HB132 (2019) Detail

Relative to net neutrality.


HB 132-FN - AS INTRODUCED

 

 

2019 SESSION

19-0047

05/10

 

HOUSE BILL 132-FN

 

AN ACT relative to net neutrality.

 

SPONSORS: Rep. Oxenham, Sull. 1; Rep. Abramson, Rock. 20

 

COMMITTEE: Science, Technology and Energy

 

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ANALYSIS

 

This bill:

 

I.  Requires the department of information technology to develop a process for Internet service providers to certify compliance with consumer protection and net neutrality standards.

 

II.  Requires such certification for an Internet service provider to be eligible to enter into a service contract with a state agency on or after April 15, 2020.

 

III.  Directs the attorney general to review network management practices of ISPs in New Hampshire and assess compliance with the 2015 FCC net neutrality rules.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0047

05/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to net neutrality.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Statement of Findings.  The general court finds and declares that:

I.  Our state has a compelling interest in preserving and promoting an open Internet in New Hampshire.

II.  As New Hampshire is a rural state with many geographically remote locations, broadband Internet access service is essential for supporting economic and educational opportunities, strengthening health and public safety networks, and reinforcing freedom of expression and democratic, social, and civic engagement.

III.  The accessibility and quality of communications networks in New Hampshire, specifically broadband Internet access service, will critically impact our state's future.

IV.  Net neutrality is an important topic for many New Hampshire residents and transparency with respect to the network management practices of Internet service providers (ISPs) doing business in New Hampshire will continue to be of great interest to many people living and working in the state.

V.  In 1996, Congress recognized that "[t]he Internet and other interactive computer services offer a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity" and "[i]ncreasingly Americans are relying on interactive media for a variety of political, educational, cultural, and entertainment services." 47 U.S.C. section 230(a)(3) and (5).

VI.  Many renters do not have the ability to choose easily between ISPs.  This lack of a thriving competitive market, particularly in isolated locations, disadvantages the ability of consumers and businesses to protect their interests sufficiently.

VII.  Without net neutrality, "ISPs will have the power to decide which websites you can access and at what speed each will load.  In other words, they'll be able to decide which companies succeed online, which voices are heard - and which are silenced." Tim Berners-Lee, founder of the World Wide Web and Director of the World Wide Web Consortium (W3C), December 13, 2017.

VIII.  The Federal Communications Commission's (FCC's) recent repeal of the federal net neutrality rules pursuant to its Restoring Internet Freedom Order manifests a fundamental shift in policy.

IX.  The FCC anticipates that a "light-touch" regulatory approach under Title I of the Communications Act of 1934, rather than "utility-style" regulation under Title II, will further advance the Congressional goals of promoting broadband deployment and infrastructure investment.

X.  The FCC's regulatory approach is unlikely to achieve the intended results in New Hampshire.  The policy does little, if anything, to overcome the financial challenges of bringing broadband service to hard-to-reach locations with low population density.  However, it may result in degraded Internet quality or service.  The state has a compelling interest in preserving and protecting consumer access to high quality Internet service.

XI.  The economic theory advanced in the FCC in 2010 known as the "virtuous circle of innovation" seems more relevant to the market conditions in New Hampshire.  See In re Preserving the Open Internet, 25 F.C.C.R. 17905, 17910-11 (2010).

XII.  As explained in the FCC's 2010 order, "The Internet's openness...enables a virtuous circle of innovation in which new uses of the network - including new content, applications, services, and devices - lead to increased end-user demand for broadband, which drives network improvements, which in turn lead to further innovative network uses.  Novel, improved, or lower-cost offerings introduced by content, application, service, and device providers spur end-user demand and encourage broadband providers to expand their networks and invest in new broadband technologies."  25 FCC Rcd. at 17910-11, upheld by Verizon v. FCC, 740 F.3d 623, 644-45 (D.C. Circuit 2014).

XIII.  As affirmed by the FCC 5 years later, "the key insight of the virtuous cycle is that broadband providers have both the incentive and the ability to act as gatekeepers standing between edge providers and consumers.  As gatekeepers, they can block access altogether; they can target competitors, including competitors in their own video services; and they can extract unfair tolls."  Open Internet Order, 30 FCC Rcd at para. 20.  

XIV.  The state may exercise its traditional role in protecting consumers from potentially unfair and anticompetitive business practices.  Doing so will provide critical protections for New Hampshire individuals, entrepreneurs, and small businesses that do not have the financial clout to negotiate effectively with commercial providers, some of whom may provide services and content that directly compete with New Hampshire companies or companies with whom New Hampshire residents do business.

XV.  The FCC's most recent order expressly contemplates a state's exercise of its traditional police powers on behalf of consumers:  "we do not disturb or displace the states' traditional role in generally policing such matters as fraud, taxation, and general commercial dealings, so long as the administration of such general state laws does not interfere with federal regulatory objectives." Restoring Internet Freedom Order, WC Docket No. 17-108, FCC 17-166, para. 196.

XVI.  The benefits of state measures designed to protect the ability of people in this state to have unfettered access to the Internet far outweigh the benefits of allowing ISPs to manipulate Internet traffic for pecuniary gain.

XVII.  The most recent order of the FCC contemplates federal and local enforcement agencies preventing harm to consumers:  "In the unlikely event that ISPs engage in conduct that harms Internet openness...we find that utility-style regulation is unnecessary to address such conduct.  Other legal regimes - particularly antitrust law and the FTC's authority under Section 5 of the FTC Act to prohibit unfair and deceptive practices - provide protections to consumers." para. 140.  The attorney general enforces antitrust violations or violations of the Consumer Protection Act in New Hampshire.

XVIII.  The state has a compelling interest in knowing with certainty what services it receives pursuant to state contracts.

XIX.  Procurement laws are for the benefit of the state.  When acting as a market participant, the government enjoys unrestricted power to contract with whomever it deems appropriate and purchase only those goods or services it desires.

XX.  The disclosures required by this act are a reasonable exercise of the state's traditional police powers and will support the state's efforts to monitor consumer protection and economic factors in New Hampshire particularly with regard to competition, business practices, and consumer choice, and will also enable consumers to stay apprised of the network management practices of ISPs offering service in New Hampshire.

XXI.  The state is in the best position to balance the needs of its constituencies with policies that best serve the public interest.  The state has a compelling interest in promoting Internet consumer protection and net neutrality standards.  Any incidental burden on interstate commerce resulting from the requirements of this act is far outweighed by the compelling interests the state advances.

2  New Subdivision; Department of Information Technology; Internet Service Providers; Net Neutrality Compliance.  Amend RSA 21-R by inserting after section 15 the following new subdivision:

Internet Service Providers; Net Neutrality Compliance

21-R:16  Definitions.  The terms and definitions of this subdivision shall be interpreted broadly and any exceptions interpreted narrowly, using relevant Federal Communications Commission orders, advisory opinions, rulings, and regulations as persuasive guidance.  In this subdivision:

I.  "Broadband Internet access service" means a mass-market retail service by wire or radio in New Hampshire 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.  The term also encompasses any service in New Hampshire that the chief information officer finds to be providing a functional equivalent of the service described in this subdivision or that is used to evade the protections established in this subdivision.

II.  "Edge provider" means any person in this state that provides any content, application, or service over the Internet and any person in this state that provides a device used for accessing any content, application, or service over the Internet.

III.  "Internet service provider" or "provider" means a business that provides broadband Internet access service to any person in this state.

IV.  "Paid prioritization" means the management of an Internet service provider's network to favor directly or indirectly 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 in exchange for consideration, monetary or otherwise, from a third party or to benefit an affiliated entity or both.

V.  "Reasonable network management" means a practice that has a primarily technical network management justification but does not include other business practices and that 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.

21-R:17  Internet Service Providers; Net Neutrality Compliance.

I.  The chief information officer, in consultation with the attorney general and commissioner of administrative services, shall develop a process by which an Internet service provider may certify that it is in compliance with the consumer protection and net neutrality standards established in paragraph II.

II.  A certificate of net neutrality compliance shall be granted to an Internet service provider that demonstrates and the chief information officer finds that the Internet service provider, insofar as the provider is engaged in the provision of broadband Internet access service:

(a)  Does not engage in any of the following practices in New Hampshire:

(1)  Blocking lawful content, applications, services, or nonharmful devices, subject to reasonable network management.

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

(3)  Engaging in paid prioritization, unless this prohibition is waived pursuant to paragraph III.

(4)  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.  Reasonable network management shall not be considered a violation of this prohibition.

(5)  Engaging in deceptive or misleading marketing practices that misrepresent the treatment of Internet traffic or content to its customers.

(b)  Publicly discloses to consumers accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content application, service, and device providers to develop, market, and maintain Internet offerings.

III.  The chief information officer may waive the ban on paid prioritization under subparagraph II(a)(3) only if the Internet service provider demonstrates and the chief information officer finds that the practice would provide some significant public interest benefit and would not harm the open nature of the Internet in New Hampshire.

21-R:18  State Contracting; Internet Service.  

I.  Each contract for broadband Internet access service entered into by a state agency on or after April 1, 2020, shall include a provision requiring that the Internet service provider certify that it is in compliance with the consumer protection and net neutrality standards established in RSA 21-R:17.  

II.  For purposes of this section, "state agency" means any department, commission, board, institution, bureau, office, or other entity, by whatever name called, including the legislative and judicial branches of state government, established in the state constitution, statutes, session laws or executive orders.

3  Attorney General Review and Disclosure.  

I.  The attorney general shall review the network management practices of Internet service providers in New Hampshire and, to the extent possible, make a determination as to whether the provider's broadband Internet access service complies with the open Internet rules contained in the Federal Communications Commission's 2015 Open Internet Order, "Protecting and Promoting the Open Internet," WC Docket No. 14-28, Report and Order on Remand, Declaratory Ruling and Order, 30 FCC Rcd 5601.

II.  The attorney general shall make a report of its findings and review available to the public on the department of justice's website.

4  Effective Date.  This act shall take effect 60 days after its passage.

 

LBAO

19-0047

12/4/18

 

HB 132-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to net neutrality.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

$0

$0

$0

$0

   Expenditures

$735,958

$683,645

$709,645

$718,645

Funding Source:

  [ X ] General            [    ] Education            [ X ] Highway           [ X ] Other

 

METHODOLOGY:

This bill establishes principles for net neutrality and provides a framework for Internet service providers (ISPs) that opt to secure a certificate of net neutrality compliance.  The legislation requires that each contract for broadband Internet access entered into by a state agency on or after April 1, 2020 include a provision requiring such certification.  State agencies are defined to include any department, commission, board, institution, bureau, office or other entity, and legislative and judicial branches.  The Chief Information Officer of the Department of Information Technology (DoIT), the Attorney General (AG) and Commissioner of Administrative Services are required to develop a process by which an ISP may certify that it is in compliance with specified consumer protection and net neutrality standards.  The Attorney General (AG) shall review the network management practices of ISPs in New Hampshire and make a determination as to whether the ISP's broadband Internet access service complies with the 2015 net neutrality rules from the Federal Communication Commission.

 

The DoIT interprets the bill as requiring ISPs to operate under net neutrality principles to do business in the state and also to be eligible to be awarded contracts by the state.  DoIT would work with ISPs to certify, monitor, and in collaboration with the Attorney General's Office, enforce the net neutrality principles specified in the bill.  DoIT would  take on a completely new regulatory role which would require a new bureau to be funded differently than the rest of DoIT.  The operational impacts would be administrative overhead during implementation and longer term lost opportunity costs for some senior management staff within DoIT.  These lost opportunity costs, estimated to be $27,000 in FY 2020, and roughly $14,000 in each year thereafter.   Allocation of senior management expenses attributable to this function would be a general fund cost but will be matched by a decreased cost either in general or other fund expenses, yielding no overall cost increase.  Cost estimates include staff, associated space and workspace considerations, technology implementation and maintenance.  These operational and financial estimates do not take into account costs that may accrue to the AG's office in support of their part of the mission.  

 

 The DoIT would implement case management software to assist in certification monitoring and enforcement activities.  This software would facilitate business process discipline and provide exceptional accountability for all involved.  AG's office staffers supporting this function would need a license for case management software ($1,500 per user per year).

 

New DoIT staff positions include the following:

 

New DoIT Staff Position

 

             Salary and Benefits

 

 

 

 

 

FY 2020

FY 2021

FY 2022

FY 2023

Administrative Assistant II (LG 19, Step 1)

$67,000

$70,000

$73,000

$77,000

Utility Analyst IV (LG 30, Step 3)

$102,000

$107,000

$112,000

$113,000

Utility Analyst IV (LG 30, Step 3)

$102,000

$107,000

$112,000

$113,000

Attorney III (LG30, Step 5)

 

$110,000

$111,000

$117,000

$118,000

Unclassified Director (GG, Step 3)

$123,000

$129,000

$135,000

$136,000

TOTAL

 

 

 

$504,000

$524,000

$549,000

$557,000

 

Total costs for DoIT are accounted for as follows:

 

DoIT All New Costs

 

 

FY 2020

FY 2021

FY 2022

FY 2023

(5) New Positions

 

 

$504,000

$524,000

$549,000

$557,000

Office Space & Technology

 

$80,458

$23,145

$23,145

$23,145

Case Management Software

 

$27,500

$7,500

$7,500

$7,500

TOTAL

 

 

 

$611,958

$554,645

$579,645

$587,645

 

The Department of Justice states it would need to hire a full time attorney with the requisite experience to handle the review to certify compliance and networking management practices of ISPs.  The combined salary and benefits for this position are as follows: $124,000 for FY 2020; $129,000 for FY 2021; $130,000 for FY 2022; and $131,000 for FY 2023.

 

The Department of Administrative Services (DAS) indicates contracts entered into by the state will include the necessary net neutrality requirements in the bid solicitation materials.  Such RFPs or contracts will be determined and drafted by the Department of Justice, and DAS will notify potential bidders and contractors of the certification requirement and reject bids without such certification as part of the existing bidding and contracting process.  DAS estimates there will be no additional expenses or revenues in the Division of Procurement and Support Services due to this change but there is a potential unknown fiscal impact for integration with the current enterprise resources planning system and sub systems within the Financial Data Management Division.  The DAS also does not currently administer contracts for the legislative or judicial branches or numerous other agencies pursuant to RSA 21-I:18 and assumes this will continue.

 

The Judicial Branch states unless the branch has to hire a third party to certify that their ISP  is in compliance with the legislation, there would be no fiscal impact in excess of $10,000.

 

The Legislative Branch states there is no fiscal impact to the branch but it is unknown if certified ISPs would charge more for their services.

 

AGENCIES CONTACTED:

Departments of Information Technology, Administrative Services and Justice, Judicial and Legislative Branches

 

Links

HB132 at GenCourtMobile
HB132 Discussion

Action Dates

Date Body Type
Jan. 22, 2019 House Hearing
Jan. 30, 2019 House Exec Session
House Floor Vote
March 7, 2019 House Floor Vote
March 14, 2019 House Floor Vote

Bill Text Revisions

HB132 Revision: 4371 Date: Dec. 26, 2018, 3:36 p.m.

Docket

Date Status
Jan. 2, 2019 Introduced 01/02/2019 and referred to Science, Technology and Energy HJ 2 P. 38
Jan. 22, 2019 Public Hearing: 01/22/2019 01:30 pm LOB 304
Jan. 30, 2019 Executive Session: 01/30/2019 10:00 am LOB 304
March 7, 2019 Committee Report: Inexpedient to Legislate for 03/07/2019 (Vote 16-0; CC) HC 14 P. 6
Committee Report: Inexpedient to Legislate (Vote 16-0; CC)
March 7, 2019 Removed from Consent (Rep. Abramson) 03/07/2019 HJ 8 P. 3
Special Order to 03/14/2019 Without Objection HJ 8 P. 60
March 14, 2019 Inexpedient to Legislate: MA VV 03/14/2019 HJ 9 P. 28