WASHINGTON - President Obama on Friday will create a panel to examine how data-collection efforts like the National Security Agency's spy programs affect Internet companies and privacy rights, said two people with knowledge of White House deliberations.
Microsoft, Yahoo and Facebook have lobbied Obama to be able to disclose details about government orders for customer data and the number of user accounts affected.
It's unclear whether Obama will grant that request. Both people asked not to be named because they weren't authorized to discuss the decisions.
Revelations about the extent of NSA spying have "created a crisis of confidence" when it comes to users trusting U.S. Internet companies and undermines potential economic growth, said Kevin Bankston, policy director for the Washington-based Open Technology Institute.
The government's collection and storage of phone and Internet data have been among the most contentious issues following disclosure of the NSA's surveillance programs by former government contractor Edward Snowden.
Obama is expected to leave the phone and Internet data collection largely in place when he announces Friday some changes to the programs — and punts difficult issues to Congress and advisory panels.
Secret programs leaked
Snowden exposed a program under which the NSA compels Internet companies through court orders to provide customer e-mails and other Internet activity. The companies are prohibited from disclosing the orders.
Documents he leaked also showed the NSA spied on foreign leaders, hacked into fiber-optic cables to get data from Google Inc. and Yahoo, and intercepted Americans' communications without warrants.
AOL and Microsoft had no comment on Obama's NSA plan. Several technology companies that set up a website urging changes to U.S. surveillance are expected to make a joint response Friday.
A White House advisory panel recommended in a report last year that Internet companies be permitted to disclose the data. Obama has already rejected some of the panel's other recommendations.
He also won't call for ending the NSA's ability to collect bulk metadata, such as phone records, according to a person familiar with the plans.
In a victory for Verizon Communications and AT&T, Obama plans to let the NSA keep bulk phones records instead of requiring the telecommunications companies to store the data. He will ask Congress to decide the matter.
"What matters is not so much the fact that they won't be required to hold those records, but rather just to be out from any kind of requirement one way or another," said Charles Golvin, a technology industry analyst. "That's a big win for the carriers."
Congressional leaders are divided on the phone record issue, raising the possibility they won't pass legislation.
Sen. Dianne Feinstein, D-Calif., wants the data programs to continue without forcing companies to collect and keep the records. She said it would cost U.S. carriers as much as $60 million a year.
Congress plans constraints
Sen. Patrick Leahy, D-Vt., and Rep. James Sensenbrenner, R-Wis., have introduced legislation to bar the NSA from collecting the phone records.
The NSA, or the FBI, would have to get a court order on a case-by-case basis to seek records from the phone companies under the bill.
Civil liberties advocates said that they're prepared to take their fight to Congress if Obama doesn't announce significant reforms.
"It is impractical to presume the executive branch will hold itself fully accountable," said Angela Canterbury of the Washington-based nonprofit Project on Government Oversight and Accountability.
It will be "a failure" if Obama doesn't adopt a recommendation that the NSA's collection of metadata be stopped, said Michelle Richardson, legislative counsel of the ACLU.
"That will be the true test about whether he is sufficiently dealing with this," she said.
