August 19, 2026
By Rachelle Chong, Law Office of Rachelle Chong, a former Commissioner of the Federal Communications Commission and California Public Utilities Commission
A recent debate over California’s Proposition 45 has raised a surprisingly basic question: “Are data centers eligible for the measure’s streamlined review process?”
As a former Commissioner of both the Federal Communications Commission and the California Public Utilities Commission, and as an attorney who has spent decades working on telecommunications law, the clear answer is no.
The issue has arisen because Proposition 45—the Building an Affordable California Act—would establish streamlined review procedures for several categories of “essential projects,” including certain broadband projects. A recent Legal Planet article by UC Berkeley Professor Eric Biber suggests that the broadband language could be broad enough to reach data centers, and separately, that the “whole of the project” language could potentially bring a data center within a qualifying project.1 His interpretation gives too little weight to some very important words in the measure.
Proposition 45 does not say that every project that transmits data, connects to fiber, or contributes to the Internet qualifies as a broadband project. Instead, Prop 45 specifically defines an “essential broadband Internet access project” as a project that provides “mass- market retail service by wire service, wireless service, or radio to customers” and enables those customers to transmit data to and receive data from substantially all Internet endpoints.2
In plain English, that describes Internet access purchased from a retail Internet service provider, like Comcast, AT&T or Charter. When a family or small business pays an Internet service provider for home broadband, the Internet service provider gives them each access to the Internet.
A conventional data center ordinarily performs an entirely different function. A data center typically houses servers. It may store enormous quantities of information. It may run cloud applications or artificial-intelligence systems. It may host websites or help deliver videos and other online content. It may purchase very large amounts of telecommunications capacity.
But that does not make the data center the company providing a consumer’s Internet connection as a retail service.
The regulatory history makes this distinction even clearer.
The language in Proposition 45 closely follows California Government Code section 53167, and that statute in turn uses a definition developed by the Federal Communications Commission, the federal agency in charge of telecommunications regulation. The FCC has used the phrase “broadband Internet access service” (“BIAS”) for many years and across very different regulatory approaches to broadband.3
In plain English, BIAS means a mass market retail service that gives families and small businesses access to the Internet.
Most importantly for today’s issue, the FCC has expressly distinguished BIAS from content delivery networks, hosting services, data-storage services, and individually negotiated enterprise services.4 That long standing FCC distinction directly cuts against the argument that a conventional data center becomes a broadband Internet access provider merely because it stores, processes, or delivers information carried across the Internet.
The distinction survived even through the long-running dispute over “net neutrality.” The FCC has changed its position several times about whether broadband Internet access should be regulated as a telecommunications service under Title II of the Communications Act. In 2025, the Sixth Circuit set aside the FCC’s most recent attempt to impose Title II regulation.5 But that dispute was about how Internet access providers should be regulated, not about whether data centers are Internet access providers.
Indeed, the Sixth Circuit court described companies such as Spectrum, Xfinity, and AT&T Internet as broadband Internet service providers that connect end users to Internet “edge providers”— companies and services such as Netflix, Amazon, Facebook, and Google.6 The court further explains that edge providers “store” information in the cloud and “transform” and “process” information through cloud computing and machine-learning capabilities, while broadband providers merely connect consumers to those edge-provider services.7
That distinction is useful here. The Internet service provider company providing the Internet connection occupies a different place in the Internet ecosystem from the edge provider companies providing the content, computing, storage, and applications reached through that connection.
There is also a common-sense way to look at the issue. Hospitals are major users of electricity, but hospitals are not electric utilities. Airports depend on roads to bring customers to it, but airports are not highways. Likewise, a data center can use enormous amounts of broadband capacity and can be important to the operation of the Internet without itself providing mass-market retail Internet access to customers.
What about the “whole of the project” issue?
Proposition 45 says that an “essential project” can include certain related and ancillary infrastructure, including infrastructure included in an application as part of the “whole of the project.” Professor Biber suggests that a developer could potentially combine qualifying fiber infrastructure with a data center and argue that both are part of one essential project.8
But that argument does not change the threshold question of what qualifies as an “essential project” in the first place. Proposition 45 first requires a project to fall within one of the measure’s specifically defined categories. It then allows certain related and ancillary infrastructure needed to serve that qualifying essential project to be included within the project.
In other words, the ancillary-infrastructure provision describes what supporting infrastructure may accompany an essential project; it does not erase the underlying definition of the essential project itself.
Reading the measure otherwise would allow the ancillary-infrastructure provision to swallow the carefully drawn definitions that precede it.
Today, almost every modern hospital, university, warehouse, office complex, research facility, financial institution, and technology company depends on Internet connectivity. Proposition 45 does not turn every Internet-connected building into a “broadband Internet access project.”
If Internet connectivity alone were enough, there would have been no reason for Proposition 45 to expressly require a broadband project to provide “mass-market retail service . . . to customers.”
Professor Biber also points to the measure’s direction that its provisions be interpreted to favor realization of essential projects. However, an instruction to construe a statute broadly does not permit a court to disregard an express threshold requirement – here, that the broadband project provide a “mass market retail service” to customers.
The better reading is the more natural one: Proposition 45’s broadband provision covers projects that provide retail customers with broadband Internet access. It does not cover a conventional data center merely because the data center is connected to, uses, stores information from, or helps support the Internet. That distinction is both technologically sensible and consistent with the language regulators have used for broadband Internet access for more than fifteen years.
1 Eric Biber, BACA and Data Centers, Part I, Legal Planet (June 24, 2026). The article focuses both on the broadband definition and on the measure’s separate “whole of the project” language.
2 Proposition 45, Building an Affordable California Act, proposed Pub. Res. Code § 21028(i)(1).
3 See Cal. Gov’t Code § 53167(a); Preserving the Open Internet; Broadband Industry Practices, GN Docket No. 09-191, WC Docket No. 07-52, Report and Order, 25 FCC Rcd 17905, 17932, paras. 44–45 (2010) (“2010 Open Internet Order”); Protecting and Promoting the Open Internet, GN Docket No. 14-28, Report and Order on Remand, Declaratory Ruling, and Order, 30 FCC Rcd 5601, 5682–84, paras. 187–90 (2015) (“2015 Open Internet Order”); Restoring Internet Freedom, WC Docket No. 17-108, Declaratory Ruling, Report and Order, and Order, 33 FCC Rcd 311, 318–20, paras. 21–25 (2018) (“RIF Order”).
4 2015 Open Internet Order, 30 FCC Rcd at 5683–84, paras. 189–90, 5749, para. 340; RIF Order, 33 FCC Rcd at 318–20, paras. 21, 24–25; Safeguarding and Securing the Open Internet, WC Docket No. 23-320, Declaratory Ruling, Order, Report and Order, and Order on Reconsideration, FCC 24-52, paras. 191, 210 (2024) (“2024 Open Internet Order”).
5 In re MCP No. 185, 124 F.4th 993 (6th Cir. 2025).
6 In re MCP No. 185, 124 F.4th 993, 996 (6th Cir. 2025).
7 In re MCP No. 185, 124 F.4th 993, 1003–04 (6th Cir. 2025) (stating that “[e]veryone agrees” that edge providers offer information services and distinguishing those services from broadband Internet access); Safeguarding and Securing the Open Internet, WC Docket No. 23-320, Declaratory Ruling, Order, Report and Order, and Order on Reconsideration, FCC 24-52, para. 105 (2024).
8 Proposition 45, proposed Pub. Res. Code § 21028(m)(1)(B); Biber, supra note 1.