Mrs. M. - The regulations you are describing concern telecommunications (phone conversations). While it may be argued that these laws are applicable to the 'spy phone' modification, it could also be said that the 'conversation' is taking place with only one participant (the owner of the phone, who would be calling his own cell phone). The 'background' conversations heard over this connection would probably fall into a totally different law; presumably the one that covers recording of persons in public (there are release forms for this situation on several of the photography websites - goes along with taking pictures of people in public). The 'spy phone' modification is akin to those tiny little cameras that people are using to monitor thier babysitter ... and probably has varying regulations from state to state.