That 'One Big Beautiful Bill' tried to tie AI deregulation to broadband funding

It boiled down to whether your state would allow generative AI companies to get away with whatever they want — if not, there would have been no broadband funding for you!

(Editor’s note: After this story was posted, the US Senate dropped the controversial measure from the spending bill.)

There is so much to hate about the “One Big Beautiful Bill” now making its way through Congress. And among the things near the top of my list is how it deals with various tech industry issues — especially the proposed freeze on state and local governments’ ability to regulate generative AI (genAI). 

If passed, it would prevent states from enacting or enforcing laws aimed at curbing genAI-related harms, such as deep fakes, algorithmic discrimination, and misuse of personal likenesses. Its supporters, such as Senate Commerce Chair Ted Cruz, (R-TX), say it’s a way to prevent a fragmented regulatory landscape that, they argue, could stifle innovation and US competitiveness against China. 

Yeah, right. It’s really just a giveaway to genAI companies to do whatever they want with any of your data they can hoover up. Given that the courts have recently decided that these companies can essentially get away with ignoring copyright laws, I foresee great times ahead for them, while everyone else gets taken to the cleaners.

I’m far from the only one who’s ticked off. Even some Republicans aren’t crazy about giving genAI companies a blank check for your data. Over the weekend, the provision was revised after negotiations between Cruz and Sen. Marsha Blackburn (R-TN). The latest version reduces the ban from 10 years to five.

The new language also introduces exemptions for state laws targeting unfair or deceptive practices, child safety, child sexual abuse material, and publicity rights. However, the states of Alabama, Arizona, California, Delaware, Hawaii, Indiana, Montana, and Texas have already made it illegal to distribute deceptive genAI-generated political ads and “news,” and would likely see their laws rendered ineffective. Funny that, eh? 

In addition, the stick being used to ensure states don’t try to get in genAI’s way is that if they do, they won’t get $500 million in new federal funds for AI infrastructure and deployment. On top of that, broadband funding from the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program is also being held hostage.

Under Cruz’s proposal, states that enact or enforce AI regulations risk losing access to both new and already-allocated BEAD funds. If they don’t kowtow to Republicans and their genAI supporters, they can’t improve your broadband.

In other words, if states pass genAI regulations, they can’t have BEAD money to bring broadband access to poor and rural residents. The provision triggered an extraordinary backlash from state officials. In early June, 260 state lawmakers from all 50 states, Democrats and Republicans alike, sent a letter to Congress condemning the moratorium as an assault on state sovereignty and consumer protection. 

They argue that states have been at the forefront of regulating genAI to address real-time harms and that a years-long federal preemption would “cut short democratic discussion of AI policy in the states with a sweeping moratorium that threatens to halt a broad array of laws and restrict policymakers from responding to emerging issues.”

The opposition is not limited to state-level Republicans. Hard-line Republicans, including Marjorie Taylor Greene, (R-A.), Josh Hawley, (R-MO), Rand Paul, (R-KY), and Ron Johnson, (R-WI), have joined Democrats in calling the provision federal overreach that undermines states’ rights. I never thought I would agree on anything with Greene and the rest, but here we are. She has threatened to withdraw her support for the entire bill over the issue. 

The timing of the provision is particularly obnoxious; after years of delay, $42.5 billion in BEAD funding had finally been allocated under the Biden administration. Then in June, the Trump administration rewrote BEAD’s rules and dumped all the previously awarded contracts. 

Now, internet service providers (ISPs) that had been awarded funding must re-bid for the same contracts. Worse still, under President Donald J. Trump’s “tech-neutral” approach, companies such as Elon Musk’s Starlink will now get billions more. How much more? Under the original BEAD rules, Starlink would have gotten up to $4.1 billion. The new Musk-friendly approach could boost Starlink’s share to as much as $20 billion. 

It must be nice to have friends in the White House. 

Of course, in the meantime, poor and rural users will still be denied access to high-speed broadband for another few years because of the BEAD delays. The Senate parliamentarian has ruled that the genAI rules moratorium can remain in the reconciliation bill, provided it is tied only to the new $500 million in funding — not the broader $42.5 billion BEAD allocation. Even so, a close reading of the bill’s language suggests that states could still be at risk of losing BEAD funding. In short, as Sen. Maria Cantwell, (D-WA), pointed out earlier, this provision “forces states receiving BEAD funding to choose between expanding broadband or protecting consumers from AI harms for 10 years.”  

So, what’s going to happen? Well, for one thing, that Big Beautiful Bill won’t pass by the 4th of July. Sorry Trump. Even if the Senate does manage to pass it in the next few days, the Senate and House still have to hammer out the differences between their bills and then pass the final revision. There’s simply not enough time.

Ultimately, though, some version of the legislation will pass. Very few Congress members are willing to stand up to Trump when push comes to shove. And that means  AI companies will be allowed to operate without any legal guardrails, and rural broadband will continue to roll out at an ever slower pace.