A secret federal court has granted law enforcement expanded surveillance authority to use the Internet, wiretaps and phone records to collect evidence against suspected terrorists and agents of espionage.

The Foreign Intelligence Surveillance Court of Review overturned a lower court ruling Monday, stating that Attorney General John Ashcroft's request for new electronic spying powers is reasonable. Civil libertarians were alarmed by the ruling, but a leading Internet trade group said ISPs shouldn't be terribly concerned just yet.

"On the surface, this does not appear to have a major impact on ISPs and other Internet providers, and there doesn't seem to be any widespread ramifications of concern at this point," says David McClure, president and CEO of the U.S. Internet Industry Association.

"But it depends on how this is implemented, if smaller ISPs had to implement new technology to comply or absorb any significant cost, or manpower requirement, then it would be a concern, and if that occurs we would have to approach the Justice Department for some kind of remedy," McClure said.

"If the FBI is asking for more information from the AOL's, Earthlink's and others, then it may become a problem because of the manpower requirements, and also the potential for the violation of subscriber agreements," added McClure.

FBI agents, as part of terrorist and spy investigations, will have wider access to monitor web site use, email traffic, and potentially instant messages, through network surveillance. If federal warrants are issued, computers would likely be captured as evidence with investigators looking to examine hard drives, and even monitor every keystroke through the use of key-logger technology.

While federal searches of ISPs and their subscribers have been relatively infrequent, companies like America Online, Earthlink are reported to have had demands for information more often since September 11, 2001. Quantum Computer Services, a free e-mail provider in Louisiana, is said to have had some Saudi Arabian accounts created, who were under investigation not only the Secret Service, but New York City investigators, as well.

The new expanded federal electronic surveillance powers coincide with a federal appeals court which Monday overturned a lower-court ruling requiring police officers to be physically present when executing a search warrant at an Internet Service Provider. The 8th Circuit Court of Appeals in St. Louis overturned a district court ruling in a Minnesota case regarding a search warrant faxed to Yahoo's Santa Clara offices in a child pornography investigation.