2014 -- S 2897

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LC005084

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - MOBILE TELEPHONES

     Introduced By: Senators Ruggerio, Jabour, Felag, Miller, and Goldin

     Date Introduced: April 10, 2014

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Legislative findings. The General Assembly finds and declares all of the

following:

     (a) According to the Federal Communications Commission, one in three robberies in the

United States involves 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. In New York City, the number was 20 percent, a 40 percent

increase from the year before. Recently, a half a dozen teenagers beat a 36-year-old New York

City man for his iPhone. In London, although crime overall is falling, offenses such as

pickpocketing and bag snatches have risen by more than 15 percent this year. This is mainly

driven by the theft of phones, with some 10,000 handsets stolen in the city every month.

     (e) In November, 2013, Attorney General Peter Kilmartin signed on as a member of the

nationwide initiative known as Secure Our Smartphones ("S.O.S") that encourages manufacturers

of smartphones to develop a technological means to protect smartphone users in their states by

drying up secondary markets for stolen devices and eliminate the economic incentive for theft.

     (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 general assembly to require all smartphones and other advanced

mobile communications devices offered for sale in Rhode Island to come with a technological

solution enabled, in order to deter theft and protect consumers.

     (l) It is the further intent of the general assembly 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.

     SECTION 2. Chapter 39-29 of the General Laws entitled "Wireless Telephone

Regulatory Modernization Act" is hereby amended by adding thereto the following section:

     39-29-7. Sale of advanced mobile communication devices - Hard reset required. --

(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

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those terms are defined in § 39-28-2, 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.

     (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 Rhode Island" 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 Rhode Island 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 Rhode Island 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) A provider of commercial mobile radio service or a person or retail entity selling an

advanced communications device that is sold in Rhode Island shall not charge any fee for making

the technological solution available to the end-use consumer.

     (e)(1) A person or retail entity selling an advanced communications device in Rhode

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Island in violation of subsection (b) of this section 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 Rhode Island.

     (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

subsection (c) of this section 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 Rhode Island.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - MOBILE TELEPHONES

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     This act would require that any advanced mobile communications device (smartphone)

sold in Rhode Island on or after January 1, 2015, include a technological solution that can render

the essential features of the device inoperable when the device is stolen.

     This act would take effect upon passage.

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