FBI/FCC collaborating to create software 'police state?'

By way of a posting on Bruce Schneier's security blog (one of my favorites) which came by way of News.com (I know a circuitous route):

The Federal Communications Commission thinks you have the right to use software on your computer only if the FBI approves.... According to the three-page document, to preserve the openness that characterizes today's Internet, "consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement."

What do we call this new sort of industry monopoly? FBIsoft?  Next thing ya know, they'll pass some law that can land us in jail if we play the songs we purchase on iTunes Music Store using a device that Apple doesn't approve of.  Ooops.  That law has already been passed too?! (DMCA anyone?).  [Update: OK, what if the Recording Industry Association of American bans telling friends about songs?]