- The Trump Administration really does not want states to enact laws that restrict AI
- It’s drafted an Executive Order that would prevent states with AI laws from keeping BEAD non-deployment funds
- But, it’s widely expected that states won’t be allowed to keep their BEAD non-deployment funds, anyway
The Trump administration is considering an executive order (EO) to override state AI laws. And in a bizarre twist, the Broadband Equity, Access and Deployment (BEAD) program could get caught in the crosshairs.
The news outlet Transformer has published the full draft of the EO. But it’s important to note that this is only a draft, which could be modified, or never signed, by Trump.
The draft EO entitled "Eliminating State Law Obstruction of National AI Policy" says that to win the global AI race, American companies must be free to innovate without a bunch of state laws regulating different aspects of the technology. It noted that California and Colorado have already implemented laws putting restrictions on AI. The draft says that a patchwork regulatory framework would force everyone to comply with the most restrictive states.
To counter these concerns, the EO would establish an AI Litigation Task Force whose sole responsibility would be to challenge state AI laws.
What in the world does any of this have to do with BEAD?
Section 5 of the EO says that states with AI laws would be ineligible to receive remaining non-deployment funds from BEAD.
That’s an interesting inclusion because it’s not at all clear, at this point, what the National Telecommunications and Information Administration (NTIA) plans to do with all the non-deployment funds from BEAD.
During the Biden administration, it appeared that some states would have millions of dollars of left-over BEAD funds after they had connected all their unserved locations to high-speed broadband. Those states were already strategizing how they might spend those non-deployment funds for such things as internet education and workforce development. There were other states, however, that expected to spend all their BEAD funds to reach unserved locations, and they weren’t anticipating any non-deployment funds.
That’s all been turned on its head now, since the Trump administration changed the rules of the BEAD program in June. States were required to award most of their bids to the lowest-cost bidders. This has resulted in about half of the $40.5 billion in BEAD funds not being used.
There’s been plenty of speculation that the Trump administration will simply claw these non-deployment funds back and deposit them into the national Treasury.
Fierce asked Blair Levin, policy analyst with New Street Research, about the possibility of states being allowed to keep their non-deployment funds if they don't enact AI regulations. Levin said, “Most of the states believe, based on their conversations with NTIA, that they are not getting the money anyway. So, this is weird in that it implies that the states will get the money but only if they agree to this unrelated rule.”
Of the plans laid out in the EO to discourage states from passing AI regulations, Levin said, “It is almost certainly illegal. For example, if the Biden NTIA had ruled that no non-deployment funds go to states that restrict abortion, I am 100% certain every Republican would have said that is illegal, and they would be right. There is nothing in the language of the legislation that gives NTIA or the president the authority to make this new requirement.”
A prior attempt to tie BEAD with AI laws
In June, the Senate Commerce Committee released a version of a budget reconciliation bill, which included a provision that tied BEAD funding to a 10-year ban on state AI laws.
Levin noted that the Senate voted down that proposal overwhelmingly. And he said, “The public is far more concerned about AI than excited about it (see this Pew study), including in red states which have adopted lots of laws.”