BILL NUMBER: SB 962	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Leno
   (Principal coauthor: Assembly Member Skinner)

                        FEBRUARY 6, 2014

   An act to add Section 22761 to the Business and Professions Code,
relating to mobile communications devices.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 962, as introduced, Leno. Advanced mobile communications
devices.
   Existing law regulates various business activities and practices,
including the sale of telephones.
   This bill would require that any advanced mobile communications
device, as defined, that is sold in California on or after January 1,
2015, include a technological solution, which may consist of
software, hardware, or both software and hardware, that can render
inoperable the essential features of the device, as defined, when the
device is not in the possession of the rightful owner. The bill
would require that the technological solution be able to withstand a
hard reset, as defined. The bill would prohibit the sale of an
advanced mobile communications device in California without the
technological solution being enabled, but would authorize the
rightful owner to affirmatively elect to disable the technological
solution after sale. The bill would prohibit a provider of commercial
mobile radio service, as defined, from including any term or
condition in a service contract with an end-use consumer with an
address within the state that requires or encourages the consumer or
rightful owner to disable the technological solution that renders the
consumer's smartphone or other advanced communications device
useless if stolen. The bill would make a violation of the bill's
requirements subject to a civil penalty of not less than $500, nor
more than $2,500, for each violation.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) According to the Federal Communications Commission, one in
three robberies in the United States involve the theft of a mobile
communications device, making it the number one property crime in the
country. Many of these robberies often turn violent with some
resulting in the loss of life.
   (b) Consumer Reports projects that 1.6 million Americans were
victimized for their smartphones in 2012.
   (c) According to the New York Times, 113 smartphones are lost or
stolen every minute in the United States.
   (d) According to the Office of the District Attorney for the City
and County of San Francisco, in 2012, more than 50 percent of all
robberies in San Francisco involved the theft of a mobile
communications device.
   (e) Thefts of smartphones in Los Angeles increased 12 percent in
2012, according to the Los Angeles Police Department.
   (f) According to press reports, the international trafficking of
stolen smartphones by organized criminal organizations has grown
exponentially in recent years because of how profitable the trade has
become.
   (g) Replacement of lost and stolen mobile communications devices
was an estimated thirty-billion-dollar ($30,000,000,000) business in
2012 according to studies conducted by mobile communications security
experts. Additionally, industry publications indicate that the four
largest providers of commercial mobile radio services made an
estimated seven billion eight hundred million dollars
($7,800,000,000) from theft and loss insurance products in 2013.
   (h) Technological solutions that render stolen mobile
communications devices useless already exist, but the industry has
been slow to adopt them.
   (i) In order to be effective, these technological solutions need
to be ubiquitous, as thieves cannot distinguish between those mobile
communications devices that have the solutions enabled and those that
do not. As a result, the technological solution should be able to
withstand a hard reset or operating system downgrade, and be enabled
by default, with consumers being given the option to affirmatively
elect to disable this protection.
   (j) Manufactures of advanced mobile communications devices and
commercial mobile radio service providers have a responsibility to
ensure their customers are not targeted as a result of purchasing
their products and services.
   (k) It is the intent of the Legislature to require all smartphones
and other advanced mobile communications devices offered for sale in
California to come with a technological solution enabled, in order
to deter theft and protect consumers.
   (l) It is the further intent of the Legislature to prohibit any
term or condition in a service contract between a customer and a
commercial mobile radio service provider that requires or encourages
the customer to disable the technological solution that renders the
customer's smartphone or other advanced communications device useless
if stolen.
  SEC. 2.  Section 22761 is added to the Business and Professions
Code, to read:
   22761.  (a) For purposes of this section, the following terms have
the following meanings:
   (1) "Advanced mobile communications device" means an electronic
device that is regularly hand held when operated that enables the
user to engage in voice communications using mobile telephony
service, Voice over Internet Protocol, or Internet Protocol enabled
service, as those terms are defined in Sections 224.4 and 239 of the
Public Utilities Code, and to connect to the Internet, and includes
what are commonly known as smartphones and tablets.
   (2) "Commercial mobile radio service" means "commercial mobile
service," as defined in subsection (d) of Section 332 of Title 47 of
the United States Code and as further specified by the Federal
Communications Commission in Parts 20, 22, 24, and 25 of Title 47 of
the Code of Federal Regulations, and includes "mobile satellite
telephone service" and "mobile telephony service," as those terms are
defined in Section 224.4 of the Public Utilities Code.
   (3) "Essential features" of an advanced mobile communications
device include the ability to use the device for voice communications
and the ability to connect to the Internet, including the ability to
access and use mobile software applications commonly known as "apps."

   (4) "Hard reset" means the restoration of an advanced mobile
communications device to the state it was in when it left the
factory, and refers to any act of returning a device to that state,
including processes commonly termed a factory reset or master reset.
   (5) "Sold in California" means that the advanced mobile
communications device is sold at retail, and not for resale, from a
location within the state, or the advanced mobile communications
device is sold and shipped to an end-use consumer at an address
within the state.
   (b) (1) Any advanced mobile communications device that is sold in
California on or after January 1, 2015, shall include a technological
solution that can render the essential features of the device
inoperable when the device is not in the possession of the rightful
owner. A technological solution may consist of software, hardware, or
a combination of both software and hardware, but shall be able to
withstand a hard reset. No advanced mobile communications device may
be sold in California without the technological solution enabled.
   (2) The rightful owner of an advanced mobile communications device
may affirmatively elect to disable the technological solution after
sale. However, the physical acts necessary to disable the
technological solution may only be performed by the end-use consumer
or a person specifically selected by the end-use consumer to disable
the technological solution and shall not be physically performed by
any retail seller of the advanced mobile communications device.
   (c) A provider of commercial mobile radio service shall not
include a term or condition in a service contract with an end-use
consumer with an address within the state that requires or encourages
the consumer or rightful owner to disable the technological solution
that renders the consumer's smartphone or other advanced
communications device useless if stolen.
   (d) (1) A person or retail entity selling an advanced
communications device in California in violation of subdivision (b)
shall be subject to a civil penalty of not less than five hundred
dollars ($500), nor more than two thousand five hundred dollars
($2,500), per device sold in California.
   (2) A provider of commercial mobile radio service that includes a
term or condition in a service contract with an end-use consumer with
an address within the state in violation of subdivision (c) shall be
subject to a civil penalty of not less than five hundred dollars
($500), nor more than two thousand five hundred dollars ($2,500), per
service contract with an end-use consumer with an address within
California.