The Benton Institute for Broadband & Society has asked the question that I think many of us have pondered – are all of these change to BEAD legal? They recently posted an article from Tejas N. Narechania is a Professor of Law at the University of California, Berkeley, School of Law on the topic. He starts with the setup…

In 2021, President Biden signed the Infrastructure Investment and Jobs Act (IIJA), which allocated over $42 billion to the new Broadband Equity, Access, and Deployment (BEAD) Program to ensure high-speed Internet access for every American.[1] That money was allocated across 56 states and territories responsible for selecting the providers that will build connectivity to unserved and underserved locations.

After President Trump’s second inauguration, his administration implemented several changes to the BEAD Program. Among them are two new conditions on state funding.

First, the National Telecommunications and Information Administration (NTIA), announced that it would prohibit states from regulating broadband rates or imposing network neutrality rules on broadband providers,[2] even after several federal courts held that such rules fell within the states’ traditional, lawful powers. NTIA has since asked states to sign amended “Notices of Award”—documents governing BEAD grants—that purport to implement this prohibition statewide, even in locations not subsidized by BEAD (e.g., places with existing service).

Second, Executive Order No. 14,365 directs the Secretary of Commerce to identify “onerous” state laws regulating AI systems,[3] singling out Colorado’s prohibition against biased AI systems used for discriminatory purposes as an example.[4] The Executive Order then declares that any state with an onerous law will be deemed ineligible for certain “nondeployment” BEAD funds. As of April 2026, the Commerce Secretary has yet to release this “naughty list” of AI laws.

Both conditions are unlawful.

The author goes on to explain that both conditions are inconsistent with the text of the IIJA and other statutory provisions, there’s no federal power to preempt state AI and broadband regulation and federal authorities doesn’t have the power to regulate and to preempt state regulation. The explanations in the article are more complete and succinctly explained. It’s worth checking out the full article.