Senate passes spy bill and phone immunity

By Thomas Ferraro

WASHINGTON (Reuters) - Phone companies that took part in President George W. Bush's warrantless domestic spying program would receive retroactive immunity from lawsuits under a bill approved on Tuesday by the Democratic-led Senate.

But it was unclear if the Democratic-led House of Representatives would also approve the legislation to shield firms from potentially billions of dollars in damages.

About 40 civil lawsuits have been filed accusing AT&T Inc (), Verizon Communications Inc () and Sprint Nextel Corp () of violating Americans' privacy rights in helping the government's warrantless domestic spying program started shortly after the September 11 attacks on the United States.

Passed by the Senate on a largely party line vote, the bill would replace a temporary spy law set to expire this week that expanded the power of U.S. authorities to track enemy targets without a court order.

In addition, the Senate bill would bolster the protection of privacy rights of law-abiding Americans swept up in the hunt for suspected terrorists.

"I don't know what they (House Democrats) are going to do," said Sen. Kit Bond, a Missouri Republican and a chief sponsor of the bill. "I hope they pass it."

If the House rejects or fails to quickly pass the measure, the temporary law would expire on Saturday.

One option would be to approve a short-term extension of the law, as Congress and Bush did last month, to provide more time to resolve their differences.