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SB-460 Communications: broadband Internet access service.(2017-2018)

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Date Published: 01/22/2018 01:55 PM
SB460:v96#DOCUMENT

Amended  IN  Senate  January 22, 2018
Amended  IN  Senate  January 12, 2018
Amended  IN  Senate  January 03, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 460


Introduced by Senator De León

February 16, 2017


An act to add Division 2.6 (commencing with Section 5980) to the Public Utilities Code, relating to the Internet, and declaring the urgency thereof, to take effect immediately. Chapter 3.5 (commencing with Section 1775) to Title 1.5 of Part 4 of Division 3 of the Civil Code, and to add Chapter 3.51 (commencing with Section 12121) to Part 2 of Division 2 of the Public Contract Code, relating to the Internet.


LEGISLATIVE COUNSEL'S DIGEST


SB 460, as amended, De León. Guidelines: Communications: broadband Internet access service.
(1) Existing law, the Consumers Legal Remedies Act, makes unlawful certain unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer. Existing law authorizes any consumer who suffers damages as a result of the use or employment by any person of a method, act, or practice declared to be unlawful, as described above, to bring an action against that person to recover or obtain damages, restitution, an order enjoining the methods, acts, or practice, or any other relief the court deems proper.
This bill would revise the act to prohibit specified actions by an Internet service provider, as defined, that provides broadband Internet access service, as defined, and make a violation of those prohibitions subject to the remedies available pursuant to the act.
(2) Existing law generally governs the state procurement of materials, supplies, equipment, and services, and the acquisition of electronic data-processing and telecommunications goods and services.
This bill would prohibit a state agency from contracting with an Internet service provider for the provision of broadband Internet access service unless that provider certifies under penalty of perjury that it will not engage in specified activities. Because the bill would expand the crime of perjury, the bill would impose a state-mandated local program.
(3) This bill would include legislative findings and declarations and be known as the California Internet Consumer Protection and Net Neutrality Act of 2018.
(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

(1)Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations. Pursuant to its existing authority, the commission supervises administration of the state’s telecommunications universal service programs. The Digital Infrastructure and Video Competition Act of 2006 establishes a procedure for the issuance of state franchises for the provision of video service, defined to include cable service and open-video systems, administered by the commission.

This bill would, except as provided, prohibit Internet service providers in the state from taking certain actions regarding the accessing of content on the Internet by end users. The bill would require the commission to adopt an order that, among other things, identifies and specifies this state government’s role as an Internet customer and uses that customer power to ensure implementation of the bill’s provisions, establishes statewide consumer protection rules, ensures that public purpose program funding is expended in a manner that will maximize Internet neutrality and ensure the fair distribution of services to low-income individuals and communities, and establishes a process whereby an Internet service provider in California is required to certify to the commission that it is providing broadband Internet access service in accordance with the provisions of the bill.

(2)Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because a violation of an order or decision of the commission implementing this act’s requirements would be a crime, this bill would impose a state-mandated local program by creating a new crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

Vote: TWO_THIRDSMAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares that the Federal Communications Commission has repealed net neutrality rules intended to protect consumers and to ensure fair and reasonable access to the Internet.
(b) It is the intent of this act to ensure that corporations do not impede competition or engage in deceptive consumer practices, and that they offer service to residential broadband Internet customers on a nondiscriminatory basis.
(c) This act shall be known, and may be cited, as the California Internet Consumer Protection and Net Neutrality Act of 2018.

SEC. 2.

 Chapter 3.5 (commencing with Section 1775) is added to Title 1.5 of Part 4 of Division 3 of the Civil Code, to read:
CHAPTER  3.5. Internet Neutrality

1775.
 For purposes of this chapter, the following definitions apply:
(a) “Broadband Internet access service” means a mass-market retail service by wire or radio in California that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service. “Broadband Internet access service” also encompasses any service in California that provides a functional equivalent of that service or that is used to evade the protections set forth in this chapter.
(b) “Edge provider” means any individual or entity in California that provides any content, application, or service over the Internet, and any individual or entity in California that provides a device used for accessing any content, application, or service over the Internet.
(c) “Internet service provider” means a business that provides broadband Internet access service to an individual, corporation, government, or other customer in California.
(d) “Paid prioritization” means the management of an Internet service provider’s network to directly or indirectly favor some traffic over other traffic, including through the use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (1) in exchange for consideration, monetary or otherwise, from a third party, or (2) to benefit an affiliated entity.

1776.
 It shall be unlawful for an Internet service provider that provides broadband Internet access service to engage in any of the following activities:
(a) Blocking lawful content, applications, services, or nonharmful devices, subject to reasonable network management practices.
(b) Impairing or degrading lawful Internet traffic on the basis of Internet content, application, or service, or use of a nonharmful device, subject to reasonable network management practices.
(c) Engaging in paid prioritization, or providing preferential treatment of some Internet traffic to any Internet customer.
(d) Unreasonably interfering with, or unreasonably disadvantaging, either a customer’s ability to select, access, and use broadband Internet access service or lawful Internet content, applications, services, or devices of the customer’s choice, or an edge provider’s ability to make lawful content, applications, services, or devices available to a customer.
(e) Engaging in deceptive or misleading marketing practices that misrepresent the treatment of Internet traffic or content to its customers.
(f) Advertising, offering for sale, or selling broadband Internet access service without prominently disclosing with specificity all aspects of the service advertised, offered for sale, or sold.

1777.
 (a) A violation of this chapter shall be subject to the remedies and procedures established pursuant to Chapter 4 (commencing with Section 1780).
(b) This chapter does not preclude enforcement of the rights specified herein under Chapter 5 (commencing with Section 17200) of Part 2 of, or Article 1 (commencing with Section 17500) of Chapter 1 of Part 3 of, Division 7 of the Business and Professions Code.

SEC. 3.

 Chapter 3.51 (commencing with Section 12121) is added to Part 2 of Division 2 of the Public Contract Code, to read:
CHAPTER  3.51. Internet Neutrality

12121.
 For purposes of this chapter, the following definitions apply:
(a) “Broadband Internet access service” means a mass-market retail service by wire or radio in California that provides the capability to transmit data to and receive data from all or substantially all Internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service. “Broadband Internet access service” also encompasses any service in California that provides a functional equivalent of that service or that is used to evade the protections set forth in this chapter.
(b) “Edge provider” means any individual or entity in California that provides any content, application, or service over the Internet, and any individual or entity in California that provides a device used for accessing any content, application, or service over the Internet.
(c) “Internet service provider” means a business that provides broadband Internet access service to an individual, corporation, government, or other customer in California.
(d) “Paid prioritization” means the management of an Internet service provider’s network to directly or indirectly favor some traffic over other traffic, including through the use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (1) in exchange for consideration, monetary or otherwise, from a third party, or (2) to benefit an affiliated entity.

12122.
 No state agency may contract with an Internet service provider for the provision of broadband internet access service unless that provider certifies, under penalty of perjury, that it will not engage in any of the following activities:
(a) Blocking lawful content, applications, services, or nonharmful devices for any customer, subject to reasonable network management practices.
(b) Impairing or degrading lawful Internet traffic on the basis of Internet content, application, or service for, or use of a nonharmful device by, any customer, subject to reasonable network management practices.
(c) Engaging in paid prioritization, or providing preferential treatment of some Internet traffic to any Internet customer.
(d) Unreasonably interfering with, or unreasonably disadvantaging, either a customer’s ability to select, access, and use broadband Internet access service or lawful Internet content, applications, services, or devices of the customer’s choice, or an edge provider’s ability to make lawful content, applications, services, or devices available to a customer.
(e) Engaging in deceptive or misleading marketing practices that misrepresent the treatment of Internet traffic or content to its customers.
(f) Advertising, offering for sale, or selling broadband Internet access service to any customer without prominently disclosing with specificity all aspects of the service advertised, offered for sale, or sold.

SEC. 4.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 5.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SECTION 1.Division 2.6 (commencing with Section 5980) is added to the Public Utilities Code, to read:
2.6.California Internet Consumer Protection and Net Neutrality
5980.

(a)The Legislature finds and declares that the Federal Communications Commission has repealed net neutrality rules intended to protect consumers and to ensure fair and reasonable access to the Internet.

(b)It is the intent of this division to ensure that corporations do not impede competition or engage in deceptive consumer practices, and that they offer service to residential broadband Internet customers on a nondiscriminatory basis.

(c)This act shall be known, and may be cited, as the California Internet Consumer Protection and Net Neutrality Act of 2018.

(d)It is the intent of the Legislature to ensure that all of the following principles, as established in Section 709, are met:

(1)The development and deployment of new technologies and the equitable provision of services in a way that efficiently meets consumer need and encourages the ubiquitous availability of a wide choice of state-of-the-art services.

(2)The promotion of lower prices, broader consumer choice, and avoidance of anticompetitive conduct.

(3)The removal of the barriers to open and competitive markets and the promotion of fair product and price competition in a way that encourages greater efficiency, lower prices, and more consumer choice.

5981.

For purposes of this division, the following definitions apply:

(a)“Broadband Internet access service” means a mass-market retail service by wire or radio in California that provides the capability to transmit data to, and receive data from, all or substantially all Internet endpoints, including any capabilities that are incidental to, and enable the operation of, the communications service, but excluding dial-up Internet access service. “Broadband Internet access service” also encompasses any service in California that provides a functional equivalent of that service or that is used to evade the protections set forth in this division, as determined by the commission.

(b)“Edge provider” means any individual or entity in California that provides any content, application, or service over the Internet, and any individual or entity in California that provides a device used for accessing any content, application, or service over the Internet.

(c)“End user” means an individual or entity that uses a broadband Internet access service.

(d)“Internet service provider” means a business that provides broadband Internet access service to an individual, corporation, government, or other end user in California.

(e)“Paid prioritization” means the management of an Internet service provider’s network to directly or indirectly favor some traffic over other traffic, including through the use of techniques such as traffic shaping, prioritization, resource reservation, or other forms of preferential traffic management, either (1) in exchange for consideration, monetary or otherwise, from a third party, or (2) to benefit an affiliated entity.

(f)“Reasonable network management” means a network management practice that has a primarily technical network management justification, but does not include other business practices. A network management practice is reasonable if it is primarily used for, and tailored to, achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.

5982.

An Internet service provider shall not engage in any of the following activities:

(a)Blocking lawful content, applications, services, or nonharmful devices, subject to reasonable network management, as determined by the commission.

(b)Impairing or degrading lawful Internet traffic on the basis of Internet content, application, or service, or use of a nonharmful device, subject to reasonable network management, as determined by the commission.

(c)(1)Engaging in paid prioritization, or providing preferential treatment of some Internet traffic to any end user.

(2)The commission may waive the ban on paid prioritization only if the petitioner demonstrates that the practice would provide some significant public interest benefit and would not harm the open nature of the Internet.

(d)Except for reasonable network management, unreasonably interfering with, or unreasonably disadvantaging, either an end user’s ability to select, access, and use broadband Internet access service or lawful Internet content, applications, services, or devices of the end user’s choice, or an edge provider’s ability to make lawful content, applications, services, or devices available to an end user.

(e)Engaging in deceptive or misleading marketing practices that misrepresent the treatment of Internet traffic or content to an end user.

5982.5.

In addition to the authority granted herein, any violation of this division may be enforced by the Attorney General, a district attorney, or a city attorney pursuant to Chapter 5 (commencing with Section 17200) of Part 2 of, and Chapter 1 (commencing with Section 17500) of Part 3 of, Division 7 of the Business and Professions Code.

5983.

On or before December 31, 2018, the commission shall adopt an order that does all of the following:

(a)Establishes rules implementing Section 5982, by which the commission shall enforce this division. Nothing in this subdivision shall affect the authority of the Attorney General, a district attorney, or a city attorney to enforce this division pursuant to the authority described in Section 5982.5.

(b)Identifies and specifies this state government’s role as an Internet customer, uses that customer power to ensure implementation of this division, and establishes sample master contracts for public entities to be used as an incentive for California companies to comply with net neutrality principles.

(c)Establishes statewide consumer protection rules and guidelines that can be easily accessed by the public and that include “ground truth” testing for broadband Internet speeds to create a single objective statewide Internet speed test, which permits end users to test their own broadband Internet speed and submit its results to the commission to determine what Internet speeds they are receiving and where Internet service providers may be blocking, impairing, or degrading Internet traffic or content.

(d)Ensures that public purpose program funding, such as funding under the lifeline service program, California Advanced Services Fund program, California Teleconnect Fund program, or other similar publicly funded programs, is expended in a manner that will maximize Internet neutrality and ensure the fair distribution of services to low-income individuals and communities.

(e)Amends or modifies commission rules pertaining to eligible telecommunications carrier status, which is necessary to participate as a provider in the lifeline service program and to receive other federal funding, to ensure compliance with consumer protection and Internet neutrality standards provided under this division.

(f)Establishes a process whereby an Internet service provider shall certify to the commission that it is providing broadband Internet access service in accordance with the requirements set forth in this division.

5989.

The provisions of this division are severable. If any provision of this division or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 2.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SEC. 3.

This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

The Federal Communications Commission has vacated an earlier order establishing consumer protections and Internet neutrality. It is necessary for this bill to take effect immediately to ensure those protections are continued.