[House Report 105-418]
[From the U.S. Government Publishing Office]
105th Congress Report
2d Session HOUSE OF REPRESENTATIVES 105-418
_______________________________________________________________________
WIRELESS TELEPHONE PROTECTION ACT
_______
February 24, 1998.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. McCollum, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 2460]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 2460) to amend title 18, United States Code, with respect
to scanning receivers and similar devices, having considered
the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
CONTENTS
Page
The Amendment.................................................... 1
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Hearings......................................................... 6
Committee Consideration.......................................... 6
Vote of the Committee............................................ 6
Committee Oversight Findings..................................... 6
Committee on Government Reform and Oversight Findings............ 6
New Budget Authority and Tax Expenditures........................ 6
Congressional Budget Office Estimate............................. 6
Constitutional Authority Statement............................... 8
Section-by-Section Analysis and Discussion....................... 8
Agency Views..................................................... 10
Changes in Existing Law Made by the Bill, as Reported............ 11
The amendment is as follows:
Strike out all after the enacting clause and insert in
lieu thereof 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 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; 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) 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.
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. 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 has 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 No. 103-414) 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 Committee 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 the Committee is generally 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 of 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. While 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 person under contract 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,
agents, or contractors of companies that actually
owncommunications 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 their property
or legal rights of the carriers.
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 would 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.
Hearings
The Committee's Subcommittee on Crime held a hearing on the
subject of cellular telephone fraud on September 11, 1997. The
Subcommittee held no hearings on H.R. 2460.
Committee Consideration
On October 9, 1997, the Subcommittee on Crime met in open
session and ordered reported favorably the bill, H.R. 2460, by
a voice vote, a quorum being present. On October 29, 1997, the
Committee met in open session and ordered reported favorably
the bill, H.R. 2460, without amendment by voice vote, a quorum
being present. At the direction of the Committee, the staff was
directed to make technical and conforming changes in the bill
which are incorporated in the amendment in the nature of a
substitute reported.
Vote of the Committee
There were no recorded votes on the bill H.R. 2460.
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Committee on Government Reform and Oversight Findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
Clause 2(l)(3)(B) of House rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 2(l)(3)(C) of rule XI of the
Rules of the House of Representatives, the Committee sets
forth, with respect to the bill, H.R. 2460, the following
estimate and comparison prepared by the Director of the
Congressional Budget Office under section 403 of the
Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 31, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary, House of Representatives,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2460, the Wireless
Telephone Protection Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark
Grabowicz.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
Enclosure.
H.R. 2460--Wireless Telephone Protection Act
CBO estimates that enacting H.R. 2460 will have a small
impact on discretionary spending over the next five years. In
addition, the bill could lead to increases in both direct
spending and receipts, but the amounts involved would be less
than $500,000 a year. Because the bill could affect direct
spending and receipts, pay-as-you-go procedures would apply.
H.R. 2460 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act of 1995
and would impose no costs on state, local, or tribal
governments.
H.R. 2460 would make it easier for United States attorneys
to prosecute certain fraud offenses involving wireless
telephones. The bill also would direct the United States
Sentencing Commission to review the federal sentencing
guidelines for wireless telephone fraud.
Enacting H.R. 2460 could increase the number of successful
prosecutions against perpetrators of wireless telephone fraud.
In turn, collections of criminal fines could increase, but we
estimate that any increase would be less than $500,000
annually. Criminal fines are deposited in the Crime Victims
Fund and spent the following year. Thus, any change in direct
spending would match the increase in revenues with a one-year
lag.
Any increase in convictions in fraud cases would result in
additional federal costs, subject to the availability of
appropriations, to accommodate more prisoners. Prison costs
would also rise if the U.S. Sentencing Commission elects to
enhance prison sentences for wireless telephone fraud, as
allowed by the bill. CBO cannot predict the effect of H.R. 2460
on conviction rates or the actions of the U.S. Sentencing
Commission, but any increase in discretionary spending over the
next five years is likely to be small.
The CBO staff contact for this estimate is Mark Grabowicz.
This estimate was approved by Paul N. Van de Water, Assistant
Director for Budget Analysis.
Constitutional Authority Statement
Pursuant to Rule XI, clause 2(l)(4) of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, section 8 of the Constitution.
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 software with the
knowledge that it had been configured for altering or modifying
a telecommunications instrument so that the instrument could be
used to obtain unauthorized access to telecommunications
services.
As amended, new subsection (a)(9) does not make it a crime
to simply possess a wireless telephone or 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
telephone or access 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 that produce
technology to sell to carriers or state and local governments
which 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 Committee
intends that the term ``telecommunications instrument'' as used
in new subsection (a)(9) will 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. The term ``telecommunication services'' should be given
the same meaning as the term ``telecommunication service''
defined in section 3 of title I of the Communications Act of
1934 (47 U.S.C. Sec. 153).
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 subsections (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 subsections. Section 2(b) of the bill eliminates this
inconsistency by clearly stating the maximum punishments which
may be imposed for 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(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 under contract with certain telecommunications carriers.
The new exception provides that it is not a violation of new
subsection (a)(9) for an officer, employee, or agent of a
facilities-based carrier, or a person under contract with a
facilities-based carrier, to use, produce, have custody or
control of, or possess hardware or software configured as
described in subsection (a)(9). Thus, these persons legally may
continue to possess and manufacture this type of hardware or
software. Additionally, these persons legally may send such
hardware or software through the mails or send or carry it in
interstate commerce.
It should be noted, however, that these actions are only
permitted under the exception if these actions were taken for
the purpose of protecting the property or legal rights of the
facilities-based carrier. The Committee intends that the phrase
``for the purpose of protecting the property or legal rights of
the carrier'' be narrowly construed. Only such actions which
might be deemed to part of the ordinary course of business of a
telecommunications carrier, such as actions involving
maintenance on or modifications to a 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 persons under contract with a
facilities-based carrier, would still violate the statute.
The Committee takes particular note of the fact that under
some circumstances a facilities-based carrier may use this
equipment to intercept signals carried on another
telecommunications carrier's system for the purpose of testing
whether customers of the one carrier 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 the Committee's understanding that, in the
past, these types of legitimate interceptions have always
occurred with the express consent of the two carriers involved.
The Committee believes that this is the appropriate practice.
Thus, the exception created by subsection (d) of the bill
should only be understood to apply to situations where the
other carrier has consented to the use of this equipment on its
system.
Section (d) of the bill also adds new paragraph (9) to
subsection (e) of section 1029 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.
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
appropriate 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. The Committee is 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 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.
Agency Views
No agency views were received with respect to the bill H.R.
2460.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman):
SECTION 1029 OF TITLE 18, UNITED STATES CODE
Sec. 1029. Fraud and related activity in connection with access devices
(a) Whoever--
(1) * * *
* * * * * * *
[(8) knowingly and with intent to defraud uses,
produces, traffics in, has control or custody of, or
possesses--
[(A) a scanning receiver; or
[(B) hardware or software used for altering
or modifying telecommunications instruments to
obtain unauthorized access to
telecommunications services, or]
(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
[(9)] (10) without the authorization of the credit
card system member or its agent, knowingly and with
intent to defraud causes or arranges for another person
to present to the member or its agent, for payment, 1
or more evidences or records of transactions made by an
access device;
shall, if the offense affects interstate or foreign commerce,
be punished as provided in subsection (c) of this section.
(b)(1) Whoever attempts to commit an offense under subsection
(a) of this section shall be [punished as provided in
subsection (c) of this section] subject to the same penalties
as those prescribed for the offense attempted.
* * * * * * *
[(c) The punishment for an offense under subsection (a) or
(b)(1) of this section is--
[(1) a fine under this title or twice the value
obtained by the offense, whichever is greater, or
imprisonment for not more than ten years, or both, in
the case of an offense under subsection (a) (2), (3),
(5), (6), (7), (8), or (9) of this section which does
not occur after a conviction for another offense under
either such subsection, or an attempt to commit an
offense punishable under this paragraph;
[(2) a fine under this title or twice the value
obtained by the offense, whichever is greater, or
imprisonment for not more than fifteen years, or both,
in the case of an offense under subsection (a) (1),
(4), (5), (6), (7), or (8) of this section which does
not occur after a conviction for another offense under
either such subsection, or an attempt to commit an
offense punishable under this paragraph; and
[(3) a fine under this title or twice the value
obtained by the offense, whichever is greater, or
imprisonment for not more than twenty years, or both,
in the case of an offense under subsection (a) of this
section which occurs after a conviction for another
offense under such subsection, or an attempt to commit
an offense punishable under this paragraph.]
(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.
* * * * * * *
(e) As used in this section--
(1) * * *
* * * * * * *
(6) the term ``device-making equipment'' means any
equipment, mechanism, or impression designed or
primarily used for making an access device or a
counterfeit access device; [and]
(7) the term ``credit card system member'' means a
financial institution or other entity that is a member
of a credit card system, including an entity, whether
affiliated with or identical to the credit card issuer,
that is the sole member of a credit card system[.];
(8) the term ``scanning receiver'' means a device or
apparatus that can be used to intercept a wire or
electronic communication in violation of chapter 119[.]
or to intercept an electronic serial number, mobile
identification number, or other identifier of any
telecommunications service, equipment, or instrument;
and
(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.
* * * * * * *
(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).