Draft legislation to impose fines on companies that refuse to provide wiretap facilities to US federal agents is in the planning stages, government officials have told the Washington Post under condition of anonymity.

Initial plans are for an automatic fine for refusal in the range of tens of thousands of dollars, an amount that would escalate over time. After 90 days, a judicial review would be held which could double the monetary reparations and possibly impose extra charges.

"The importance to us is pretty clear," FBI general counsel Andrew Weissmann told the American Bar Association last month. "We don't have the ability to go to court and say, 'We need a court order to effectuate the intercept.' Other countries have that. Most people assume that's what you're getting when you go to a court."

The proposals being prepared by a government taskforce do appear to exempt smaller companies (although that's a worryingly vague term), and doesn't mandate the method for gaining the information required – that would be left up to the companies concerned to provide if they comply.

Federal forces protest that they have been outfoxed by moves such as the shift to https and messaging encryption, and rules are needed to ensure they get the data they claim to need promptly. While Congress dilly-dallies on the issue, it appears that the Obama administration is going to throw its own proposals into the ring.

Different companies have different rules for dealing with federal inquires for data. Google has kickstarted a trend for transparency in this area by reporting all such investigations, and Twitter and even Microsoft are now doing the same. According to The Internet Association, which represents Google and others in the field, these new proposals aren't acceptable.

"A wiretap mandate for the Internet is dead on arrival," Michael Beckerman, CEO of TIA told The Hill. "The Department of Justice has not made the case for granting law enforcement broad new powers over Internet companies for purposes of new wiretap authority. There are a number of serious unintended consequences with this flawed proposal."

There's also the privacy angle to consider. The US House of Representatives may have passed CISPA, but that bill appears to be stymied in the Senate (which is looking to extend email privacy) and by the White House. Everyone agrees something needs to be done – just not how to do it and who should take the credit.

It's easy to see why the big technology firms are increasingly getting behind CISPA, with legislation like this being considered. Faced with the choice of handing over data with full legal indemnity compared to large fines for not doing so, it's clear which way most firms will jump.

No timescale for the legislation has been given, but it is going to cause concern across a whole range of technology companies. While this legislation is billed as going after the biggest firms, there's mission-creep to consider, and smaller ISPs could face the prospect of being bankrupted for refusing to cooperate.

"Today, if you're a tech company that's created a new and popular way to communicate, it's only a matter of time before the FBI shows up with a court order to read or hear some conversation," said Michael Sussmann, a former federal prosecutor and now a technology lawyer. "If the data can help solve crimes, the government will be interested."

It's no wonder that so may cloud providers are now promoting the fact that their data centers aren't in the US. ®