Newsom Urged to Reject $1.4 Billion from BEAD over Net Neutrality
Consumer advocates say a federal grant requirement could limit California’s oversight of broadband providers
WASHINGTON Oct. 26, 2026 — California consumer advocates are urging Gov. Gavin Newsom to reject a federal broadband funding condition they say could limit the state’s ability to enforce consumer protections for internet and phone service.
The Utility Reform Network (TURN), joined by telecommunications experts and consumer advocacy groups, said Oct. 21 that California should not accept $1.42 billion in federal Broadband Equity, Access, and Deployment (BEAD) funding without removing Condition 50.
The condition, included in the National Telecommunications and Information Administration’s November 2025 grant terms, restricts states from enforcing certain laws regulating broadband rates, service terms and net neutrality against BEAD-funded providers and their affiliates. The restriction can extend to those companies’ service outside federally funded areas, according to the Benton Institute for Broadband & Society’s analysis of the terms.
TURN said the condition could undermine California’s net neutrality rules, network reliability requirements and efforts to keep phone and internet service affordable.
“It’s no secret that AT&T and Verizon are trying to get out of their obligation to provide basic service in California and are trying to use the FCC to undermine California,” said Mark Toney, executive director of TURN. “Condition 50 is just another attempt to evade state regulation and undermine consumer protections.”
Toney said the state should consider rejecting the funding rather than risk weakening its consumer protections.
Advocates also warned that Condition 50 could affect California’s carrier-of-last-resort requirements, which are intended to ensure access to basic telephone service, including in rural communities. TURN further argued that the condition could give providers grounds to challenge state fees supporting California LifeLine, a program that helps eligible low-income residents afford phone service.
John Bergmayer, legal director of Public Knowledge, said the condition could threaten the state’s ability to protect consumers and hold broadband providers accountable for their commitments.
“Gov. Newsom should demand that this condition be removed and, if necessary, challenge it in court,” Bergmayer said.
California has already received federal approval for its BEAD plan. The California Public Utilities Commission said the NTIA approved the state’s final proposal on July 17, and the commission ratified it Sept. 17. The proposal covers approximately $1.86 billion in broadband investments, according to the commission.
The dispute centers on whether accepting the federal funding requires California to limit its enforcement of certain state telecommunications rules. The advocates are calling on Newsom to challenge Condition 50 before the state proceeds with funding implementation.
