Cruz Revises AI Moratorium, Claims it Doesn’t Target BEAD Funding
Revised moratorium relabeled as ‘voluntary’ and a ‘temporary pause’
WASHINGTON, June 25, 2025 – Senate Commerce Committee Chairman Ted Cruz, R-Texas, and Sen. Maria Cantwell, D-Wash., have a $40 billion disagreement.
The dispute is just one of many that has erupted in the Senate in the effort to pass the big reconciliation bill, which would restore FCC spectrum auction authority and require the agency to raise $85 billion from selling off the airwaves.
Cruz claimed he made significant modifications to the proposed moratorium on state AI regulation, and that the new moratorium would not put previously committed funds from the Broadband Equity, Access, and Deployment Program at risk. If true, this would mark a significant deviation from the original moratorium, which would have rescinded BEAD funding from states that refused to impose it.
FROM SPEEDING BEAD SUMMIT
Panel 1: How Are States Thinking About Reasonable Costs Now?
Panel 2: Finding the State Versus Federal Balance in BEAD
Panel 3: Reacting to the New BEAD NOFO Guidance
Panel 4: Building, Maintaining and Adopting Digital Workforce Skills
According to a press release issued Wednesday by the committee–officially the Senate Committee on Commerce, Science, and Transportation–“if-and only if-a state voluntarily chooses to receive a portion of this new $500 million federal investment to deploy AI, they must agree to [a temporary pause of certain AI regulatory enforcement]:”
The statement continued by emphasizing that “a state that does NOT voluntarily decide to receive a portion of the $500 million federal investment money does not have to adhere to any of these conditions. In other words, this pause in AI regulation is voluntary and not a federal mandate on states.”
When Broadband Breakfast asked Cruz’s office if states that decline to adopt the moratorium on AI regulation will still have access to funding from the BEAD program, a spokesperson for the office responded that “all BEAD funds have been obligated, and CBO has confirmed this applies only to the unobligated $500M.”
Cantwell disputed Cruz's claim moratorium wouldn't impact BEAD
Cantwell disputed Cruz’s claim that the new moratorium wouldn’t impact state BEAD funding.
“The newly released language by Chair Cruz continues to hold $42 billion in BEAD funding hostage, forcing states to choose between protecting consumers and expanding critical broadband infrastructure to rural communities,” she said in a press release. “Forty State Attorneys General oppose the AI moratorium that would leave every American vulnerable to AI-assisted fraud, theft, and abuse at a time when we should be strengthening consumer protections."
Cantwell’s press release claimed that “in documents released this morning, the Chair claims that the ten-year moratorium on states’ enforcement of AI laws applies only to a new $500 million appropriation. However, the bill’s text conditions the full $42 billion, likely resulting in a nationwide AI moratorium.” Her press release included an attached letter from the International Brotherhood of Teamsters that blasted the proposed moratorium.
Lutnick post about 'a single national standard for AI'
Cantwell’s comments came in response to a post from Commerce Secretary Howard Lutnick, who claimed that “by creating a single national standard for AI, the bill ends the chaos of 50 different state laws and makes sure American companies can develop cutting-edge tech for our military, infrastructure, and critical industries-without interference from anti-innovation politicians.”
It is unclear if the revised language will please Republican holdouts. The original AI moratorium faced a precarious situation in the Senate, with three Republicans: Sens. Marsha Blackburn, R-Tenn., Ron Johnson, R-Wis., and Josh Hawley, R-Mo., having stated that they opposed it.
Cruz may be working to change that. After a committee hearing held Wednesday morning, he called out to Blackburn, a vocal critic of the AI moratorium. The pair entered a side room, where they remained for approximately 20 minutes. When Broadband Breakfast approached Blackburn after she exited the room, she said that she didn’t do hallway interviews and walked briskly away.
When asked if he had spoken with Cantwell about the revised moratorium, and what she thought about it, Cruz told Broadband Breakfast that “we’re having ongoing conversations.”
The revised moratorium also earmarks $25 million of the $500 million allocated to be used by the National Telecommunications and Information Administration to negotiate Master Service Agreements with AI infrastructure suppliers.
