In deregulating net neutrality, the FCC has forfeited its chance to regulate (or at least prevent state-level regulation of) broadband affordability
California is the most recent state to consider implementing a mandated social tariff for home broadband, following New York
On 24 March 2025, the California Affordable Home Internet Act (CAHIA) was introduced into the California state legislature. The bill, which was preliminarily introduced to the body in January 2025 without any finalised provisions, would require ISPs operating within the state to offer an “affordable home internet service” to all eligible households as defined by the law. The text of the CAHIA references both the state’s Digital Equity Bill of Rights of 2023, which guarantees consumers equal access to broadband services to the extent that is technically feasible, and the state’s California Internet Consumer Protection and Net Neutrality Act of 2018, the first state-level net neutrality law in the country. The proposal also follows on from the example of New York’s Affordable Broadband Act (ABA), which took effect in January 2025 and is the first example of a regulated social tariff in the US. Legislators in Massachusetts and Vermont have also introduced similar legislation mandating the provision of an affordable tariff at the state level.
The CPUC estimates that the CAHIA would result in nearly $100m in savings for consumers and just a 1% reduction in revenue for operators
The CAHIA would require that any ISP offering services in California offer and appropriately advertise a tariff costing no more than $15 (£12) per month and providing speeds of at least 100/20Mbps. Only consumers receiving a qualified benefit, such as disability support or food assistance payments, would be eligible to purchase the tariff, and ISPs would be required to report on adoption of the tariff annually to the state from 2027 onward. According to a report from the Public Advocates Office of the California Public Utilities Commission (CPUC), which regulates telecoms at the state level, about 500,000 low-income consumers in the state currently pay an average of $30 (£24) for a similar low cost service, reflecting a price point that originally corresponded to the subsidies offered by the now discontinued federal Affordable Connectivity Program. The report estimates that if those consumers were all to migrate to the $15 tariff mandated by the CAHIA, it would result in a nearly $100m (£78m) overall consumer saving and a combined revenue reduction of less than 1% among the four largest operators in the state. The CPUC does acknowledge that this analysis does not account for the likelihood that some of the approximately 850,000 eligible households that currently pay more for a higher service level may migrate to the social tariff. However, the regulator also suggests that the introduction of the social tariff could incentivise more of the 5.8m total low-income consumers in California to get connected, thereby expanding the overall customer base.
By reclassifying ISPs under the Communications Act, the FCC gave up its powers to set national affordability standards
The debate around whether and how to improve affordability for broadband in the US as well as who holds jurisdiction over affordability has been particularly active in recent years. The introduction of the CAHIA and other laws similar to New York’s ABA was made possible only by a court decision ruling that the FCC’s reclassification of ISPs under the Communications Act – a decision more commonly referred to in the context of regulating net neutrality – also made way for states to regulate pricing in the absence of national regulation. The inclusion of a requirement that ISPs maintain an affordable tariff in order to receive funding from the Broadband Equity, Access, and Deployment (BEAD) Program was also a consistent point of contention throughout the Biden Administration. Critics of the requirement suggested that the National Telecommunications and Information Administration (NTIA), the regulator responsible for enforcing that requirement, was attempting to regulate broadband pricing, which is a power reserved for the FCC and/or state governments. The NTIA’s initial standards for affordability under BEAD, which aligned with the CAHIA’s 100/20Mbps but allowed states to largely determine the pricing of those plans based on local market conditions, are likely to change as the Trump Administration reviews the programme in the coming months.
Questions remain about whether these affordability mandates have lessened competition, particularly from FWA and satellite providers
Both in the context of the BEAD Program and state-level affordability measures such as the CAHIA, questions have arisen around whether social tariff obligations have resulted in a lessening of competition. Following the passage of the ABA, AT&T announced it would exit New York and cease offering its fixed wireless access (FWA) service there to avoid social tariff obligations. Starlink has similarly applied for an exemption from ABA obligations on the basis of its limited consumer base in the state and the far greater costs of operating satellite-based services compared to terrestrial connectivity. Particularly as the Trump Administration and the FCC emphasise the cost-saving potential of a technologically neutral approach to the BEAD Program and closing the digital divide more broadly, social tariff obligations that appear to more heavily disincentivise FWA and satellite firms could set up another point of tension between state and federal level telecoms regulators in the US.
