Summary:

California’s housing laws are evolving to address not just rent and habitability, but digital access.  AB 1414 tackles a growing issue: landlords forcing tenants into internet service contracts tied to their leases.

Background

For years, landlords have partnered with internet service providers (ISPs) to offer bulk-billing arrangements—charging tenants for internet service whether they want it or not.  While these deals promise discounts, tenants often end up paying more and lose access to low-income subsidies or competitive plans.  Federal rules prohibit exclusive ISP contracts in multi-tenant buildings, but they don’t stop landlords from requiring tenants to pay for bundled internet services.  AB 1414 closes that gap at the state level.

What AB 1414 Does

Effective 1 January 2026, AB 1414 adds Civil Code §1942.8, creating new rights for tenants:

Key Provisions

✅ Tenant Opt-Out

• Landlords must allow tenants to opt out of paying for any subscription from a third-party ISP offered in connection with the tenancy (wired, cellular, or satellite). 

✅ Rent Deduction Remedy

• If a landlord violates this rule, the tenant may deduct the ISP charge from rent. 

✅ Anti-Retaliation Protections

• Landlords cannot retaliate against tenants for exercising opt-out rights, consistent with existing tenant protection laws. 

✅ Bulk Billing Still Allowed

• AB 1414 does not ban bulk billing; it simply ensures tenants can decline participation. 

✅ Applicability

• Applies to month-to-month or other periodic tenancies commencing, renewing, or continuing on or after 1 January 2026. 

Impact

• Consumer Choice: Tenants can select ISPs that fit their budget and qualify for subsidy programs.
• Market Competition: Breaks landlord-ISP exclusivity, fostering competitive pricing.
• Financial Risk for Landlords: Traditional bulk contracts assume universal participation; opting out creates cost exposure unless contracts are adapted. 

Implementation Guide for Landlords

1.       Review Lease Templates

o   Remove mandatory ISP clauses for tenancies starting after 1 January 2026.

2.       Update Billing Practices

o   Ensure opt-out options are clearly communicated.

3.       Plan for Revenue Shifts

o   Consider owner-operated internet models to maintain a predictable income.

4.       Train Staff

o   Educate property managers on compliance and anti-retaliation rules.

Bottom Line

AB 1414 is about fairness and flexibility.  It doesn’t ban bulk billing—it simply gives renters the right to say no.  For landlords, the Law signals a shift: adapt your internet strategy or risk stranded costs.