CPUC set to decline AT&T's request to drop landline customers

AT&T Inc.'s proposal to stop offering landline service in places like rural Kern appears headed for rejection after an outpouring of public opposition and an absence of service providers volunteering to take up the phone company's obligations as a "carrier of last resort."

The California Public Utilities Commission issued a proposed decision Friday effectively requiring the Dallas-based telecommunications giant to keep providing conventional phone service, and maintaining related infrastructure, in remote areas such as Mojave and Pine Mountain Club, as well as in urban areas like Bakersfield. AT&T could retire landlines, the draft decision noted, but it would have to replace them with something else.

A final vote on AT&T's request is scheduled for the commission's June 20 meeting. It's likely a deeper discussion awaits, however, because Friday's proposed decision recommends the commission take up a new rule-making process to update its 30-year-old regulations on carriers of last resort, known as COLR.

The designation is part of a requirement in California that at least one phone company in every census-designated place must offer access to telephone service — via copper, fiber optics, cable, wireless or voice over internet protocol, called VoIP — to anyone who requests it. No other company in California carries that responsibility in more parts of the state than AT&T.

The company asked the CPUC in March 2023 for permission to set aside its COLR obligations, arguing that affected customers — the less than 5% of households in its California territory that still use copper-based landlines — have alternatives available to them that may include mobile phone service and cable-connected VoIP. AT&T said it should be allowed to focus and invest instead on newer technologies used by more people.

In an email Tuesday, a company spokesman expressed disappointment at the proposed decision "as we’d hoped the commission would allow us the opportunity to demonstrate why the number of options for voice service available to customers make the COLR obligation unnecessary."

"We remain committed to keeping our customers connected to voice service and will continue working with state leaders on policies that allow us to bring modern communications to Californians,” he wrote.

Oakland-based consumer advocacy organization The Utility Reform Network took a different view of the proposed decision in a news release Monday. Its telecommunications policy director, Regina Costa, called AT&T's proposal "cynical and diabolical" and said letting the company walk away from its COLR obligations would jeopardize public safety in areas threatened by wildfires, earthquakes, floods and power shutoffs. Because copper landlines carry their own electrical charge, they can operate even if an area's power goes out.

The CPUC reported receiving more than 5,000 comments from people across the state, an "overwhelming majority" of whom don't support AT&T's request. Some commenters focused on the unreliability of VoIP or mobile wireless service in their areas.

A spokeswoman for the commission said in a news release Friday the proposed decision drafted by Administrative Law Judge Thomas J. Glegola "underscores the critical importance of ensuring universal access to essential telecommunications services for all Californians."

Despite AT&T's assertion alternative technologies are available to fill the gap, the release said that if the company were to pull out as a COLR, it wouldn't meet two key requirements for withdrawal.

"Specifically," the release stated, "AT&T failed to demonstrate the availability of replacement providers willing and able to serve as COLR, nor did AT&T prove that alternative providers met the COLR definition."

AT&T contended it was not necessary for a new COLR to be designated because the commission may institute changes when market conditions undergo material change. But as Glegola noted, the company's proposed replacements of VoIP and mobile voice service providers don't meet California's definition as a carrier of last resort.

Glegola added that no rules prevent AT&T from retiring its copper-service facilities or from investing in fiber or other technologies to improve its network.

He also wrote that it may be time to reconsider California's rules on carriers of last resort.

"Given the age of its COLR rules, as well as changes in the marketplace," Glegola wrote, "it is appropriate for the commission to consider whether its COLR rules should be revised, and, if so, how the rules should be revised."