The mystery of who and what killed the California Affordable Home Internet Act is coming into view.

As a California lawmaker hinted when the bill was abruptly withdrawn in June, the evidence seems to be pointing to the new leadership now directing the National Telecommunications and Information Administration (NTIA) – the agency administering the $42.5 billion federal BEAD program to expand Internet access.

In a recently released FAQ published by the NTIA this week, a corroborating clue has emerged.

And what may be the smoking gun is a bullet buried on page 48, under section 3.29, after the question: "May an Eligible Entity (states) require a specific rate for the low-cost service option (LCSO) when required by state law?”

NTIA's answer:

“No. The IIJA prohibits NTIA or the Assistant Secretary from engaging in rate regulation. Because the Assistant Secretary must approve the LCSO in the Final Proposal, the rate contained may not be the result of rate regulation. The RPN (Restructuring Policy Notice) addressed this fundamental flaw in the BEAD NOFO. The RPN eliminated BEAD NOFO requirements dictating price and other terms for the required low-cost service option.”

“Per the RPN, states may not apply state laws to reimpose LCSO requirements removed by the RPN. More specifically, the RPN ‘prohibits Eligible Entities from explicitly or implicitly setting the LCSO rate a subgrantee must offer’ (BEAD Restructuring Policy Notice, p.7). Violation would result in rejection of the Final (BEAD) Proposal (emphasis added).”

Last week, a California Assemblymember who had sponsored legislation for a broadband affordability law abruptly withdrew the legislation. 

But what really killed the broadband affordability bill in California? Was it opposition to the proposed legislation from within the state or pressure from the Trump administration?

The Bill Was Advancing Until…

Modeled on New York’s Affordable Broadband Act (ABA), the California Affordable Home Internet Act was first introduced in January. It aimed to require Internet service providers that operate in the Golden State to offer a $15 per month broadband service plan for income-eligible households.

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The proposed legislation was introduced as AB 353 by Assemblymember Tasha Boerner and was initially supported by the California Alliance for Digital Equity (CADE).

Over the intervening months, CADE and proponents of the bill offered resources and recommendations on how the bill could be made more effective than the ABA, hoping to avoid the pitfalls that advocates were seeing with the rollout and implementation of New York’s law.

On June 4, the California bill advanced through the state Assembly and moved on to the state senate by a 52-17 margin.

The FCC’s Universal Service Fund (USF) has survived a Supreme Court challenge by a right wing activist nonprofit, but the program – which for decades has helped extend broadband to underserved rural homes and schools – still faces a precarious immediate future.

It is a peculiar political story, given that the rural regions that overwhelmingly vote for Republicans are now seeing Republicans try to dismantle a program that has been crucial for rural investment and development.

The FCC established the fund in 1997 in compliance with the Telecommunications Act of 1996. Historically a program with broad, bipartisan support, the USF leverages around $8 billion annually to expand broadband access to rural communities, libraries, and schools. The program is primarily paid for by consumers via a small levy on traditional phone lines.

In 2023, a right wing activist nonprofit named “Consumer’s Research” sued the government over the USF, claiming that the FCC lacked the constitutional authority to levy a fee on consumers’ bills. The lawsuit claimed that the USF depended on what amounted to an “unconstitutional tax” on consumers to fund operations.

*In partnership with Broadband Breakfast, the following story by Broadband Breakfast Reporter Jake Neenan was originally published here.

The broadband industry keeps trying to get the Supreme Court to help them, and the Supreme Court keeps saying no.

The high court said again Monday that it will not hear the industry’s challenge to a New York law capping broadband prices for low-income customers. The denial Monday...keep(s) the door open for other states considering similar laws.

State legislators in at least California and Massachusetts are already considering similar laws.

ISPs had told justices they feared states doing so, writing that if the law were upheld “many state legislators and bureaucrats would surely then follow New York’s lead.”

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New York’s Affordable Broadband Act requires monthly prices of no more than $20 for households participating in programs like SNAP and Medicaid. ISPs with less than 20,000 subscribers were tentatively exempted, but large ISPs now bound by the law cover 95 percent of the state’s homes and businesses.

Charter and Altice already offered compliant plans per agreements with the state, and Verizon had a similar affordable plan with more stringent eligibility requirements. The law went into effect Jan. 15.