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Spying: Obama Announces NSA Reforms
President Barack Obama has said he is ordering a "transition" that will end the US government's bulk collection of phone metadata "as it currently exists".
Mr Obama announced the change following a months-long review spurred by former National Security Agency analyst Edward Snowden's leaks about secret surveillance programmes.
"Effective immediately, we will only pursue phone calls that are two steps removed from a number associated with a terrorist organisation instead of three," the president said.
He also said he instructed the intelligence community to develop options for a new approach that can match the capabilities of the existing surveillance programme without the government holding onto the metadata.
Mr Obama said he requested the intelligence community and Attorney General Eric Holder to submit their proposals before the programme comes up for reauthorisation on March 28.
"The reforms I'm proposing today should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe," Mr Obama said.
The president also warned that the transition would "not be simple".
He said the surveillance review panel's recommendation that data providers or a third party be responsible for holding the bulk data presented potential risks.
"Relying solely on the records of multiple providers, for example, could require companies to alter their procedures in ways that raise new privacy concerns," he said.
Mr Obama also announced on Friday a new directive banning US government spying on dozens of foreign heads of state and governments considered to be US allies.
He said the "leaders of our close friends and allies deserve to know that if I want to learn what they think about an issue, I will pick up the phone and call them, rather than turning to surveillance".
The president's speech comes amid a furore over US surveillance practises, first brought to light by Snowden last year.
Mr Obama only briefly mentioned the former NSA security contractor in his speech on Friday.
"The sensational way in which these disclosures have come out has often shed more heat than light, while revealing methods to our adversaries that could impact our operations in ways that we may not fully understand for years to come," he said.
While the president has said he welcomed the review of the nation's sweeping surveillance programmes, it is all but certain the study would not have happened without the leaks.
Snowden, currently living in Russia where he was granted temporary asylum, faces espionage charges in the US.
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