Phone and Internet consumers could be cheated out of next-generation services and hit with higher rates as telephone companies scramble to make their lines wiretap-friendly for the FBI by the end of the month.

Under a 1994 law, the Federal Communications Commission requires carriers--including wireless services--to bring their voice-surveillance capabilities up to scratch with FBI rules. The clock is ticking for the telcos, which have until June 30 to upgrade their switches to give the FBI access to extract dialed numbers and conversations.

Despite the half billion dollars Congress set aside to offset costs, many telecom companies say obeying the Communications Assistance for Law Enforcement Act--CALEA--is still an expensive endeavor, one that might harm consumer confidence and cause rate hikes.

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