Capping internet fees will result in no service, Valley business group says | Opinion

Another year, and yet another attempt by the California Legislature is underway to make broadband more affordable by meddling with the market. And predictably, the way the Affordable Home Internet Act of 2025 is written would cause serious unintended consequences, reversing efforts to achieve universal access to high-speed internet — especially in rural communities that remain underserved, or unserved altogether.

AB 353, from San Diego Assemblymember Tasha Boerner, would impose a price cap on internet service at $15 per month, ostensibly to benefit any household that already qualifies for government assistance programs like SNAP or Medicaid. Regardless of the actual costs involved in bringing fast, reliable internet to these homes, Internet Service Providers, or ISPs, would be forced to either charge no more than the government-imposed rate – or to simply quit providing service altogether.

The Central Valley Business Federation, a coalition of more than 80 businesses and professional trade associations, has long advocated for policies that promote jobs, economic development, and growth in the Valley. Our board feels strongly about the need to ensure everyone living in California’s breadbasket can access the reliable broadband and internet services that keep families – and our economy – thriving.

We agree with the bill’s author that the benefits of expanding broadband connectivity are many. Folks living in our state’s rural places would see greater educational opportunities, economic prospects, and improved access to healthcare. The positive results would spread throughout California and beyond. For example, the Central Valley alone produces more than a third of the country’s vegetables and two-thirds of America’s fruit and nuts. Beside benefitting individuals, further integrating new technology enabled by high-speed broadband would help farmers, growers, and ranchers achieve even greater productivity and profitability. And that’s good for everyone.

But if this bad bill passes out of the legislature and is ultimately signed into law by Gov. Newsom, we fear the worst – ISPs would be forced into giving up on rural areas for good – exactly the opposite of what the author intends. It’s Business 101, folks. ISPs make the bulk of their revenue by operating in high-density areas where there are enough full-price customers to justify capital investment in either setting up or maintaining network infrastructure.

But in rural areas, that business model doesn’t always pencil out. Almost by definition, the artificial price ceiling mandated by AB 353 would erect a barrier to investment in the very sorts of communities that need it most.

This would deter, rather than encourage, broadband deployment in rural communities across the state. And it would drag us backward, potentially leaving un- and under-served small businesses and families with even fewer options and slower internet speeds.

We recognize the need for a solution to the problem of broadband affordability in California. In fact, we are encouraged that our elected leaders are interested in the issue. But AB 353 leaves rural Californians paying the price. This bill would shrink competition, reduce investment and likely raise internet prices for everyone in the long run.

And in what might be the worst unintended consequence of AB 353, hardworking lower-income families who earn just above the bill’s income threshold would see their own monthly rates skyrocket to subsidize neighbors who earn just a bit less than they do. That’s simply not fair.

Solutions must be found that incentivize corporate investment, create consumer options, and support broadband expansion to give rural Californians the tools and resources they need to navigate daily life in the 21st century. The stakes are high. If our lawmakers want to facilitate better internet connectivity, it’s critical they get it right.

Millions of Californians who make their homes in the state’s rural areas are counting on them.