California May Suspend Net Neutrality Law for Federal Broadband Funds

Federal Funding Contingent on Net Neutrality Waiver

California is poised to accept $1.86 billion in federal broadband grant funds through the Broadband Equity, Access, and Deployment (BEAD) program. However, this funding is contingent on the state agreeing not to enforce net neutrality rules on any Internet service provider that receives a portion of these grants. This requirement was established by the Trump administration when it revised the BEAD program last year.

California's Existing Net Neutrality Law

California has a state net neutrality law that prohibits ISPs from blocking or throttling lawful internet traffic and from charging websites for prioritized delivery. The state previously won a court battle to defend this law. The current federal requirement seeks to achieve a similar outcome to the first Trump administration's attempt to preempt state net neutrality laws, by making federal broadband money conditional on non-enforcement.

Scope of the Waiver

The National Telecommunications and Information Administration (NTIA) specifies that participating states must exempt ISPs from net neutrality rules and price regulations across the entire state, not just in areas where the broadband service is deployed with federal funds. This exemption from state laws and rules would remain in effect for up to 14 years.

Upcoming Vote by CPUC

California and Illinois are the only states that have not yet finalized their BEAD funding plans. The California Public Utilities Commission (CPUC) is scheduled to vote on a resolution to ratify the state’s final BEAD plan, which includes this condition, in the near future.