California is close to accepting $1.86 billion in federal broadband funding under the Trump administration's Broadband Equity, Access, and Deployment (BEAD) programme, despite conditions that would bar the state from enforcing its own net neutrality law. The Trump administration's National Telecommunications and Information Administration (NTIA) has ruled that any state taking BEAD money must exempt internet service providers from net neutrality rules and rate regulation statewide, not just in areas receiving funded infrastructure, for up to 14 years. This puts California in a difficult position, as the state previously won a lengthy court battle to defend its own net neutrality protections, which ban ISPs from blocking or throttling lawful traffic or charging websites for prioritised delivery.

The California Public Utilities Commission (CPUC) is due to vote on a resolution ratifying the state's final BEAD plan, a step a CPUC spokesperson described as merely procedural. However, nearly 30 advocacy groups have urged Governor Gavin Newsom, Attorney General Rob Bonta and CPUC commissioners to resist the condition, warning in a letter that accepting the funds could mean forfeiting the state's ability to defend net neutrality and other regulatory powers over major ISPs such as AT&T and Verizon. Paul Goodman of the Center for Accessible Technology, one of the letter's signatories, called the vote "the beginning of the end" and urged the CPUC to delay the decision and instead challenge the NTIA condition in court, arguing that winning such a fight becomes far harder once the funding is accepted. California and Illinois remain the only two states yet to finalise their BEAD allocations.