State Rate Regulation of Broadband Risks Regulatory Takings Violation

On April 30, a committee in the California Assembly will hold a hearing on proposed legislation that would dictate rates for interstate broadband information services. Intended to promote affordability, the California bill would unwisely subject broadband service providers to price controls of $15 per month. But state-level rate regulation takes away broadband providers’ ability to set their prices in the free market, directly undermining their returns on investment in their network property. By substantially depriving broadband providers of the use and value of their private network property, state rate regulation raises serious constitutional questions under the Supreme Court’s regulatory Takings Clause doctrine.