States Weighing Response to Trump's Cancellation of Digital Equity Funding

The administration canceled grants under the Digital Equity Act on Friday.

WASHINGTON, May 12, 2025 – State broadband offices and nonprofits received notice on Friday that digital equity grants had been canceled. States are weighing their next steps.

Toni Hamburg Clithero, general counsel for the Vermont Community Broadband Board, said at a public meeting Monday that the VCBB was meeting with the state attorney general’s office to discuss options, “up to and including filing a lawsuit that would address this head on, in terms of the constitutionality of this Congressional appropriation for these identified groups in need.”

President Donald Trump posted Thursday on his social media platform Truth Social that the Digital Equity Act was unconstitutional, calling the programs it funded “racist and illegal.” The cancellation notices came Friday evening.

The act allocated $2.75 billion for efforts to address barriers to broadband adoption that persist after infrastructure is put in place, like expensive devices or a lack of experience using digital services. The law specified eight “covered populations” that funded programs could target, including those living in rural areas, veterans, the elderly, people with disabilities, and racial and ethnic minorities.

Two major grant programs were funded by the law, a $1.44 billion program for state-led efforts and a $1.25 billion program for nonprofits and other entities. Vermont had been awarded $5.3 million to support a digital skills program, a refurbished device program, and workforce development. Board members said the state would stop work on that effort but would not have to reduce staff in the short term.

Clithero said she had contacted 37 states who had also received grant cancellation notices, and that state attorneys general were also in contact with each other to determine how to proceed. She said VCBB had also been in touch with Vermont’s Congressional delegation.

In its email to Vermont, the Commerce Department’s grants manager said Trump Commerce Secretary Howard Lutnick determined the digital equity program for states was itself unconstitutional, and “grants issued pursuant to it were created with, and administered using, impermissible and unconstitutional racial preferences.” It mirrored language sent to the nonprofit program participants.

In responses to Trump’s post before the cancellations came down, program supporters said it would be illegal to halt the Congressionally appropriated funding.

“As states have partnered with the U.S. Department of Commerce to ensure everyone in the U.S. can get and stay online, there has not been a single legal challenge to the Digital Equity Act,” Benton Institute for Broadband & Society Executive Director Revati Prasad said in a statement. “Neither President Donald Trump nor Commerce Secretary Howard Lutnick is empowered to declare a law unconstitutional.”

The National Telecommunications and Information Administration, the Commerce agency handling the grants, did not immediately respond to a request for comment.

“This announcement is deeply disappointing, and [Maine Connectivity Authority] is exploring Maine’s options to respond to the legality of the grant termination,” Maggie Drummond-Bahl, senior director of partnerships at MCA, said in a statement. “Our team is also evaluating how best to proceed with critical programming and investments that are currently underway with our existing plans and statewide digital equity strategy.”

Maine was awarded $10 million, and two other grantees in the state had $25 million in grants canceled.

Indiana said Monday it was pausing the grant program it was running with its $15 million in digital equity funding. Several states, including Maine, opted to subgrant out their awards and have been taking applications for their own grant programs.

“The Indiana Broadband Office has been notified by our federal partners to suspend the Digital Opportunity Grant program. Due to this, we are suspending the application period for the Digital Opportunity Grant until further notice,” the state said in an email to stakeholders.

Texas had already paused its digital equity grant program in March, citing “ongoing federal government realignment to meet the priorities of the new federal administration.”