Washington, D.C. — Sen. Ted Cruz’s (R-TX) proposal to ban most state and local regulation of artificial intelligence (AI) could result in the loss of tens of billions of dollars in state broadband funding unless states comply with his AI pause, according to a new analysis from the Center for American Progress.
The analysis finds that, contrary to Cruz’s claims that his rebranded AI pause is solely an opt-in condition for states to access additional funds, the language in the bill implicates the entire $42.45 billion in funds obligated to the Broadband Equity, Access, and Deployment (BEAD) program.
Shortly after CAP’s analysis was published, Bloomberg reported that the Senate parliamentarian informed Sen. Cruz that the revised AI pause may violate the rules and advised that it be rewritten.
The analysis finds that the bill text gives the National Telecommunications and Information Administration—which administers the BEAD program—numerous tools to pressure or force states to comply with the AI pause or risk losing their full BEAD funding allocation. A recent tweet from Commerce Secretary Howard Lutnick stated that the bill would create “a single national standard for AI” that “ends the chaos of 50 different state laws,” suggesting that the head of the department overseeing the BEAD program does not view the AI pause as optional.
CAP’s analysis is based on the Senate Commerce Committee budget reconciliation text released on June 25.
“Despite these adjustments and the name change, the underlying policy goal of the AI pause remains the same: pressure states into giving up their ability to regulate AI in exchange for access to broadband and AI funding,” said Adam Conner, vice president of Technology Policy at CAP and co-author of the analysis. “Regardless of its name, the AI pause remains a deeply flawed and dangerous policy that wipes out most existing state AI laws and prevents states from passing new laws to protect their citizens.”
Read the analysis: “The Senate’s AI Pause May Take Billions in State Broadband Funds Hostage” by Adam Conner and Nicole Alvarez
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For more information or to speak with an expert, please contact Sam Hananel at [email protected].