CALEACALEAMarket OverviewMarket Overview

Robert GoldenChief Research Officer

Merit Network

CALEA and BeyondJanuary 31, 2007

1. Lawful Interception of Digital Communications of All Types

2. Capture of Identifying Information

A. Origin B. DirectionC. Destination D. TerminationE. Date/Time

Source: Frost & Sullivan, U.S. CALEA Market Insight 6841-63, 2003

CALEA Intercept Legal Requirements

2005 Wiretaps by Type of Criminal Investigation

Source: U.S. Courts Federal & State Wiretap Reports (1997 – 2005)

81%

7%5%

2%5%

Gambling

Homicide &Assault

Narcotics

Racketeering

Other *Other*: Bribery, Kidnapping, Larceny & Theft, etc.

Categories of Surveillance

Source: U.S. Courts Federal & State Wiretap Reports (1997 – 2005)

77%

20%3%

Wire Oral Electronic

Wire - land line, cellular, cordless & mobile

Oral - microphone

Electronic - incl. computer transmissions

1997 1998 1999 2000 2001 2002 2003 2004 20050

500

1000

1500

2000

# of

Wir

etap

s

Source: U.S. Courts Federal & State Wiretap Reports (1997 – 2005)

Wiretap Growth

Growth Accelerating

Source: U.S. Courts Federal & State Wiretap Reports (1997 – 2005)

Cost of Compliance for Intercept Orders

$57,186Per Intercept

Growing 5% to 7% per year

Total Estimated Cost:

$100+ Million/Year

1. Apply an Equipment Solution to Each Piece of Equipment

(e.g. each switch)

2. Utilize a Mediation Solution that works with all network elements to provide lawful interception

3. Engage a Trusted Third Party (TTP)

Solution Options to Achieve CALEA Compliance

1. Access Function2. Delivery Function

3. Collection Function

Primary Functions to Achieve CALEA Compliance

1. Access Function defines intercept access points in the network access points can either be:

A. located at network equipment exits (routers, switches, gateways, etc.) or

B. passive probes placed strategically in the network

CALEA Functions

2. Delivery Function warrant for the target is entered here communicates with the access function provides target identifying information

A. phone numberB. IP addressC. email addressD. chat handle, etc.

CALEA Functions

2. Delivery Function (continued)

Receives intercepted traffic from all access functions in the network

Processes intercepted traffic:A. formats itB. encapsulates it according to the interface

standardsC. delivers it to law enforcement

Acts as bridge to Law Enforcement Agency

CALEA Functions

3. Collection Function (operated by LE Agency)

Application that receives intercepted traffic Complies with delivery standards Provides advanced tools for:

A. analyzing dataB. building relationships between targetsC. creating link chartsD. tracking target activities and compiling evidence

for court

CALEA Functions

Calculating the Cost

Software Cost $$ Hardware Cost $$ FTE’s Administrative Cost $$ Tech Support $$

Maintenance $$Legal $$

$$$

CALEA Costs

1. Fully Managed Service Providers (TTP) VeriSign – public key solutions (verisign.com) NeuStar – telecom directory services (neustar.biz) APOGEE – dormitory network systems (apogeenet.net)

2. System Providers Narus – software suite (used by VeriSign – narus.com) SS8 – mediation box manufacturer (SS8.com) AQSACOM – ALIS client/server platform

(aqsacomna.com) Endace – traffic monitoring and capture systems

(preparing a service solution – endace.com)

CALEA Providers

TTP Providers

Merit’s Products and Services

1. Open Source Solutions• First Tool: An Open Source Program for

Performing Access and Delivery Functions

• Available at Beginning of 2nd Qtr 2007

2. CALEA Support Services• Technical Advisory Services

• Hardware and Software Support Services

• Trusted Third Party (TTP) Services