California has agreed to accept $1.42 billion in broadband grant funding from the Trump administration, but the state is refusing the administration's demand that it halt enforcement of its net neutrality law and other telecommunications regulations.
The confrontation could produce multiple legal battles involving the state, the federal government, and internet providers seeking government money. While California told federal officials it would take the funding, it expressly reserved the right to challenge the condition attached to it, and the state could delay or cancel plans to distribute the broadband grants depending on how the process unfolds.
The National Telecommunications and Information Administration decided last year that states must agree not to enforce any rate regulation or net neutrality rule on internet service providers that receive money from the $42 billion Broadband Equity, Access, and Deployment program, known as BEAD. The restriction forced California to decide whether to accept its share of the fund despite the limits placed on its own laws.
State officials argue California should be able to obtain the money and keep enforcing its laws, contending that the Trump administration's demand would violate the state's constitutional rights. The California Public Utilities Commission made that view clear in a carefully worded letter sent Monday to Arielle Roth, the assistant secretary of commerce and NTIA administrator.
"The CPUC cannot be bound by any terms or conditions that are unconstitutional or not authorized by law and it expressly does not waive or concede any arguments or challenges concerning the legality, interpretation, or applicability of any term or condition," CPUC President John Reynolds wrote to Roth.
Reynolds' letter also said the CPUC cannot prevent other California agencies from enforcing state laws, suggesting that the state attorney general would maintain the right to punish internet providers that misbehave.
For now, the state's position leaves the future of the grant program in California uncertain. By accepting the funds while refusing to concede the legality of the condition, state officials have signaled that the dispute over which rules apply to companies receiving the money could end up before the courts.
