California is on the brink of accepting $1.86 billion in federal broadband grant funds, but only if it sacrifices its state net neutrality law. The Trump administration stipulated that states must exempt internet service providers (ISPs) receiving funds from net neutrality rules, effectively pressuring California to choose between its long-standing law and financial incentives.

California's net neutrality law prohibits ISPs from blocking or throttling lawful traffic and prevents them from requiring fees from websites or online services for prioritized delivery. However, the second Trump administration is seeking to make federal broadband money conditional on states agreeing not to enforce these rules. This move is similar to the federal net neutrality rules that were repealed during the first Trump administration.

Trump's National Telecommunications and Information Administration (NTIA) requires states participating in the $42 billion Broadband Equity, Access, and Deployment (BEAD) program to exempt ISPs from net neutrality rules and price regulations in all areas of the state, not just where funding is deployed. The exemption would last for up to 14 years. California and Illinois are the only states that haven't finalized their BEAD plans, according to the NTIA's progress dashboard.

Tomorrow, the California Public Utilities Commission (CPUC) is scheduled to vote on a resolution to ratify the state's final BEAD plan. This decision could set a precedent for other states, potentially altering the landscape of internet regulation in the United States.