WASHINGTON – An Obama administration proposal to increase law enforcement’s ability to listen in on electronic communications could have far-reaching implications for the future of the Internet and cellular phone service.

The FBI is working with the administration to expand greatly the government’s ability to wiretap everything from mobile phone calls to Internet chat to e-mail. A rough outline of the new surveillance program, which would be sent to Congress for approval, has filtered out to the press and has been discussed in Washington policy forums in recent weeks.

Critics say the proposal would stifle investment and innovation everywhere from mammoth telecommunications companies like AT&T and Verizon to Silicon Valley start-ups. The FBI complains that new technology is causing parts of the Internet to go dark to traditional methods of surveillance.

The likely target would be a range of relatively new services that encrypt user data from end to end, locking out law enforcement’s ability to listen in. Some of those services have familiar names: Blackberry, Skype or Google Chat.

Verizon Communications Inc.’s third-quarter earnings fell 25% as the carrier added fewer subscribers than AT&T Inc. Meanwhile AT&T Inc. added a record number of iPhone subscribers in the third quarter, but paid heavily to do so.

“The law needs to be updated as a way of ensuring that providers maintain the ability that when we do get a court order, they can affect the surveillance we’re asking for,” said Richard McNally, section chief for the FBI’s national security law branch.

The FBI is seeking to update a 1994 law – the Communications Assistance for Law Enforcement Act or Calea – that require service providers to give law enforcement more immediate access to communications over their networks or face fines.

Representatives for several telecommunications industry advocacy groups said they were not prepared to comment on a law that hasn’t been released.

“Calea originally included some money so providers could develop the things we’re looking for,” McNally said. “I think that’s the type of cooperation between the government and the private sector that is necessary now.”

But telecommunications have changed so much even in the last five years that it could prove difficult to insert a back door for eavesdropping into electronic communications.

A host of services used widely by consumers establish an encrypted connection between two users or between the user and a central server. If that server is located outside the United States, it’s unclear what authority the FBI would have to access it.

In many cases, the back door would insert a vulnerability into secure systems, making it less safe and more accessible to hackers. For some services, allowing law enforcement to access user data would fundamentally alter the way a service works. Users’ e-mails, conversations and data would have to be funneled through a central server instead of going directly from peer to peer.

These encrypted peer-to-peer connections are the most likely target of the new administration proposal.

Sascha Meinrath, director of the Open Technology Initiative at the New America Foundation, a non-profit public policy think tank, said the type of encryption used by Research in Motion, which makes the Blackberry, to protect users’ electronic communication would likely grow in popularity and extend to encryption of voice communications as well.

“As we end up with smarter phones, you’re going to see a whole new generation of technologies that encrypt end to end,” Meinrath said.

Communications infrastructure used by even the largest companies, like Verizon or AT&T, will begin to resemble encrypted Internet communications and shift away from a telephone infrastructure that is already in its waning years, Meinrath said.

“What I surmise is this is about creating backdoors that can allow for instantaneous surveillance of (this type of) communications,” he said.

The stalwarts of the communications industry may not be the only ones affected.

Greg Nojeim, senior counsel for the Project on Freedom, Security and Technology, said that law enforcement efforts could wreak havoc on innovation.

“We’re talking about telling the guy who’s building the next great application in his garage or dorm room that he has to build a vulnerability, a backdoor, a way for the FBI to get in,” Nojeim said. “I’m not sure that’s what we want to be telling that guy.”