Trump administration reportedly conditions federal broadband funding on the removal of state net neutrality protections

The Trump administration is leveraging federal funding from the Bipartisan Infrastructure Law to force states to abandon net neutrality. Under these conditions, states must commit to not enforcing rules that prohibit ISPs from blocking, throttling, or charging fees for traffic prioritization. This approach differs from previous attempts to preempt state laws by using financial incentives as the primary mechanism for compliance.

For California, the cost of accepting approximately $1.4 billion for broadband deployment is a potential loss of regulatory authority. Legal counsel suggests that accepting the money makes winning future court battles more difficult and could exempt ISPs from state laws for up to 14 years. This duration covers a four-year deployment period and a 10-year extended period of performance.

The regulatory impact extends beyond net neutrality to include general utility-style rules and rate regulation for companies like Verizon and AT&T. There is also uncertainty regarding whether ISPs will be permitted to set the pricing for mandated low-cost broadband offerings. This shift would move pricing and traffic management power from state regulators to the providers themselves.

California and Illinois are currently the only states that have not finalized their funding according to the NTIA BEAD progress dashboard. While the California Public Utility Commission recently approved a plan, it remains unclear if the state will comply with the NTIA's subgrantee agreement conditions. Advocacy groups argue that yielding to these demands sets a precedent for using federal funds to force state alignment with federal agendas.