Keeping cellular phone calls private

January 11, 1993|By Kim Clark | Kim Clark,Staff Writer

Tinker with a police scanner or an old television, and you, too, can listen in on the cellular telephone conversations of the rich and busy -- until now.

A Towson-area company is launching sales today of a U.S.-made privacy system that promises to draw an electronic curtain against "listening Toms" who eavesdrop on the nation's 8 million cellular phone users.

The PrivaFone Corp.'s system operates using principles similar to those employed by super-secure devices issued by the National Security Agency to government employees who might make classified calls from their car phones.

Both systems scramble the cellular user's voice, then unscramble it at a central facility. There, the normal-sounding call is routed into a telephone wire -- where the only security danger is a phone tap -- and it is sent on to its destination.

But PrivaFone's decoder will be at a customer's home or business, not NSA headquarters.

And though PrivaFone's patented system isn't quite as secure, it is less bulky or expensive than the NSA equipment (which costs about $8,000 per telephone), said company President Charles M. Wistar.

Would-be eavesdroppers trying to listening in on telephone conversations of those who have PrivaFone's $2,000 system would hear only random chirps. If taped, those chirps could eventually be decoded, but only by using sophisticated computers, Mr. Wistar said.

The PrivaFone system is comparatively small, consisting of a secretary's notebook-sized scrambler for the telephone and a slightly larger decoder for the home or office.

And, Mr. Wistar believes, the Baltimore-Washington-Virginia region would be PrivaFone's hottest market, at least partly because of a recent political scandal involving an eavesdropped cellular conversation.

Virginia Sen. Charles S. Robb said last month that he expected to be indicted on charges that he obtained a tape of a cellular telephone conversation by Gov. Douglas L. Wilder regarding the two Democrats' political feud.

It is illegal to listen to cellular conversations, but there have been few prosecutions, and the practice appears to be widespread. There are even newsletters for scanners.

Mr. Wistar said he expected about 10 percent of all cellular phone users to need the privacy his company offers. His best customers would be attorneys, high-level business executives and politicians, he said.

Although companies such as AT&T offer other privacy systems, PrivaFone is the only one selling all the equipment needed to make protected telephone calls to anyone else -- including other phones without decoders, Mr. Wistar said. (AT&T's system also allows calls to people without decoders, but it permits cellular companies to charge users a monthly fee for the privacy service.)

Within a few years, Mr. Wistar projected, PrivaFone would have sales of $50 million.

To meet the expected demand, he's been hiring salespeople and managers. The company has doubled in size to 20 employees in the past few months.

In addition, the company has hired some well-known local businesspeople, including James J. Harrison, former chief financial officer of McCormick & Co. By the end of this year, Mr. Wistar expects to have a total of 30 employees and an office on the West Coast.

The 2-year-old company is a joint venture between its founders, including inventor Ray Tobias, and CyComm Inc., of Portland, Ore., which manufactures the equipment.

The company is expected to go public eventually, said J. Logan Seitz, PrivaFone's vice president for sales.

But not everybody in the industry is convinced that cellular privacy will be a hot seller.

Herschel Shosteck, a telecommunications consultant in Silver Spring, said PrivaFone's sales expectations "pass the sanity test," but he wondered whether the privacy systems would ever become widespread.

"The issue isn't whether PrivaFone's technology is unique. The issues are convenience and price," Mr. Shosteck said.

And at today's offering price, "only a very few will buy," he said.

Other companies, including Motorola, haven't yet had much success with privacy systems.

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