The legislation by Sen. Mark Leno, D-San Francisco, responds to a crime problem that is exploding across the country. In San Francisco, for example, the district attorney's office says more than half of all robberies last year included the theft of a smartphone, and the bill analysis cites a Consumer Reports study that estimated 1.6 million Americans were targeted by thieves for their smartphones last year.
Leno's legislation, SB962, fell two votes shy of a majority in the 40-member house. It would have required companies to manufacture smartphones with technology that would make them inoperable when not in the owner's possession.
The wireless industry prefers a voluntary approach that allows consumers to opt-in if they choose, such as downloading free apps that protect the devices and their information if they are stolen. But Leno said the technology must be mandatory to act as a deterrent. His bill would put the burden on manufacturers rather than consumers, who would have to opt out of the protections at the time of purchase.
"This is about a technological deterrence," Leno said. "We need to get into the minds of those who have shifted their activities to these new crimes that it's not worth it."
He also said the industry benefits financially from the high rate of smartphone thefts. He told his colleagues before the Senate vote that it makes billions of dollars selling insurance policies to consumers and new smartphones to the victims of theft.
Deterring the thefts, Leno said, will affect smartphone companies' bottom lines.
A spokeswoman for CTIA-The Wireless Association did not immediately return email and telephone messages seeking a response to Leno's comment.
A study by Creighton University in Omaha, Neb., released earlier this month found that adding the so-called "kill switch" technology to smartphones could save American consumers up to $2.6 billion a year by not having to replace their stolen phones. The researcher, business professor William Duckworth, said his survey of 1,200 smartphone users found they want the disabling technology pre-installed on their devices.
Sen. Jean Fuller, R-Bakersfield, voted against the bill because she believed it would undermine consumer choice. She also questioned whether it could be a first step to mandating similar technology in other products, such as having "a kill switch in your car."
Leno said consumers would retain the right to opt out of the shut-down technology. He also said it would be up to the manufacturers to decide what kind of solution worked best for their products and said that could be new software or hardware.
Before the bill failed on a 19-17 vote, he agreed to make two amendments: The legislation would apply only to smartphones, not tablets, and the start date would be pushed back to July 2015 to give manufacturers more time to conform.
Despite the rejection, Leno said he will consider bringing it back for a floor vote before the May 31 deadline to pass bills from one house to the next.