FCC Chairman Kevin Martin, in a letter to Rep. Edward Markey, D-Mass., said the agency does not have the power to subpoena information that might shed light on whether phone companies are supplying confidential information about customers to the National Security Agency.

Inside the Secret Room Courtroom Clash! A federal judge refuses to give AT&T back its internal documents, but orders the EFF not to give them out. Whistle-Blower's Precognition Years before the NSA's warrantless surveillance program made national headlines, then-AT&T technician Mark Klein suspected his company was colluding with the government to spy on Americans. The Ultimate Net Monitoring Tool A little-known company called Narus makes the packet-inspection technology said to be the basis of the NSA's internet surveillance. Here's how it works. Plus: Daily updates from 27B Stroke 6, the Wired News security and privacy blog.

"Today the watchdog agency that oversees the country’s telecommunications industry refused to investigate the nation’s largest phone companies’ reported disclosure of phone records to the NSA.

Earlier this month, USA Today reported that AT&T allegedly provided data to the NSA on the time and duration of every call made by their customers since 2001. Verizon and BellSouth have denied turning over telephone call records to the NSA. BellSouth has demanded USA Today retract claims in its story.

After the story surfaced, Markey asked the FCC to investigate, a request supported by Democratic Commissioner Michael Copps. Martin, a Bush appointee who once served on the president's election campaign, declined.

Legal analysts are divided over whether such a "data mining" program, if it actually existed, would be considered a legitimate extension of the executive branch's authority. Even if the FCC or Congress does not pursue a probe, AT&T faces a related lawsuit by the EFF.

Wired magazine posted the full text of the evidence former AT&T technician Mark Klein has presented to back up an accusation that AT&T helped the federal government spy on phone and Internet traffic.

The documents include descriptions of the fiber-optic splitters, routers and wiring Klein alleges that AT&T set up in "secret rooms" to monitor traffic across its WorldNet Internet Backbone.

The Baltimore Sun says NSA spent $1.2 Billion on their Trailblazer datamining initiative, similar to the Total Information Awareness program, with little to show for it. Newsweek reports the core of the TIA [Total Information Awareness] survives with a new codename of Topsail (minus the futures market).

Senator Wyden (D-Ore) eliminated funding for the TIA program -- which then resurfaced as The Matrix, a national datamining program for domestic police agencies. The MATRIX program floundered when it was found to be selling private information on individuals to companies (like banks) for a profit.

Confidential information shared by the state of Utah with the MATRIX super-computer database is supposed to be accessible only to law enforcement officers in their official fight against crime and terrorism. Paul Adams, West Valley City, says confidential motor vehicle data was apparently used by American Express.

"It is no coincidence that I started receiving these American Express letters in December" at the same time the state started downloading its motor vehicle records into MATRIX, said Paul Adams, a West Valley businessman and owner of a private security company.

Just before Christmas, Adams began receiving mail solicitations from American Express addressed to the Adams Family Trust at his West Valley post office box. But the Adams Family Trust is listed on no legal or financial document anywhere except for one: The title and registration of his Lincoln Mark VIII automobile, Adams said.

"The family trust is something between me and my sons for when I am gone," Adams said. "There has never been a bank account, never any court document, never a property transaction, never anything in the public record with that name on it."

That was until June 2002 when Adams first registered the car at Motor Vehicles, a division of the Utah Tax Commission. There was no correspondence addressed to the family trust of any kind until December 2003 when the American Express solicitations first began arriving.

MATRIX used Seisint, in Boca Raton, Fla., and their MetaCarta search engine hosted on supercomputers to search through billions of documents for name, place, and time reference. They were recently acquired by Lexus/Nexus.

In a series of incidents, hackers broke into Seisint's databases, gaining access to the personal data. News of the Seisint breach came just weeks after one of the company's chief rivals, ChoicePoint, confirmed that suspected criminals posing as legitimate businesses had gained access to some 145,000 of its own profiles of American consumers. Both ChoicePoint and Lexus/Nexus sell consumer data to businesses that want to carry out background checks.

Matrix also had a lot of competition from federal and regional data-sharing initiatives, including the federally funded Regional Information Sharing System, the Homeland Security Information Network, the Joint Regional Information Exchange System, and the FBI's Joint Terrorism Task Forces.

The identities of 26.5 million U.S. veterans are at risk after thieves stole electronic files from a Veterans Affairs employee's house outside Washington May 3rd. The data includes Social Security numbers and birth dates, enough information to commit fraud.

Perhaps the focus on NSA is misplaced. Commercial data warehouses could be the real threat.

• AT&T's database called Daytona can search out "data-management problems." Daytona had 312 terabytes of data — almost 2 trillion records some time ago.

• Experian and Equifax provide credit reports on over 450 million vehicles and address information for more than 20 billion promotional mail pieces to more than 100 million households every year. Equifax has records on more than 400 million credit holders worldwide and actively markets their database.

• SAIC's Automated Law Enforcement Information Access System (ALIAS), used by Washington and Oregon State Patrols, is an integrated criminal justice information system with a complete criminal history database.

• InformationWeek reported that Wal-Mart had 583 terabytes of sales data on a 1,000-processor system from NCR subsidiary Teradata. Every day, Wal-Mart adds about 1 billion data entries on every transaction at Wal-Mart stores to that database, which it analyzes to refine prices, sales and the products it puts on its shelves.

• Disney's system, run by IBM, has about 1.5 petabytes of data. A petabyte is 1,000 terabytes, or something like 250 billion pages of text.

• Fair Isaac probably has more than that. The company analyzes just about every financial transaction by just about every consumer to try to predict future financial behavior. It operates a single station in Europe that checks 1.5 billion phone calls a day for fraud in real time and can turn off a fraudulently made call in midsentence. These are more difficult computing tasks than searching call records for relationships.

• The San Diego Supercomputer Center has 1 petabyte on disk and an additional 6 petabytes on tape. Google, analysts have estimated, stores somewhere from 2 petabytes to 5 petabytes of information — and that's growing exponentially because of the huge amounts of data in the photos, video and satellite maps on the Web.