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California shoots down 'kill switch' legislation for smartphones

Legislators rejected a bill requiring device makers like Apple to include antitheft software on smartphones sold in the state. Their reason: It would be bad for business.

The senate chambers at the California state capitol building Richard Nieva/CNET

SACRAMENTO, Calif. -- After a long debate on the Senate floor, California legislators narrowly rejected a bill on Thursday that would have required anti-theft software to come preloaded and automatically enabled on all smartphones sold in the state.

The law, spearheaded by California State Sen. Mark Leno and San Francisco District Attorney George Gascon, would have mandated so-called kill switch technology, requiring smartphone makers like Apple to include software that would render a phone inoperable if stolen.

The problem, Leno and other government officials say, is an "epidemic." One in every three robberies in the United States involves the theft of a mobile device, according to the Federal Communications Commission. On Gascon's home turf of San Francisco, for example, over half of thefts involve phones or tablets. And across the bay in the city of Oakland, that number jumps up to more than 75 percent. Consumer Reports has said that about 1.6 million Americans were the victims of smartphone theft in 2012.

Failing to reach a minimum of 21 votes in favor, the final tally was 19 yes's to 17 no's, with one senator not voting. Leno told CNET that he plans to take the bill up again next week. "The game is not yet over," he said.

When initially asked for comment, Leno offered only a statement: "This technology exists, and until it is pre-enabled on every new phone purchased, consumers will continue to be the innocent victims of thieves who bank on the fact that these devices can be resold at a profit on the black market."

Also in a statement, Gascon questioned the priorities of the opposition. "With their no vote, 17 members of the Senate chose to protect billion dollar industry profits over the safety of the constituents they were elected to serve," he said.

The vote is only the latest in a nascent national push by other state law enforcement agencies, with New York Attorney General Eric Schneidermann -- who has worked closely with Gascon -- leading the charge in New York. The two launched the "Secure Our Smartphones," or SOS, initiative in New York City in June, with the goal of bringing kill switches to phones. Members of the campaign include more than a hundred politicians, law enforcement officials, and consumer advocates, like New York City Mayor Bill de Blasio and Oakland Mayor Jean Quan.

State Sen. Mark Leno presenting the bill Richard Nieva/CNET

There has been pushback from the wireless carrier industry, which argues that mandating "kill switch" technology leaves consumers vulnerable to hackers who could maliciously wipe away a phone's data. However, government officials have said the wireless industry's resistance has to do with money, specifically losing business from insurance partners.

But last week, the CTIA, a trade organization that represents the mobile telecom industry, softened its stance by announcing a pledge that ensures a "baseline anti-theft tool" will come preloaded or be available for download on phones made and sold by participating handset makers and carriers, including Apple, Samsung, Google (which makes the widely-used Android mobile operating system), AT&T, Verizon, Sprint and T-Mobile. On Thursday, the CTIA endorsed the vote, saying in a statement, "We appreciate the California Senate's decision today." The trade group also touted its own efforts to help stop smartphone theft, including the pledge it made last week.

While government officials applauded the move, their biggest qualm is that the antitheft measures remain opt-in. Because they're not automatically turned on, consumers may forget to activate them -- which defeats the purpose of having the software there as a deterrent for criminals.

"The debate is now between opt-in and opt-out," Leno said, presenting the bill.

The proposed legislation was amended for Thursday's vote, only applying the requirement to smartphones, and only to those manufactured after July 1, 2015. The bill originally encompassed more mobile devices, including tablets, and called for the software to be applied to phones sold -- not just manufactured -- after January 1 of next year.

The refrain from those opposing the bill was that having a requirement for phones sold only in California would hurt business. Senators also argued that over-mandating would drive away the companies that have been such a boost to the state's economy. "If people want to hijack your car because it's expensive, do you want a 'kill switch' on your car?" said Sen. Jean Fuller, on the floor.

Another concern was that the 'kill switch' wouldn't be as much of a deterrent as its supporters think, as criminals would still try to get their hands on phones for the value of its hardware. "We need to make the sale of parts illegal," Fuller told CNET, after the vote.

The San Francisco District Attorney's office denied that the sale of hardware was the issue. "The parts market is extremely niche, and that's not what's driving the epidemic," said Max Szabo, legislative affairs and policy manager for the D.A'.s office.

The road to Sacramento

For Gascon, who was not at the vote but worked closely with Leno, the effort began in late 2012, when he reached out to AT&T. That led to a powwow between his office, the CTIA and the four national carriers: AT&T, Verizon, T-Mobile and Sprint. The meeting eventually led Gascon to reach out directly to phone manufacturers instead, because the CTIA said those companies would ultimately make the call on the technology.

First on Gascon's list was Apple. As San Francisco's DA, he had been appointed to serve that region. And, after all, Apple is local company, just down the highway in Cupertino, Calif., about 40 miles outside of San Francisco. (Not to mention he's an iPhone user himself. ) "Apple was really my primary focus early on," he said. Leno also said that criminals had dubbed smartphone theft "Apple picking."

Gascon wrote two letters to Apple CEO Tim Cook, and though he still has not discussed a kill switch with Cook directly, he's met with the company's General Counsel Bruce Sewell.

Apple and its chief rival Samsung -- the Korean handset maker and No. 1 smartphone seller in the world -- have since introduced new anti-theft measures on their phones. When Apple released an overhauled version of its mobile operating system in September, the company added an anti-theft feature to its Find My iPhone app -- which uses GPS tracking to locate a lost phone -- called "activation lock." The feature makes it harder for someone to use a stolen phone by requiring a user's Apple ID and password before they can turn off Find My iPhone's tracking, sign out of Apple's iCloud online storage service, and reactivate a locked phone.

And when Samsung released its Galaxy S5 smartphone earlier this month, it included its own anti-theft feature called "reactivation lock," which prevents a locked phone from being made operable again, even through a factory reset.

But it hasn't been easy getting those features on phones. When Samsung was getting ready to ship its Galaxy S4, it came with a preloaded kill switch called LoJack, developed by the Canadian company Absolute, according to Gascon. But resistance from the carriers put the kibosh on the feature, said Gascon, citing internal Samsung emails. The incident was a rallying point for government officials. "That's when we realized we couldn't do this without legislation," Oakland Mayor Quan told CNET in February.

Leno and Gascon introduced the legislation in February, during a press conference in San Francisco.

Update, 3:18 p.m. PT: Adds statement from CTIA.

Update, 5:34 p.m. PT: Adds additional comment from Sen. Mark Leno.