The Commerce Department's National Telecommunications and Information Administration, which runs the $42 billion Broadband Equity, Access, and Deployment program, added a condition to its grant terms in November 2025 requiring states that accept the money to stop enforcing net neutrality and rate rules against funded internet providers. As quoted by Ars Technica, states “shall commit that it will not enforce any law, regulation, order, contracting requirement, or other enforceable obligation that directly or indirectly regulates the rates, terms, and conditions of broadband Internet service” or “imposes net neutrality rules, open access, or other utility-style rules” against a funded provider “anywhere it provides service within the State (i.e., both BEAD and non-BEAD locations).” The Benton Institute confirmed the term was new. NTIA argued that applying such rules at non-BEAD locations “could raise compliance costs and threaten the overall financial viability” of providers.
California's allocation is $1.86 billion, and NTIA issued an award of about $1.42 billion on August 31, much of it to Comcast, AT&T and Verizon. Ars reported on September 16 that the state faces an end-of-September deadline, with a possible 30-day extension, to accept terms that advocates say would bar enforcement of its 2018 net neutrality law and a 2019 law banning throttling of first responders against funded providers for up to 14 years. California had not decided. Nearly 30 advocacy groups urged state leaders to challenge the condition, writing that accepting it “would set a dangerous precedent for the federal government to use federal funding as a cudgel that forces states in line with its agenda.” Stanford law professor Barbara van Schewick said, “A federal agency can't use fine print in a grant to override what Congress wrote into the statute.”