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As a general rule, intelligence agencies in this country draw the line at the border. The FBI, with the proper warrant, can collect information on people in the U.S. The CIA and National Security Agency are banned from collecting information on Americans inside the continental U.S. Instead, they are supposed to focus overseas, though there are exceptions to that. For example, the agencies can say that they thought the connection was foreign. The squishiness of the rules has long worried privacy advocates.

"For example, right now it is perfectly legal, without question, for the government to collect every telephone call, every e-mail, every communication in the world — as long as it can claim credibly some part of the communication contains a person outside the United States," says Fred Cate, the director of the Center for Applied Cybersecurity Research at Indiana University. "And that's a problem."