'You don't want a police state.

Crime is crime, but that doesn't mean you can have a law making everyone keep their curtains up to help the police.' So said Esther Dwyer, adviser to US President Bill Clinton and head of the Internet Corporation for Assigned Names and Numbers (ICANN), which sets policy for Internet infrastructure, in response to questions about the UK's Regulation of Investigatory Powers Bill (RIP).To the alarm of civil liberties groups and others, the RIP will give law enforcement agencies extensive surveillance powers over Internet traffic, including the ability to compel the disclosure of encryption keys.

The comments from Ms Dwyer, the so-called grandmother of the Internet, were seized on by RIP opponents as an authoritative seal of disapproval.Introduced to the House of Commons on 9 February this year, the RIP is expected to become law on 9 October.

Essentially, the Bill extends existing powers of surveillance by law enforcement agencies on telecommunications, under the Interception of Communications Act 1985, to cover Internet communicatons.The need for legislation to cover this area is recognised -- the Internet Service Providers Association says it is 'unopposed, in principle, to interception'.

After the recent conviction of nail bomber David Copeland, who downloaded bomb-making information from the Internet, the Internet's use as a potential conduit for terrorist and criminal activity is clear.Less clear are the means and extent of communications interception and the vexed question of costs.

Hertfordshire sole practitioner Nicholas Bohm, a corporate and IT specialist who acts for Internet service providers (ISPs), says that many of his clients are 'firmly resisting interception.

The government is imposing serious costs upon them which it is not willing to share.

I think that many in the ISP industry are contemplating non-co-operation'.To such critics, Home Secretary Jack Straw and his junior minister Charles Clarke have repeated the mantra: the Bill is about 'helping the government fulfil one of its primary responsibilities -- ensuring that the UK is a safe place for everyone to live and work'.But the Bill's critics -- an unlikely alliance of ISPs, civil liberties groups and peers -- say that it is badly drafted, imposes unreasonable costs on ISPs, and is a potential threat to civil liberties.

According to Rupert Chandrani, an IT lawyer at City firm Theodore Goddard, the RIP is 'as if someone was able to go through your house'.

He thinks it will dent public confidence in e-commerce.Human rights group Amnesty International says the Bill could have a chilling effect on freedom of expression and association.

Both Amnesty and civil liberties group Liberty have expressed concern about 'overbroad' definitions.

In most cases, interception will require an authorising warrant on grounds of national security and economic well-being.

Liberty says that it regards these terms as vague and subjective, concluding that 'subject only to certain well-defined exceptions, prevention or detection of serious crime should be the sole ground for authorising interception'.The Bill's definition of serious crime includes 'a group of individuals in pursuit of a common purpose', without specifying that purpose.

This could extend surveillance to participants involved in any collective activities, such as industrial actions and organised protests.

This, according to Liberty, would prevent them from exercising their right to freedom of association under the Human Rights Act 1998, which like the RIP comes into force in October.Under the RIP, interception warrants would be signed by the Secretary of State, rather than a member of the judiciary as is currently the case with telecommunications interception.

Labour peer Lord Bassam recently noted that the European Commission of Human Rights has declared its confidence in the existing system.Amnesty spokesman Brendan Paddy adds: 'We don't think it's proper that a politician be given a quasi-judicial role.

It leaves the surveillance system open to allegations of abuse and manipulation.' By comparison, legislation currently on the drawing board in the US would require law enforcement agents to demonstrate their need to intercept e-mail, for prevention or detection of crime, to federal magistrates, who would then sign interception warrants.There is also the question of indiscriminate 'trawling' of communications, which is currently authorised for telecommunications by the Interception of Communications Act by certificated warrants.

Under the Act, warrants may only apply to external communications -- which, in the case of telephone calls, are easily distinguishable from internal ones.

The RIP would extend similar powers to Internet communications.But in the context of the Internet, these distinctions become difficult to sustain: even an 'internal' e-mail between two people in the UK might be routed via one of several paths outside the country before reaching a recepient's mailbox.

Caspar Bowden, director of public policy pressure group the Foundation for Information Policy Research, says the danger is that 'this procedure could in practice become a routine way of performing mass surveillance on domestic Internet communications'.Another aspect of the RIP that gives human rights lawyers cause for concern is a provision that grants the authorities powers to compel the disclosure of keys (passwords) to enable intelligence and law enforcement officials to read encrypted communications.Amnesty says this might amount to an invasion of privacy under the European Convention on Human Rights.

The Bill also contains a proposed penalty of two years' imprisonment for someone who fails to provide a key and who cannot prove 'on the balance of probabilities' that they have forgotten it.

This, it is claimed, amounts to a reversal of the burden of proof on to the accused.Although the eventual shape of the Bill is unclear at present after a series of defeats in the House of Lords, Amnesty's Brendan Paddy says it is so 'fundamentally flawed' that it should be withdrawn: 'Amending here and there won't remedy the underlying faults.'Under the legislation, ISPs will shoulder at least some of the cost of installing interception capability -- a Home Office-commissioned report put implementation costs at £113, 300 for a large ISP and £44,700 for a smaller ISP in the first year.

Recently, the House of Lords approved an amendment to the Bill obliging the government to reimburse ISPs a fair amount of the costs of installing intercept capability.Charles Clarke has said that the regulatory regime introduced by the RIP 'provides a level playing field for all those involved in supplying communications services'.

According to him, it makes ISPs subject to the same requirements as those providing telephone services now.Robert Carolina, commercial technology lawyer at City law firm Tarlo Lyons, does not agree with this analogy.

'Developing and installing interception capability is an exercise the big telecoms [companies] have been undertaking for a while now.

Providing this for ISPs is a completely new area.

The companies I act for have two concerns: will the cost of implementing the RIP will be fair, and will this reduce customers' confidence? There seems to be a real tension between the RIP and the government's stated intentions of making the UK a centre of e-commerce.'Already, rumblings of discontent are being heard from the UK Internet industry -- a possible premonition of things to come.

UK-based ISPs Claranet and Poptel announced recently that unless the RIP is withdrawn or substantially changed, they will move their servers outside the UK.One place where ISPs in search of less stringent interception laws might relocate is Ireland.

Ireland's e-commerce bill, passed on 3 July, does not require the surrender of encryption keys to law enforcement agencies.

Rupert Chandrani thinks that other countries drafting equivalent legislation 'will follow the Irish model' rather than our own: 'The RIP will seriously dent public confidence in e-commerce.

Even though it's been in the offing for four years, it was still drafted without real consideration for the Internet industry.'Mr Chandrani is pessimistic about revising the Bill by amendments: 'The Bill needs a lot more changes, but it is unlikely there will be many.

Most MPs don't understand it themselves, and they aren't prepared to put their careers on the line for something that most of their constituents haven't even heard of.'So does anyone have a good word to say about the Bill? Robert Carolina says: 'I would give the RIP relatively high marks on the human rights front.

The government has consulted with relevant bodies to a greater extent than with previous legislation of this type.

And in terms of regulating interception of communications on private networks, I would even say it goes too far in response to the European Court of Human Rights' criticisms.

But on the concerns of the e-commerce community, I'd rate it pretty low.'A Home Office spokesman insists that 'the government has no intention of imposing any burden' on ISPs, although, he admits, 'no commitments have been made, but the government will be looking closely at the costs issue'.On civil liberties implications, he is more blunt: 'I'm not surprised that plenty of lawyers and many others aren't enthusiastic about the Bill.

People don't like the idea of being spied on.

But surveillance has to happen, for very good reasons.'In response to this, Robert Carolina notes: 'When you're a hammer everything else looks like a nail.

It's like that with the security services; they see a need -- to get the information they require -- but they aren't thinking outside the parameters of those needs.'