NY State Senate Bill 2019-S4368

Senate Bill S4368

2019-2020 Legislative Session

Relates to state contracts being only with internet service providers compliant with net neutrality and establishes a revolving fund for the establishment of municipal internet service providers; appropriation

download bill text pdf

Archive: Last Bill Status - In Senate Committee Finance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to finance
Mar 11, 2019	referred to finance

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2019-S4368 (ACTIVE) - Details

See Assembly Version of this Bill:: A138
Current Committee:: Senate Finance
Law Section:: Appropriations
Laws Affected:: Amd §5, Pub Serv L; amd §165, add §99-ff, St Fin L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S7175, A9057
2021-2022: S4666, A1239
2023-2024: S7915, A4594

2019-S4368 (ACTIVE) - Summary

2019-S4368 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4368

SPONSOR: PARKER
 
TITLE OF BILL:  An act to amend the public service law and the state
finance law, in relation to state contracts being only with internet
service providers compliant with net neutrality and establishes a
revolving fund for the establishment of municipal internet service
providers; and making an appropriation therefor

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to retain the policy of net neutrality at a
State level and to add an appropriation, which would provide a revolving
loan fund for any municipality that has a noncomplying ISP in its envi-
rons to be able to borrow the capital to build a competing network.

 
SUMMARY OF PROVISIONS:

Section 1: This act shall be known and may be cited as the "NYS Net
Neutrality Protection Act"

Subsection 2 of Section 5 of the Public service law is amended by adding
a new paragraph (i)

Subsection 3 of section 5 of the Public service law is amended by adding
a new paragraph subdivision 7

Subsection 4, subdivision 1 of Section 165 of the state finance law is
amended by adding three new paragraphs (f), (g), and (h)

Subsection 5: Section 165 of the state finance law is amended by adding
a new subdivision 9

Subsection 6: The state finance law is amended by adding a new section
99-bb

Subsection 7: the sum of two hundred fifty million dollars or so much
thereof as may necessary is hereby appropriated from any moneys in the
state treasury in the general fund to the credit of the state purposes
account for the initial capital of the municipal interest service
provider revolving loan fund in carrying out the provisions of this act.
Such sum shall be payable on the audit and warrant of the state comp-
troller on vouchers certified or approved in the manner provided by law.
No expenditure shall be made from this appropriation until a certificate
of approval of availability shall have been issued by the director of
the budget and filed with the state comptroller and a copy filed with
the chairman of the Senate finance committee and the chairman of the
assembly ways and means committee. Such certificate may be amended from
time to time by the director of the budget and a copy of each such
amendment shall be filed with the state comptroller, the chairman of the
senate finance committee and the chairman of the assembly ways and means
committee.

Subsection 8: Sets forth the effective date.

 
JUSTIFICATION:

Neutrality has been a core democratizing principle of the Internet since
its inception. Net Neutrality is the cornerstone idea of the worldwide
web that all internet data should be equal. Internet Service Providers
(ISP) should not be allowed to charge different companies more or less
for their data or to slow down, or block access to web sites and
services they do not like. Internet service is a telecommunications
service, no different from phone service. Phone companies, which are
often the same companies that are ISPs, cannot make the connection worse
if they do not approve of the caller on the other end of a call.

Both Freedom of Speech issues and fair competition issues arise with the
FCC decision to do away with the 2010 provisions of the law.  The FCC's
recent vote will make it easier for ISPs to change the nature of the
internet, making some websites and services cheaper and more easily
accessible, and others harder or more expensive to access. If major
corporations could pay to get special treatment-faster speeds, more
bandwidth- start-ups would be at a disadvantage. Hence, net neutrality
protects innovation as well because without it, small business entrepre-
neurs will not survive.  These small businesses constitute the majority
of the businesses in every region of the State - comprising at least 90
percent of total businesses in each region.

The deregulation of the internet will lead to a multitude of issues.  We
have seen this before with the deregulation of airlines and banks.
Unleashing the airlines to set their own fares and routes created over-
crowded planes, cramped seats, overstuffed luggage bins and absorbent
fares. Deregulation of banking allowed widespread abuses that triggered
the meltdown in the financial markets in 2008 and crashed the American
economy with reverberating effect.

This bill, through the State Treasury, allows municipalities to create
their own internet services for constituents in areas where Internet
Service Providers are non-compliant with 2010 Federal Communications
Commission's (FCC) Net Neutrality rules. It will create a competitive
and stabilizing effect on the telecommunications market and protect our
most cherished rights.

 
PRIOR LEGISLATIVE HISTORY:  s.k 1 2017-18: S7175A - AMENDED (T) AND
RECOMMIT TO FINANCE

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None noted.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S4368 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4368
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 11, 2019
                                ___________
 
 Introduced  by Sens. PARKER, BAILEY, BROOKS, KAMINSKY, KRUEGER, MONTGOM-
   ERY, PERSAUD, SEPULVEDA, STAVISKY -- read twice and  ordered  printed,
   and when printed to be committed to the Committee on Finance
 
 AN  ACT  to  amend  the public service law and the state finance law, in
   relation to state contracts being only with internet service providers
   compliant with net neutrality and establishes a revolving fund for the
   establishment of municipal internet service providers; and  making  an
   appropriation therefor
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. This act shall be known and may be cited as  the  "NYS  Net
 Neutrality Protection Act".
   §  2.  Subdivision 1 of section 5 of the public service law is amended
 by adding a new paragraph i to read as follows:
   I. TO EVERY BROADBAND INTERNET LINE WHICH LIES WHOLLY WITHIN THE STATE
 AND THAT PART WITHIN THE STATE OF NEW YORK OF EVERY  BROADBAND  INTERNET
 LINE  WHICH  LIES  PARTLY WITHIN AND PARTLY WITHOUT THE STATE AND TO THE
 PERSONS OR CORPORATIONS OWNING, LEASING OR OPERATING ANY SUCH  BROADBAND
 INTERNET LINE.
   §  3.  Section  5 of the public service law is amended by adding a new
 subdivision 7 to read as follows:
   7. THE COMMISSION SHALL REQUIRE ANY PERSON ENGAGED IN THE PROVISION OF
 BROADBAND INTERNET ACCESS SERVICE IN NEW YORK STATE  TO  REPORT  TO  THE
 COMMISSION, AND PUBLICLY DISCLOSE ANNUALLY, ACCURATE INFORMATION REGARD-
 ING  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 MAIN-
 TAIN INTERNET OFFERINGS.
   § 4. Subdivision 1 of section 165 of the state finance law is  amended
 by adding three new paragraphs f, g and h to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD03122-01-9

 S. 4368                             2
 
   F.  A "NET NEUTRAL SOURCE OF INTERNET SERVICES" SHALL MEAN AN INTERNET
 SERVICE PROVIDER WHO ADHERES TO THE PRINCIPLES OF NET NEUTRALITY.
   G.  A  "NON-NET  NEUTRAL  SOURCE  OF  INTERNET SERVICES" SHALL MEAN AN
 INTERNET SERVICE PROVIDER WHO VIOLATES ANY  OF  THE  PRINCIPLES  OF  NET
 NEUTRALITY.
   H.  "THE  PRINCIPLES OF NET NEUTRALITY" SHALL MEAN THE RULES AND REGU-
 LATIONS UNDER THE OPEN INTERNET REPORT AND ORDER ON REMAND,  DECLARATORY
 RULING,  AND  ORDER  BY  THE  FEDERAL COMMUNICATIONS COMMISSION RELEASED
 MARCH TWELFTH, TWO THOUSAND FIFTEEN, GN DOCKET NO. 14-28.
   § 5. Section 165 of the state finance law is amended by adding  a  new
 subdivision 9 to read as follows:
   9. PROHIBITION ON PURCHASE OF INTERNET SERVICES FROM A NON-NET NEUTRAL
 SOURCE OF INTERNET SERVICES.
   A.  (I)  WITH RESPECT TO CONTRACTS DESCRIBED IN SUBPARAGRAPHS (II) AND
 (III) OF THIS PARAGRAPH, AND IN ACCORDANCE WITH SUCH SUBPARAGRAPHS,  THE
 STATE  AND  ANY  GOVERNMENTAL  AGENCY OR POLITICAL SUBDIVISION OR PUBLIC
 BENEFIT CORPORATION OR MUNICIPALITY OF THE STATE SHALL NOT CONTRACT  FOR
 THE  SUPPLY  OF INTERNET SERVICES WITH ANY CONTRACTOR WHO DOES NOT AGREE
 TO STIPULATE TO THE FOLLOWING, IF THERE IS ANOTHER CONTRACTOR  WHO  WILL
 CONTRACT TO SUPPLY INTERNET SERVICES OF COMPARABLE QUALITY AT A COMPARA-
 BLE  PRICE OR COST, THE CONTRACTOR AND ANY INDIVIDUAL OR LEGAL ENTITY IN
 WHICH THE CONTRACTOR HOLDS A TEN PERCENT OR GREATER  OWNERSHIP  INTEREST
 AND  ANY  INDIVIDUAL OR LEGAL ENTITY THAT HOLDS A TEN PERCENT OR GREATER
 OWNERSHIP INTEREST IN THE CONTRACTOR SHALL MAKE  LAWFUL  STEPS  IN  GOOD
 FAITH  TO  CONDUCT  ANY  BUSINESS  OPERATIONS AS A NET NEUTRAL SOURCE OF
 INTERNET SERVICES.
   (II) IN THE CASE OF CONTRACTS LET BY A COMPETITIVE  PROCESS,  WHENEVER
 THE  RESPONSIVE  AND RESPONSIBLE OFFERER HAVING THE LOWEST PRICE OR BEST
 VALUE OFFER HAS NOT AGREED TO STIPULATE TO THE CONDITIONS SET  FORTH  IN
 THIS  SUBDIVISION AND ANOTHER RESPONSIVE AND RESPONSIBLE OFFERER WHO HAS
 AGREED TO STIPULATE TO SUCH CONDITIONS  HAS  SUBMITTED  AN  OFFER  SHALL
 DETERMINE THAT THE CONTRACT BE AWARDED TO THE LOWEST PRICE OR BEST VALUE
 OFFER  FOR  INTERNET  SERVICES  FROM  A  NET  NEUTRAL SOURCE OF INTERNET
 SERVICES.
   (III) IN THE CASE OF CONTRACTS LET BY OTHER THAN A COMPETITIVE PROCESS
 INTERNET SERVICES INVOLVING AN EXPENDITURE OF AN AMOUNT GREATER THAN THE
 DISCRETIONARY BUYING THRESHOLD  AS  SPECIFIED  IN  SECTION  ONE  HUNDRED
 SIXTY-THREE OF THIS ARTICLE, THE CONTRACTING ENTITY SHALL NOT AWARD TO A
 PROPOSED  CONTRACTOR  WHO  HAS NOT AGREED TO STIPULATE TO THE CONDITIONS
 SET FORTH IN THIS SUBDIVISION UNLESS  THE  ENTITY  SEEKING  TO  USE  THE
 INTERNET  SERVICES  DETERMINES  THAT THE INTERNET SERVICES ARE NECESSARY
 FOR THE ENTITY TO PERFORM ITS FUNCTIONS AND THERE IS NO OTHER  RESPONSI-
 BLE  CONTRACTOR  WHO WILL SUPPLY INTERNET SERVICES OF COMPARABLE QUALITY
 AT A COMPARABLE PRICE. SUCH DETERMINATIONS SHALL BE MADE IN WRITING  AND
 SHALL BE PUBLIC DOCUMENTS.
   B. UPON RECEIVING INFORMATION THAT A CONTRACTOR WHO HAS MADE THE STIP-
 ULATION  REQUIRED  BY  THIS  SUBDIVISION  IS  IN  VIOLATION THEREOF, THE
 CONTRACTING ENTITY SHALL REVIEW SUCH INFORMATION AND OFFER THE  CONTRAC-
 TOR  AN  OPPORTUNITY  TO RESPOND. IF THE CONTRACTING ENTITY FINDS THAT A
 VIOLATION HAS OCCURRED, IT SHALL TAKE SUCH ACTION AS MAY BE  APPROPRIATE
 AND  PROVIDED  FOR  BY LAW, RULE OR CONTRACT, INCLUDING, BUT NOT LIMITED
 TO,  IMPOSING  SANCTIONS,  SEEKING  COMPLIANCE,  RECOVERING  DAMAGES  OR
 DECLARING THE CONTRACTOR IN DEFAULT.
   C.  AS USED IN THIS SUBDIVISION, THE TERM "CONTRACT" SHALL NOT INCLUDE
 CONTRACTS WITH  GOVERNMENTAL  AND  NON-PROFIT  ORGANIZATIONS,  CONTRACTS
 AWARDED  PURSUANT  TO  EMERGENCY  PROCUREMENT  PROCEDURES  OR CONTRACTS,

 S. 4368                             3
 
 RESOLUTIONS, INDENTURES, DECLARATIONS  OF  TRUST  OR  OTHER  INSTRUMENTS
 AUTHORIZING  OR  RELATING TO THE AUTHORIZATION, ISSUANCE, AWARD, SALE OR
 PURCHASE OF BONDS, CERTIFICATES OF INDEBTEDNESS, NOTES OR  OTHER  FISCAL
 OBLIGATIONS,  PROVIDED  THAT  THE  POLICIES OF THIS SUBDIVISION SHALL BE
 CONSIDERED WHEN SELECTING A CONTRACTOR TO  PROVIDE  FINANCIAL  OR  LEGAL
 ADVICE, AND WHEN SELECTING MANAGING UNDERWRITERS IN CONNECTION WITH SUCH
 ACTIVITIES.
   D. THE PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO CONTRACTS FOR
 WHICH  THE STATE OR OTHER CONTRACTING ENTITY RECEIVES FUNDS ADMINISTERED
 BY THE UNITED STATES, EXCEPT TO THE EXTENT CONGRESS HAS DIRECTED TO  NOT
 WITHHOLD  FUNDS  FROM  STATES  AND  LOCALITIES  THAT CHOOSE TO IMPLEMENT
 SELECTIVE PURCHASING POLICIES BASED ON AN AGREEMENT TO COMPLY  WITH  THE
 PRINCIPLES  OF  NET NEUTRALITY, OR TO THE EXTENT THAT SUCH FUNDS ARE NOT
 OTHERWISE WITHHELD BY CONGRESS.
   § 6. The state finance law is amended by adding a new section 99-ff to
 read as follows:
   § 99-FF. MUNICIPAL INTERNET SERVICE PROVIDER REVOLVING LOAN FUND.   1.
 THERE  IS HEREBY ESTABLISHED IN THE JOINT CUSTODY OF THE COMPTROLLER AND
 THE PUBLIC SERVICE COMMISSION A FUND  TO  BE  KNOWN  AS  THE  "MUNICIPAL
 INTERNET  SERVICE PROVIDER REVOLVING LOAN FUND". SUCH FUND SHALL CONSIST
 OF MONEYS MADE AVAILABLE PURSUANT TO APPROPRIATION AND ANY OTHER SOURCES
 IN ORDER TO PROVIDE SUPPORT  FOR  MUNICIPALITIES  ATTEMPTING  TO  CREATE
 THEIR OWN INTERNET SERVICE PROVIDER.
   2.  THE  ACCOUNT  SHALL  CONSIST  OF  ALL  MONEYS APPROPRIATED FOR ITS
 PURPOSE, ALL MONEYS TRANSFERRED TO SUCH ACCOUNT PURSUANT TO LAW, AND ALL
 MONEYS REQUIRED BY THIS SECTION OR ANY OTHER LAW  TO  BE  PAID  INTO  OR
 CREDITED  TO  THIS ACCOUNT, INCLUDING ALL MONEYS RECEIVED BY THE ACCOUNT
 OR DONATED TO IT, PAYMENTS OF PRINCIPAL AND INTEREST ON LOANS MADE  FROM
 THE ACCOUNT, AND ANY INTEREST EARNINGS WHICH MAY ACCRUE FROM THE INVEST-
 MENT OR REINVESTMENT OF MONEYS FROM THE ACCOUNT.
   3.  MONEYS  OF  THE ACCOUNT, WHEN ALLOCATED, SHALL BE AVAILABLE TO THE
 PUBLIC SERVICE COMMISSION TO MAKE LOANS AS PROVIDED IN THIS SECTION.  UP
 TO  FIVE PERCENT OF THE MONEYS OF THE ACCOUNT OR TWO HUNDRED FIFTY THOU-
 SAND DOLLARS, WHICHEVER IS LESS,  MAY  BE  USED  TO  PAY  THE  EXPENSES,
 INCLUDING  PERSONAL SERVICE AND MAINTENANCE AND OPERATION, IN CONNECTION
 WITH THE ADMINISTRATION OF SUCH LOANS.
   4. (A) THE PUBLIC SERVICE COMMISSION MAY MAKE, UPON  APPLICATION  DULY
 MADE,  UP  TO  THE AMOUNTS AVAILABLE BY APPROPRIATION, LOANS FOR ANY AND
 ALL COSTS ASSOCIATED WITH THE CREATION OF A MUNICIPALLY OWNED  BROADBAND
 INTERNET SERVICE PROVIDER.
   (B)  THE  PUBLIC  SERVICE COMMISSION SHALL HAVE THE POWER TO MAKE SUCH
 RULES AND REGULATIONS AS MAY BE NECESSARY AND PROPER TO  EFFECTUATE  THE
 PURPOSES OF THIS SECTION.
   5.  (A)  APPLICATION FOR LOANS MAY BE MADE BY A TOWN, VILLAGE, CITY OR
 COUNTY PROVIDED THAT THE APPLICATION IS OTHERWISE  CONSISTENT  WITH  ITS
 RESPECTIVE POWERS.  APPLICATIONS MAY ALSO BE SUBMITTED JOINTLY BY MULTI-
 PLE  APPLICANTS  PROVIDED  THAT  THE APPLICATION IS OTHERWISE CONSISTENT
 WITH EACH APPLICANT'S RESPECTIVE POWERS.
   (B) EVERY APPLICATION SHALL BE IN A  FORM  ACCEPTABLE  TO  THE  PUBLIC
 SERVICE  COMMISSION.  EVERY  APPLICATION  SHALL  ACCURATELY  REFLECT THE
 CONDITIONS WHICH GIVE RISE TO THE PROPOSED  EXPENDITURE  AND  ACCURATELY
 REFLECT THE ABILITY OF THE APPLICANT TO MAKE SUCH AN EXPENDITURE WITHOUT
 THE PROCEEDS OF A LOAN UNDER THIS SECTION.
   (C)  (I)  THE PUBLIC SERVICE COMMISSION SHALL GIVE PREFERENCE TO THOSE
 APPLICATIONS WHICH DEMONSTRATE THE GREATEST  NEED,  JOINT  APPLICATIONS,
 AND  TO  THOSE APPLICATIONS THE PROCEEDS OF WHICH WILL BE APPLIED TOWARD

 S. 4368                             4
 
 ATTAINING COMPLIANCE WITH FEDERAL AND STATE LAWS AND MAY DISAPPROVE  ANY
 APPLICATION  WHICH  CONTAINS  NO ADEQUATE DEMONSTRATION OF NEED OR WHICH
 WOULD RESULT IN INEQUITABLE OR INEFFICIENT USE  OF  THE  MONEYS  IN  THE
 ACCOUNT.
   (II) IN MAKING DETERMINATIONS ON LOAN APPLICATIONS, THE PUBLIC SERVICE
 COMMISSION  SHALL ASSURE THAT LOAN FUND MONEYS ARE EQUITABLY DISTRIBUTED
 AMONG ALL GEOGRAPHICAL AREAS OF THE STATE.
   (D) THE PUBLIC SERVICE COMMISSION SHALL, TO THE MAXIMUM EXTENT  FEASI-
 BLE,  AND  CONSISTENT WITH THE OTHER PROVISIONS OF THIS SECTION, SEEK TO
 PROVIDE THAT LOANS AUTHORIZED BY THIS  SECTION  REFLECT  AN  APPROPRIATE
 GEOGRAPHIC   DISTRIBUTION,   ARE  DISTRIBUTED  EQUITABLY  AND  ENCOURAGE
 REGIONAL COOPERATION.
   § 7. The sum of two hundred fifty million dollars  ($250,000,000),  or
 so  much  thereof  as  may be necessary, is hereby appropriated from any
 moneys in the state treasury in the general fund to the  credit  of  the
 state purposes account for the initial capital of the municipal internet
 service  provider  revolving loan fund in carrying out the provisions of
 this act. Such sum shall be payable on the  audit  and  warrant  of  the
 state  comptroller  on  vouchers  certified  or  approved  in the manner
 provided by law. No expenditure shall be made  from  this  appropriation
 until  a  certificate of approval of availability shall have been issued
 by the director of the budget and filed with the state comptroller and a
 copy filed with the chairman of the senate  finance  committee  and  the
 chairman  of the assembly ways and means committee. Such certificate may
 be amended from time to time by the director of the budget and a copy of
 each such amendment shall be  filed  with  the  state  comptroller,  the
 chairman  of the senate finance committee and the chairman of the assem-
 bly ways and means committee.
   § 8. This act shall take effect immediately.

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