California is poised to accept $1.86 billion in federal BEAD broadband grants even though the Trump administration conditions that acceptance on a statewide waiver preventing California from enforcing net neutrality, rate regulation, or other “utility-style” rules against any ISP that receives grant money. The NTIA requires that the exemption apply throughout the state - not just in grant-funded areas - for the duration of subgrantee performance plus an extended federal-interest period, a window that can total up to 14 years. The NTIA justifies the demand by saying state regulation of non-BEAD locations would raise ISPs’ compliance costs and threaten the financial viability of BEAD projects. The California Public Utilities Commission is scheduled to ratify the state’s BEAD plan, which would allocate about $1.4 billion to deploy service to roughly 270,571 locations and send large shares to Comcast, AT&T, Verizon/Frontier, Amazon’s Kuiper, and SpaceX’s Starlink.
Advocacy groups and legal experts warn the condition would erode California’s 2018 net neutrality protections and other safeguards - for example, a law banning throttling of first responders and merger commitments like an affordable $20 Verizon plan - and argue the NTIA’s grant condition conflicts with Congress’s BEAD statute. Groups urge Governor Newsom, the attorney general, and the CPUC to delay acceptance and sue now; once the state accepts funds, legal challenges face a far stricter review in the D.C. Circuit, making victory much harder.
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