In a significant reversal for California’s ambitious push toward affordable internet access, state officials have abandoned a proposed mandate that would have required major internet service providers (ISPs) to offer low-income residents broadband plans for just $15 a month.

The decision came amid mounting pressure from the Trump administration, which reportedly threatened to withhold billions in federal broadband funding if the state proceeded with the regulation.

The move highlights the escalating tensions between state-level initiatives and federal oversight in the telecommunications sector, particularly as the U.S. grapples with bridging the digital divide. California, long a leader in progressive tech policies, had positioned the affordable broadband requirement as a cornerstone of its strategy to ensure equitable access, but federal intervention has forced a retreat that could ripple across other states eyeing similar measures.

Federal Threats and State Capitulation

Details of the standoff emerged this week, with California lawmakers accusing the Trump administration of strong-arm tactics. According to reporting from Ars Technica, a state lawmaker described the situation as a “complete farce,” claiming the U.S. Department of Commerce warned that enforcing the $15 plan could jeopardize California’s allocation from the Broadband Equity, Access, and Deployment (BEAD) program. This federal initiative, originally funded under the 2021 infrastructure bill with over $42 billion nationwide, aims to expand high-speed internet to underserved areas.

The BEAD funds are critical for California, which had requested more than $1.8 billion to build out infrastructure. The Trump administration, upon taking office, paused disbursements from the infrastructure bill and later rebranded aspects of the program to remove what it called “unnecessary regulatory barriers,” as outlined in a fact sheet from the National Telecommunications and Information Administration. This shift emphasizes deregulation, arguing that mandates like California’s would stifle ISP investment and innovation.

Origins of the Affordable Broadband Push

The now-defunct proposal stemmed from Assembly Bill 353, introduced by Democratic Assemblymember Tasha Boerner in January 2025. The bill targeted large ISPs, requiring them to provide 100 Mbps download and 20 Mbps upload speeds at the $15 price point for qualifying low-income households. As detailed in a Techdirt analysis, telecom lobbyists had already watered down the legislation before federal intervention, but the core mandate remained until the recent pullback.

California’s broader broadband strategy dates back to 2021, when Governor Gavin Newsom signed Senate Bill 156, allocating $6 billion for fiber infrastructure to serve unserved and underserved populations. This built on federal approvals, including the Biden-Harris administration’s nod for California’s “Internet for All” plan in 2024, which unlocked BEAD funds, per announcements from the National Telecommunications and Information Administration. However, the Trump team’s January 2025 executive order halting infrastructure funding threw these projects into uncertainty, as reported by StateScoop.

Industry Reactions and Broader Implications

ISP giants like AT&T and Comcast, which lobbied heavily against the bill, welcomed the development, arguing that forced pricing would undermine their ability to recoup infrastructure costs in a competitive market. Industry insiders note that without such mandates, providers might focus on premium services, potentially widening the affordability gap for low-income users.

Critics, including consumer advocates, warn that this sets a dangerous precedent for federal overreach into state telecom policies. A state lawmaker quoted in the Ars Technica piece emphasized the irony: “We’re being bullied into abandoning affordability to secure funds meant for access.” This comes amid parallel federal changes, such as the FCC’s proposal to scrap gigabit-speed goals and broadband price analyses, deemed “extraneous” by Chairman Brendan Carr, as covered in recent Ars Technica and The Register reports.

Looking Ahead: Policy Shifts and Uncertainties

As California rethinks its approach, options include voluntary ISP programs or seeking alternative funding, though experts doubt their efficacy without mandates. The episode underscores the fragility of public-private partnerships in broadband deployment, especially under shifting administrations.

For industry players, the retreat signals a deregulatory wave that could accelerate mergers and reduce oversight, but at the potential cost of leaving millions without affordable options. As one telecom analyst put it, “This isn’t just about $15 plans—it’s about who controls the future of America’s digital infrastructure.” With BEAD funds still in limbo, states nationwide are watching closely, recalibrating their strategies to avoid similar federal clashes.