Policy

California’s legislature this week approved a bill to let renters opt out of bulk-billing arrangements that force them to pay for Internet service from a specific provider.

The bill says that by January 1, a landlord must “allow the tenant to opt out of paying for any subscription from a third-party Internet service provider, such as through a bulk-billing arrangement, to provide service for wired Internet, cellular, or satellite service that is offered in connection with the tenancy.” If a landlord fails to do so, the tenant “may deduct the cost of the subscription to the third-party Internet service provider from the rent,” and the landlord would be prohibited from retaliating.

The bill passed the state Senate in a 30–7 vote on Wednesday but needs Gov. Gavin Newsom’s signature to become law. It was approved by the state Assembly in a 75–0 vote in April.

Assemblymember Rhodesia Ransom, a Democratic lawmaker who authored the bill, told Ars today that lobby groups for Internet providers and real estate companies have been “working really hard” to defeat it. But she expects Newsom will approve.

“I strongly believe that the governor is going to look at what this bill provides as far as protections for tenants and sign it into law,” Ransom said in a phone interview.

“Just treat people fairly”

Ransom disputed claims from lobby groups that bulk billing reduces Internet prices for tenants.

“This is kind of like a first step in trying to give this industry an opportunity to just treat people fairly. It’s not super restrictive. We are not banning bulk billing. We’re not even limiting how much money the people can make. What we’re saying here with this bill is that if a tenant wants to opt out of the arrangement, they should be allowed to opt out,” she said.

A stricter bill could have told landlords that “you can’t charge the customer more than you’re paying. We could have put a cap on the amount that you’re able to charge,” she said. “There’s so many other things that we could have done that would’ve been a lot less business-friendly. But the goal was not to harm business, the goal was to help people.”

In theory, bulk billing could reduce prices for tenants if discounts negotiated between landlords and Internet providers were passed on to renters. But, Ransom said, “where there would be an opportunity for these huge discounts to be passed on to tenants, it’s not happening. We know of thousands of tenants across the state who are in landlord-tenant agreements where the landlord is actually adding an additional bonus for themselves, pocketing change, and not passing the discount on to the tenants… once we started working on this bill, we started to hear more and more about places where people were stuck in these agreements and their landlords were not letting them out.”

Ransom said not all landlords do this and that it is generally “the large corporate landlords” who own hundreds or thousands of properties that “were the ones who were reluctant to let their tenants out.”

State bill similar to abandoned FCC plan

California’s action comes about eight months after the Federal Communications Commission abandoned a proposal to give tenants the right to opt out of bulk billing for Internet service. The potential federal action was proposed in March 2024 by then-FCC Chairwoman Jessica Rosenworcel, but nixed in January 2025 by Chairman Brendan Carr.

Bulk billing contracts are only banned by the FCC when they give a provider the exclusive right to access and serve a building. Despite that restriction, a bulk billing deal between an ISP and landlord can make it less financially feasible for other providers to serve a multi-unit building. Letting people opt out of bulk billing arrangements makes serving a building at least slightly more viable for a competing provider.

Ransom said the FCC action “was very unfortunate” and “give[s] a disadvantage to people who are already at the mercy of landlords.”

Cable lobby calls it an “anti-affordability bill”

The California bill was not welcomed by lobby groups for Internet providers and landlords. The California Broadband & Video Association, which represents cable companies, paid for a sponsored commentary in several news publications to express its opposition.

“AB 1414 is an anti-affordability bill masked as consumer protection, and it will only serve to widen the digital divide in California,” wrote the lobby group’s CEO, Janus Norman.

Norman complained that property owners would have “to provide a refund to tenants who decline the Internet service provided through the building’s contract with a specific Internet service provider.” He argued that without bulk billing, “low-income families and tenants risk losing access altogether.”

Letting tenants opt out of bulk deals “undermines the basis of the cost savings and will lead to bulk billing being phased out,” Norman wrote. This “will result in higher bills for everyone, including those already struggling,” he claimed.

“The truth, very simply, is this: bulk billing is good for consumers,” the cable industry commentary said. “Taking away bulk discounts raises total housing costs when Californians can least afford it.”

The bill also drew opposition from the Real Estate Technology & Transformation Center (RETTC). The group’s sponsors include real estate companies and Internet providers AT&T, Comcast, and Cox. Another notable sponsor of RETTC is RealPage, which has faced claims from the US government and state attorneys general that its software distorts competition in rental housing by helping landlords collectively set prices.

“AB 1414 introduces an opt-out requirement that would fundamentally undermine the economics of bulk billing,” the RETTC said. “By fragmenting service, it could destabilize networks and reduce the benefits residents and operators rely on today.” The group claimed the bill could lead to “higher broadband costs for renters, reduced ISP investment in multifamily housing, disruption of property-wide smart technology, [and] widening of the digital divide in California.”

The RETTC said it joined with the National Apartment Association and the California Rental Housing Association to detail the groups’ concerns directly to the bill sponsors.

Wireless providers could get a boost

The California Broadband & Video Association seems to be worried about wireless providers serving buildings wired up with cable. The group’s commentary claimed that “the bill’s lack of technology neutrality also creates winners and losers, granting certain types of providers an unfair advantage over their competitors.”

Ransom said her bill may be especially helpful for wireless or satellite providers because they wouldn’t need to install wires in each building.

“This does help with market competition, and in fact some of our support came from some of the smaller Internet service providers… and because this bill is technology-neutral, it helps with not only the current technology, but any new technology that comes out,” she said.

While Ransom’s bill could help make broadband more affordable for renters, California lawmakers recently abandoned a more aggressive effort to require affordable broadband plans. Assemblymember Tasha Boerner proposed a state law that would force Internet service providers to offer $15 monthly plans to people with low incomes but tabled the bill after the Trump administration threatened to block funding for expanding broadband networks.