WASHINGTON, Dec. 13, 2025 — President Donald Trump signed an executive order on December 11, 2025, titled Ensuring a National Policy Framework for Artificial Intelligence, that establishes a new federal strategy on artificial intelligence (AI) regulation and directly links states’ eligibility for certain Broadband Equity, Access and Deployment (BEAD) Program non-deployment funds to their alignment with the federal government’s AI policy goals. This linkage introduces significant ambiguity for State Broadband Offices and Internet Service Providers (ISPs) regarding funding continuity, capital planning, and regulatory compliance.
The order’s central policy objective is to foster “United States leadership” in AI by limiting what the administration describes as “excessive” or “onerous” state AI laws that could create a fragmented regulatory landscape, complicate compliance for technology firms, and allegedly hamper national innovation. To achieve this, the executive order directs federal agencies to take a series of actions, including litigation against state AI laws deemed inconsistent with federal policy and conditioning specific federal grants on state AI regulatory alignment.
A critical provision mandates that the Department of Commerce issue a policy notice within 90 days defining how states’ BEAD non-deployment fund eligibility will be determined based on an evaluation of state AI laws. States with “onerous” AI regulation, as identified by this federal review, could be made ineligible for those BEAD funds “to the maximum extent allowed by Federal law.”
BEAD, established under the Bipartisan Infrastructure Law and administered by the National Telecommunications and Information Administration (NTIA), provides $42.45 billion in federal funds to states for broadband deployment in underserved areas, including a portion earmarked for non-deployment purposes such as planning, adoption, and workforce development. While many states have already received BEAD deployment approvals, the status of tens of billions of dollars in non-deployment funds remains unresolved — a situation now complicated by the executive order’s new conditions.
State and ISP Concerns
State broadband officials and policymakers face an immediate policy dilemma: state autonomy in setting AI laws — including consumer protection, transparency, or algorithmic governance requirements — may now intersect with their ability to secure BEAD-related funds. Many such laws are newly enacted; others are under consideration in legislatures across the country. Legal experts widely predict that this unprecedented federal conditioning of broadband funds on AI policy compliance could face constitutional challenges, particularly on federalism and Spending Clause grounds, with critics arguing it amounts to coercion of states.
ISPs and broadband consortia simultaneously confront capital planning uncertainties. Broadband providers typically model long-term infrastructure investments — including fiber extensions and last-mile solutions — on assured federal funding streams. New conditions tied to an external domain, such as AI regulation, could alter those models, especially for providers operating multi-state networks where regulatory landscapes differ. Analysts note that the ambiguity over what qualifies as “onerous” or “conflicting” AI regulation will likely prompt both industry and state governments to request detailed federal guidance before committing to capital expenditures predicated on BEAD non-deployment funds.
Legal and Political Pushback
The executive order has generated swift reactions from civil rights advocates, state officials, and legal analysts. Some state leaders and public policy groups have condemned the order as an infringement on states’ rights to legislate in areas they consider vital to consumer safety and digital equity, calling for judicial review and legislative clarification. Others see the federal posture as an overreach that could chill innovative regulatory approaches tailored to local needs.
Multiple legal commentaries emphasize that executive orders cannot, on their own, preempt state law or alter statutory grant conditions without explicit congressional authorization. As such, some proponents of state autonomy expect litigation on constitutional grounds, particularly regarding whether the federal government can lawfully tie BEAD funding — which Congress appropriated for broadband equity purposes — to unrelated AI policy compliance.
Additionally, industry associations and technology policy observers argue that a uniform national AI regulatory framework may be desirable to avoid fragmentation, but contend that the executive order’s means — leveraging broadband funding — could undermine BEAD’s core mission: closing the digital divide.
Outlook for Federal-State Dynamics
The executive order also establishes an AI Litigation Task Force to challenge state laws that are inconsistent with the federal AI policy. It directs federal agencies, including the Federal Communications Commission (FCC) and Federal Trade Commission (FTC), to develop complementary regulatory approaches. However, the design and outcome of these actions — and their interactions with congressional intent and statutory authority — remain uncertain.
State broadband leadership, industry stakeholders, and legal experts are watching closely as the 90-day deadlines unfold. Amid this evolving landscape, the Biden Administration’s earlier AI policy approaches and the new federal emphasis on preemptive uniformity highlight the broader tension between national strategy and decentralized governance.
President Trump’s December 2025 executive order conditioning BEAD non-deployment funds on state compliance with federal AI policy introduces a significant, multi-dimensional uncertainty for state broadband offices and broadband providers. While aimed at creating a unified national AI regulatory framework, the order’s interdependence between AI regulation and broadband funding is unprecedented, risking legal challenges and impeding long-term infrastructure planning. Its significance extends beyond broadband and AI, symbolizing a broader federal-state governance confrontation with potential ramifications for future technology policy and funding programs.
