons
         Gilchrest
         Gillmor
         Gilman
         Goode
         Goodlatte
         Goodling
         Gordon
         Goss
         Graham
         Granger
         Green
         Greenwood
         Gutierrez
         Gutknecht
         Hall (OH)
         Hall (TX)
         Hamilton
         Hansen
         Harman
         Hastert
         Hastings (FL)
         Hayworth
         Hefley
         Hefner
         Herger
         Hill
         Hilleary
         Hilliard
         Hinchey
         Hinojosa
         Hobson
         Hoekstra
         Holden
         Hooley
         Horn
         Hostettler
         Houghton
         Hoyer
         Hulshof
         Hunter
         Hutchinson
         Hyde
         Inglis
         Istook
         Jackson (IL)
         Jackson-Lee (TX)
         Jefferson
         Jenkins
         John
         Johnson (CT)
         Johnson (WI)
         Johnson, E. B.
         Johnson, Sam
         Jones
         Kanjorski
         Kaptur
         Kasich
         Kelly
         Kennedy (MA)
         Kennedy (RI)
         Kennelly
         Kildee
         Kilpatrick
         Kim
         Kind (WI)
         King (NY)
         Kingston
         Kleczka
         Klug
         Knollenberg
         Kolbe
         Kucinich
         LaFalce
         LaHood
         Lampson
         Lantos
         Largent
         Latham
         LaTourette
         Lazio
         Leach
         Levin
         Lewis (CA)
         Lewis (GA)
         Lewis (KY)
         Linder
         Lipinski
         Livingston
         LoBiondo
         Lofgren
         Lowey
         Lucas
         Maloney (CT)
         Maloney (NY)
         Manton
         Manzullo
         Markey
         Martinez
         Mascara
         Matsui
         McCarthy (MO)
         McCarthy (NY)
         McCollum
         McCrery
         McDade
         McDermott
         McGovern
         McHale
         McHugh
         McInnis
         McIntosh
         McIntyre
         McKeon
         McKinney
         McNulty
         Meehan
         Meek (FL)
         Meeks (NY)
         Menendez
         Metcalf
         Mica
         Millender-McDonald
         Miller (FL)
         Minge
         Mink
         Moakley
         Mollohan
         Moran (KS)
         Moran (VA)
         Morella
         Murtha
         Myrick
         Nadler
         Neal
         Nethercutt
         Neumann
         Ney
         Norwood
         Nussle
         Oberstar
         Obey
         Olver
         Ortiz
         Owens
         Oxley
         Packard
         Pallone
         Pappas
         Parker
         Pascrell
         Pastor
         Paxon
         Payne
         Pease
         Peterson (MN)
         Peterson (PA)
         Petri
         Pickering
         Pickett
         Pitts
         Pombo
         Pomeroy
         Porter
         Portman
         Price (NC)
         Pryce (OH)
         Quinn
         Radanovich
         Rahall
         Ramstad
         Rangel
         Redmond
         Regula
         Reyes
         Riggs
         Riley
         Rivers
         Rodriguez
         Roemer
         Rogan
         Rogers
         Rohrabacher
         Ros-Lehtinen
         Rothman
         Roukema
         Roybal-Allard
         Royce
         Rush
         Ryun
         Sabo
         Salmon
         Sanchez
         Sandlin
         Sanford
         Sawyer
         Saxton
         Schaefer, Dan
         Schaffer, Bob
         Schumer
         Scott
         Sensenbrenner
         Serrano
         Sessions
         Shadegg
         Shaw
         Shays
         Sherman
         Shimkus
         Shuster
         Sisisky
         Skaggs
         Skeen
         Skelton
         Slaughter
         Smith (MI)
         Smith (NJ)
         Smith (OR)
         Smith (TX)
         Smith, Adam
         Smith, Linda
         Snowbarger
         Snyder
         Solomon
         Souder
         Spence
         Spratt
         Stabenow
         Stark
         Stearns
         Stenholm
         Stokes
         Strickland
         Stump
         Stupak
         Sununu
         Talent
         Tanner
         Tauscher
         Tauzin
         Taylor (MS)
         Taylor (NC)
         Thomas
         Thompson
         Thornberry
         Thune
         Thurman
         Tiahrt
         Tierney
         Torres
         Towns
         Traficant
         Turner
         Upton
         Velazquez
         Vento
         Visclosky
         Walsh
         Wamp
         Waters
         Watkins
         Watt (NC)
         Watts (OK)
         Waxman
         Weldon (FL)
         Weldon (PA)
         Weller
         Wexler
         Weygand
         White
         Whitfield
         Wicker
         Wise
         Wolf
         Woolsey
         Wynn
         Yates
         Young (AK)
         Young (FL)

                                    NAYS--1

         Paul

                                 NOT VOTING--15

         Brown (FL)
         Campbell
         Fattah
         Ford
         Gonzalez
         Hastings (WA)
         Klink
         Luther
         Miller (CA)
         Northup
         Pelosi
         Poshard
         Sanders
         Scarborough
         Schiff

                                  {time}  1132

      So the bill was passed.

    [[Page H645]]

      The result of the vote was announced as above recorded.
      A motion to reconsider was laid on the table.

                              ____________________

    -------------------------------------------------------------------------

    [Congressional Record: February 26, 1998 (House)]
    [Page H645]
    From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
    [DOCID:cr26fe98-66]

                              PERSONAL EXPLANATION

      Mrs. NORTHUP. Mr. Speaker, on Roll Call Vote no. 25, I was
    unavoidably detained. Had I been present, I would have voted aye.
      Mr. McCOLLUM. Mr. Speaker, pursuant to House Resolution 368, I call
    up from the Speaker's table the Senate bill (S. 493) to amend section
    1029 of title 18, United States Code, with respect to cellular
    telephone cloning paraphernalia, and ask for its immediate
    consideration in the House.
      The Clerk read the title of the Senate bill.
      The text of S. 493 is as follows:

                                     S. 493

           Be it enacted by the Senate and House of Representatives of
         the United States of America in Congress assembled,

         SECTION 1. SHORT TITLE.

           This Act may be cited as the ``Wireless Telephone
         Protection Act''.

         SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH
                       COUNTERFEIT ACCESS DEVICES.

           (a) Unlawful Acts.--Section 1029(a) of title 18, United
         States Code, is amended--
           (1) by redesignating paragraph (9) as paragraph (10); and
           (2) by striking paragraph (8) and inserting the following:
           ``(8) knowingly and with intent to defraud uses, produces,
         traffics in, has control or custody of, or possesses a
         scanning receiver;
           ``(9) knowingly uses, produces, traffics in, has control or
         custody of, or possesses hardware or software, knowing it has
         been configured for altering or modifying a
         telecommunications instrument so that such instrument may be
         used to obtain unauthorized access to telecommunications
         services; or''.
           (b) Penalties.--
           (1) Generally.--Section 1029(c) of title 18, United States
         Code, is amended to read as follows:
           ``(c) Penalties.--(1) In general.--The punishment for an
         offense under subsection (a) is--
           ``(A) in the case of an offense that does not occur after a
         conviction for another offense under this section, which
         conviction has become final--
           ``(i) if the offense is under paragraph (3), (6), (7), or
         (10) of subsection (a), a fine under this title or
         imprisonment for not more than 10 years, or both; and
           ``(ii) if the offense is under paragraph (1), (2), (4),
         (5), (8), or (9), of subsection (a), a fine under this title
         or imprisonment for not more than 15 years, or both;
           ``(B) in the case of an offense that occurs after a
         conviction for another offense under this section, which
         conviction has become final, a fine under this title or
         imprisonment for not more than 20 years, or both; and
           ``(C) in any case, in addition to any other punishment
         imposed or any other forfeiture required by law, forfeiture
         to the United States of any personal property used or
         intended to be used to commit, facilitate, or promote the
         commission of the offense.
           ``(2) Applicable Procedure.--The criminal forfeiture of
         personal property subject to forfeiture under paragraph
         (1)(C), any seizure and disposition thereof, and any
         administrative or judicial proceeding in relation thereto,
         shall be governed by subsections (c) and (e) through (p) of
         section 413 of the Controlled Substances Act (21 U.S.C.
         853).''.
           (2) Attempts.--Section 1029(b)(1) of title 18, United
         States Code, is amended by striking ``punished as provided in
         subsection (c) of this section'' and inserting ``subject to
         the same penalties as those prescribed for the offense
         attempted''.
           (c) Definition of Scanning Receiver.--Section 1029(e) of
         title 18, United States Code, is amended--
           (1) in paragraph (6), by striking ``and'' at the end;
           (2) in paragraph (7)--
           (A) by striking ``The'' and inserting ``the''; and
           (B) by striking the period at the end and inserting a
         semicolon; and
           (3) in paragraph (8), by striking the period at the end and
         inserting ``or to intercept an electronic serial number,
         mobile identification number, or other identifier of any
         telecommunications service, equipment, or instrument; and''.
           (d) Applicability of New Section 1029(a)(9).--
           (1) In general.--Section 1029 of title 18, United States
         Code, is amended by adding at the end the following:
           ``(g) It is not a violation of subsection (a)(9) for an
         officer, employee, or agent of, or a person under contract
         with, a facilities-based carrier, for the purpose of
         protecting the property or legal rights of that carrier, to
         use, produce, have custody or control of, or possess hardware
         or software configured as described in that subsection
         (a)(9): Provided, That if such hardware or software is used
         to obtain access to telecommunications service provided by
         another facilities-based carrier, such access is
         authorized.''.
           (2) Definition of facilities-based carrier.--Section
         1029(e) of title 18, United States Code, as amended by
         subsection (c) of this section, is amended by adding at the
         end the following:
           ``(9) the term `facilities-based carrier' means an entity
         that owns communications transmission facilities, is
         responsible for the operation and maintenance of those
         facilities, and holds an operating license issued by the
         Federal Communications Commission under the authority of
         title III of the Communications Act of 1934.''.
           (e) Amendment of Federal Sentencing Guidelines for Wireless
         Telephone Cloning.--
           (1) In general.--Pursuant to its authority under section
         994 of title 28, United States Code, the United States
         Sentencing Commission shall review and amend the Federal
         sentencing guidelines and the policy statements of the
         Commission, if appropriate, to provide an appropriate penalty
         for offenses involving the cloning of wireless telephones
         (including offenses involving an attempt or conspiracy to
         clone a wireless telephone).
           (2) Factors for consideration.--In carrying out this
         subsection, the Commission shall consider, with respect to
         the offenses described in paragraph (1)--
           (A) the range of conduct covered by the offenses;
           (B) the existing sentences for the offenses;
           (C) the extent to which the value of the loss caused by the
         offenses (as defined in the Federal sentencing guidelines) is
         an adequate measure for establishing penalties under the
         Federal sentencing guidelines;
           (D) the extent to which sentencing enhancements within the
         Federal sentencing guidelines and the court's authority to
         impose a sentence in excess of the applicable guideline range
         are adequate to ensure punishment at or near the maximum
         penalty for the most egregious conduct covered by the
         offenses;
           (E) the extent to which the Federal sentencing guideline
         sentences for the offenses have been constrained by statutory
         maximum penalties;
           (F) the extent to which Federal sentencing guidelines for
         the offenses adequately achieve the purposes of sentencing
         set forth in section 3553(a)(2) of title 18, United States
         Code;
           (G) the relationship of Federal sentencing guidelines for
         the offenses to the Federal sentencing guidelines for other
         offenses of comparable seriousness; and
           (H) any other factors that the Commission considers to be
         appropriate.

                        Motion Offered by Mr. Mc Collum

      Mr. McCOLLUM. Mr. Speaker, pursuant to the rule, I offer a motion.
      The Clerk read as follows:

           Mr. McCollum of Florida moves to strike out all after the
         enacting clause of the Senate bill, S. 493, and insert in
         lieu thereof the text of the bill, H.R. 2460, as passed by
         the House.

      The motion was agreed to.
      The Senate bill was ordered to be read a third time, was read the
    third time, and passed.
      The title of the Senate bill was amended so as to read: ``A bill to
    amend title 18, United States Code, with respect to scanning receivers
    and similar devices.''

      A motion to reconsider was laid on the table.
      A similar House bill (H.R. 2460) was laid on the table.

                              ____________________

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    -------------------------------------------------------------------------

    2 March 1998
    Source: http://www.access.gpo.gov/su_docs/aces/aaces002.html

    -------------------------------------------------------------------------

    [DOCID: f:h2460ih.txt]

    105th CONGRESS
      1st Session
                                    H. R. 2460

        To amend title 18, United States Code, with respect to scanning
                         receivers and similar devices.

    _______________________________________________________________________

                        IN THE HOUSE OF REPRESENTATIVES

                               September 11, 1997

     Mr. Sam Johnson of Texas (for himself, Mr. McCollum, Mr. Schumer, Mr.
     Norwood, and Mr. Smith of Texas) introduced the following bill; which
                 was referred to the Committee on the Judiciary

    _______________________________________________________________________

                                     A BILL

        To amend title 18, United States Code, with respect to scanning
                         receivers and similar devices.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,

    SECTION 1. SHORT TITLE.

        This Act may be cited as the ``Wireless Telephone Protection Act''.

    SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH COUNTERFEIT
                  ACCESS DEVICES.

        (a) Unlawful Acts.--Section 1029(a) of title 18, United States
    Code, is amended--
                (1) by redesignating paragraph (9) as paragraph (10); and
                (2) by striking paragraph (8) and inserting the following:
                ``(8) knowingly and with intent to defraud uses, produces,
            traffics in, has control or custody of, or possesses a scanning
            receiver;
                ``(9) knowingly uses, produces, traffics in, has control or
            custody of, or possesses hardware or software, knowing it has
            been configured for altering or modifying a telecommunications
            instrument so that such instrument may be used to obtain
            unauthorized access to telecommunications services; or''.
        (b) Penalties.--
                (1) Generally.--Section 1029(c) of title 18, United States
            Code, is amended to read as follows:
        ``(c) Penalties.--The punishment for an offense under subsection
    (a) of this section is--
                ``(1) in the case of an offense that does not occur after a
            conviction for another offense under this section--
                        ``(A) if the offense is under paragraph (1), (2),
                    (3), (6), (7), or (10) of subsection (a), a fine under
                    this title or imprisonment for not more than 10 years,
                    or both; and
                        ``(B) if the offense is under paragraph (4), (5),
                    (8), or (9), of subsection (a), a fine under this title
                    or imprisonment for not more than 15 years, or both;
                    and
                ``(2) in the case of an offense that occurs after a
            conviction for another offense under this section, a fine under
            this title or imprisonment for not more than 20 years, or
            both.''.
                (2) Attempts.--Section 1029(b)(1) of title 18, United
            States Code, is amended by striking ``punished as provided in
            subsection (c) of this section'' and inserting ``subject to the
            same penalties as those prescribed for the offense attempted''.
        (c) Definitions.--Section 1029(e) of title 18, United States Code,
    is amended--
                (1) in paragraph (6), by striking ``and'';
                (2) in paragraph (7)--
                        (A) by striking ``The'' and inserting ``the''; and
                        (B) by striking the period and inserting ``; and'';
                    and
                (3) in paragraph (8), by striking the period and inserting
            ``or to intercept an electronic serial number, mobile
            identification number, or other identifier of any
            telecommunications service, equipment, or instrument;''.
        (d) Applicability of New Section 1029(a)(9).--
                (1) In general.--Section 1029 of title 18, United States
            Code, is amended by adding at the end the following:
        ``(g) It is not a violation of subsection (a)(9) for an officer,
    employee, or agent of, or a person under contract with, a facilities-
    based carrier, for the purpose of protecting the property or legal
    rights of that carrier, to use, produce, have custody or control of, or
    possess hardware or software configured as described in that subsection
    (a)(9).''.
                (2) Definition.--Section 1029(e) of title 18, United States
            Code is amended--
                        (A) by striking ``and'' at the end of paragraph
                    (6);
                        (B) by striking the period at the end of paragraph
                    (7) and inserting a semicolon; and
                        (C) by striking the period at the end of paragraph
                    (8) and inserting ``; and''; and
                        (D) by adding at the end the following:
        ``(9) As used in this subsection, the term `facilities-based
    carrier' means an entity that owns communications transmission
    facilities, is responsible for the operation and maintenance of those
    facilities, and holds an operating license issued by the Federal
    Communications Commission under the authority of title III of the
    Communications Act of 1934.''.
        (e) Amendment of Federal Sentencing Guidelines for Wireless
    Telephone Cloning.--
                (1) In general.--Pursuant to its authority under section
            994 of title 28, United States Code, the United States
            Sentencing Commission shall review and amend the Federal
            sentencing guidelines and the policy statements of the
            Commission, if appropriate, to provide an appropriate penalty
            for offenses involving the cloning of wireless telephones
            (including offenses involving an attempt or conspiracy to clone
            a wireless telephone).
                (2) Factors for consideration.--In carrying out this
            subsection, the Commission shall consider, with respect to the
            offenses described in paragraph (1)--
                        (A) the range of conduct covered by the offenses;
                        (B) the existing sentences for the offenses;
                        (C) the extent to which the value of the loss
                    caused by the offenses (as defined in the Federal
                    sentencing guidelines) is an adequate measure for
                    establishing penalties under the Federal sentencing
                    guidelines;
                        (D) the extent to which sentencing enhancements
                    within the Federal sentencing guidelines and the
                    court's authority to sentence above the applicable
                    guideline range are adequate to ensure punishment at or
                    near the maximum penalty for the most egregious conduct
                    covered by the offenses;
                        (E) the extent to which the Federal sentencing
                    guideline sentences for the offenses have been
                    constrained by statutory maximum penalties;
                        (G) the extent to which Federal sentencing
                    guidelines for the offenses adequately achieve the
                    purposes of sentencing set forth in section 3553(a)(2)
                    of title 18, United States Code;
                        (H) the relationship of Federal sentencing
                    guidelines for the offenses to the Federal sentencing
                    guidelines for other offenses of comparable
                    seriousness; and
                        (I) any other factor that the Commission considers
                    to be appropriate.
                                     <all>

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    [DOCID: f:h2460rh.txt]

                                                     Union Calendar No. 239
    105th CONGRESS
      2d Session
                                    H. R. 2460

                              [Report No. 105-418]

        To amend title 18, United States Code, with respect to scanning
                         receivers and similar devices.

    _______________________________________________________________________

                        IN THE HOUSE OF REPRESENTATIVES

                               September 11, 1997

     Mr. Sam Johnson of Texas (for himself, Mr. McCollum, Mr. Schumer, Mr.
     Norwood, and Mr. Smith of Texas) introduced the following bill; which
                 was referred to the Committee on the Judiciary

                               February 24, 1998

     Additional sponsors: Mr. Gekas, Mr. Wynn, Mr. Hutchinson, Mr. Meehan,
                                and Mr. Sessions

                               February 24, 1998

      Reported with an amendment, committed to the Committee of the Whole
           House on the State of the Union, and ordered to be printed
     [Strike out all after the enacting clause and insert the part printed
                                   in italic]
        [For text of introduced bill, see copy of bill as introduced on
                              September 11, 1997]

    _______________________________________________________________________

                                     A BILL

        To amend title 18, United States Code, with respect to scanning
                         receivers and similar devices.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,

    SECTION 1. SHORT TITLE.

        This Act may be cited as the ``Wireless Telephone Protection Act''.

    SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH COUNTERFEIT
                  ACCESS DEVICES.

        (a) Unlawful Acts.--Section 1029(a) of title 18, United States
    Code, is amended--
                (1) by redesignating paragraph (9) as paragraph (10); and
                (2) by striking paragraph (8) and inserting the following:
                ``(8) knowingly and with intent to defraud uses, produces,
            traffics in, has control or custody of, or possesses a scanning
            receiver;
                ``(9) knowingly uses, produces, traffics in, has control or
            custody of, or possesses hardware or software, knowing it has
            been configured for altering or modifying a telecommunications
            instrument so that such instrument may be used to obtain
            unauthorized access to telecommunications services; or''.
        (b) Penalties.--
                (1) Generally.--Section 1029(c) of title 18, United States
            Code, is amended to read as follows:
        ``(c) Penalties.--The punishment for an offense under subsection
    (a) of this section is--
                ``(1) in the case of an offense that does not occur after a
            conviction for another offense under this section--
                        ``(A) if the offense is under paragraph (1), (2),
                    (3), (6), (7), or (10) of subsection (a), a fine under
                    this title or imprisonment for not more than 10 years,
                    or both; and
                        ``(B) if the offense is under paragraph (4), (5),
                    (8), or (9), of subsection (a), a fine under this title
                    or imprisonment for not more than 15 years, or both;
                    and
                ``(2) in the case of an offense that occurs after a
            conviction for another offense under this section, a fine under
            this title or imprisonment for not more than 20 years, or
            both.''.
                (2) Attempts.--Section 1029(b)(1) of title 18, United
            States Code, is amended by striking ``punished as provided in
            subsection (c) of this section'' and inserting ``subject to the
            same penalties as those prescribed for the offense attempted''.
        (c) Definitions.--Section 1029(e)(8) of title 18, United States
    Code, is amended by inserting before the period ``or to intercept an
    electronic serial number, mobile identification number, or other
    identifier of any telecommunications service, equipment, or
    instrument''.
        (d) Applicability of New Section 1029(a)(9).--
                (1) In general.--Section 1029 of title 18, United States
            Code, is amended by adding at the end the following:
        ``(g) It is not a violation of subsection (a)(9) for an officer,
    employee, or agent of, or a person under contract with, a facilities-
    based carrier, for the purpose of protecting the property or legal
    rights of that carrier, to use, produce, have custody or control of, or
    possess hardware or software configured as described in that subsection
    (a)(9).''.
                (2) Definition.--Section 1029(e) of title 18, United States
            Code is amended--
                        (A) by striking ``and'' at the end of paragraph
                    (6);
                        (B) by striking the period at the end of paragraph
                    (7) and inserting a semicolon;
                        (C) by striking the period at the end of paragraph
                    (8) and inserting ``; and''; and
                        (D) by adding at the end the following:
                ``(9) the term `facilities-based carrier' means an entity
            that owns communications transmission facilities, is
            responsible for the operation and maintenance of those
            facilities, and holds an operating license issued by the
            Federal Communications Commission under the authority of title
            III of the Communications Act of 1934.''.
        (e) Amendment of Federal Sentencing Guidelines for Wireless
    Telephone Cloning.--
                (1) In general.--Pursuant to its authority under section
            994 of title 28, United States Code, the United States
            Sentencing Commission shall review and amend the Federal
            sentencing guidelines and the policy statements of the
            Commission, if appropriate, to provide an appropriate penalty
            for offenses involving the cloning of wireless telephones
            (including offenses involving an attempt or conspiracy to clone
            a wireless telephone).
                (2) Factors for consideration.--In carrying out this
            subsection, the Commission shall consider, with respect to the
            offenses described in paragraph (1)--
                        (A) the range of conduct covered by the offenses;
                        (B) the existing sentences for the offenses;
                        (C) the extent to which the value of the loss
                    caused by the offenses (as defined in the Federal
                    sentencing guidelines) is an adequate measure for
                    establishing penalties under the Federal sentencing
                    guidelines;
                        (D) the extent to which sentencing enhancements
                    within the Federal sentencing guidelines and the
                    court's authority to sentence above the applicable
                    guideline range are adequate to ensure punishment at or
                    near the maximum penalty for the most egregious conduct
                    covered by the offenses;
                        (E) the extent to which the Federal sentencing
                    guideline sentences for the offenses have been
                    constrained by statutory maximum penalties;
                        (F) the extent to which Federal sentencing
                    guidelines for the offenses adequately achieve the
                    purposes of sentencing set forth in section 3553(a)(2)
                    of title 18, United States Code;
                        (G) the relationship of Federal sentencing
                    guidelines for the offenses to the Federal sentencing
                    guidelines for other offenses of comparable
                    seriousness; and
                        (H) any other factor that the Commission considers
                    to be appropriate.

                                                     Union Calendar No. 239

    105th CONGRESS

      2d Session

                                   H. R. 2460

                              [Report No. 105-418]

    _______________________________________________________________________

                                     A BILL

        To amend title 18, United States Code, with respect to scanning
                         receivers and similar devices.

    _______________________________________________________________________

                               February 24, 1998

      Reported with an amendment, committed to the Committee of the Whole
           House on the State of the Union, and ordered to be printed

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