Tag Archives: CPUC

Retiring AT&T Copper in California

Regulatory fights between state and federal regulators sometimes get messy, and it’s been a while since we’ve seen anything as messy as AT&T’s attempt to retire and walk away from copper facilities in California.

AT&T asked the California Public Service Commission (CPUC) for the ability to start retiring copper telephone networks in March 2023. It wasn’t an unusual request since AT&T is in the process of retiring copper in every other state where it owns last-mile copper networks. The CPUC finally ruled on that petition in June 2024 and unanimously rejected AT&T’s request. The state said that AT&T couldn’t retire copper unless the company had a functional equivalent product available for every customer who loses a copper connection.

That’s something AT&T can’t promise. The only two possible replacements for copper are fiber or FWA broadband delivered using cellular spectrum. AT&T has an alternative for customers in most urban and suburban markets. The company has built a lot of fiber and announced in May 2026 that it was planning to invest $19 billion more on fiber construction in the state. Most urban customers should also be able to use FWA cellular broadband if they lose copper, with the caveat that too many customers on FWA in a neighborhood could overwhelm the cellular network.

AT&T’s big problem comes in rural areas, where there are large areas where AT&T doesn’t have enough cellular coverage to reach homes with cellular broadband. It’s not unusual in most rural counties for a cellular carrier to serve only half of the area in a county, or less. There have been reports all around the country about customers who have been stranded after losing copper with no affordable voice option. AT&T has argued at the FCC that they can walk away from copper as long as customers can buy voice from somebody else. It feels extreme to have to replace an AT&T telephone line, that range from $25 to $63 per month with Starlink satellite broadband priced at $130 per month.

In May of this year, AT&T tried again. The company sued California and asked the federal courts to allow it to ignore the CPUC ruling. At the same time, AT&T asked the FCC to allow the company to walk away from carrier of last resort obligations (COLR) in California. The COLR request is a slightly different question than asking to be able to tear down copper. COLR are rules that require AT&T to still connect copper to new customers, even if that means building new copper facilities.

AT&T also filed a separate petition with the FCC asking for permission to discontinue 60% of its wire centers in California, or about 360 wire centers. AT&T argued that these wire centers were not compliant with the FCC’s rules requiring AT&T to support Phone-Advanced, which is a digital home phone service that runs on AT&T’s cellular network and broadband internet instead of traditional copper landline wires. Phone-Advanced lets customers keep their home number and connect up to six devices—including standard phones, fax machines, and medical monitors.

This is where it starts to become a messy jurisdictional battle. As was expected, the CPUC and California Attorney General Rob Bonta quickly challenged and asked the courts to dismiss AT&T’s federal lawsuit, while also asking the FCC to override rulings from the CPUC. In June, the FCC approved AT&T’s petition to close 360 wire centers and to cut copper to roughly 184,000 residential and 15,000 business locations across the state, but it seems like that should be ineffective while the State is saying the opposite and the issues are in court.

It’s getting hard to understand who has the final say about retiring copper in California, and it’s starting to feel probable that there might be conflicting rulings between the CPUC and the FCC. This doesn’t seem like something that is going to easily resolve, which could mean that copper will stay alive in California longer than anywhere else.

Promises Made, Promises Broken

I noticed that the Charter/Cox merger has been approved by the FCC, the DOJ, and the Public Service Commission of New York. The final hurdle is the California Public Service Commission, where Charter is hoping to get a decision by August from the CPUC. In exchange for an agreement for the merger, Charter has promised to spend at least $275 million on network upgrades to achieve symmetrical gigabit speeds across its California footprint within three years. Charter also promises to offer a statewide low-income price plan for five years that includes a $20 plan for 100/20 Mbps speeds, and that would be free for Lifeline Pilot participants. Finally, Charter promises to provide $23 million in support to the nonprofit CETF (California Emerging Technology Fund) for digital literacy and device subsidies, plus $7 million to regional broadband groups.

I had a chuckle when I saw the promises being made by Charter. It reminded me of many times that carriers didn’t follow through on big promises made to regulators. One of the most memorable broken promises came from Verizon in Pennsylvania – a story that has been well documented in a book by Bruce Kushnick, The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net. In 1993, the State agreed to deregulate Verizon and provide big tax breaks as long as Verizon would deliver 45 Mbps broadband service to the entire state by 2015. By the early 2000s, Verizon reneged on the offer and reduced the promised speeds to 1.5 Mbps. Verizon eventually built FiOS fiber in selected urban and suburban markets and ignored the rest of the state. There were some rural Verizon customers who never even got the slow DSL.

In 1999, the two Baby Bell companies SBC and Ameritech, asked to merge. SBC promised regulators that the merger would spark a new, nationally competitive telecommunications carrier and committed to expand beyond its thirteen-state home region. Within a year of the deal closing, the FCC opened an investigation against SBC for failing to meet its competitive entry timelines and because of growing volumes of consumer complaints about declining residential service quality.

When AT&T asked in 2015 to acquire DirecTV for $48.5 billion, the company promised federal regulators to build out more than 12 million high-speed fiber connections. The company quickly fell short of that promise, and many believed that the company was faking fiber passings by counting apartment complexes that were near to its existing fiber network. AT&T eventually decided that building fiber was its best business plan, but it had totally blown off the 2015 promise.

When Charter asked to merge with Time Warner Cable in 2016, the company promised regulators that it would expand its network to unserved rural areas, that it would hold down prices, and would not implement price caps. By 2020, Charter petitioned the FCC to get off the hook for these promises and called them “unduly burdensome”

In 2020, when T-Mobile wanted to buy Sprint for $26 billion, the company promised it would rapidly expand rural 5G coverage. The company also promised to freeze post-paid rate plans for three years. Soon after the merger, the company said the agreement was no longer feasible.

I could fill a few pages with similar stories. Big carriers make whatever promises are needed to get approval for mergers or deregulation, and then typically proceed almost immediately to find ways to get out of what they promised. It’s hard to predict if California will approve the Charter/Cox merger. But I think California fully understands that promises made related to mergers are rarely promises fully kept.

California Competition Study

The Public Advocates Office, which is part of the California Public Service Commission, undertook a a deep analysis of broadband pricing in the state, correlated with the level of competition. The study was conducted from August through October of 2025.

The study looked at four large markets in the state: San Mateo, Oakland, Los Angeles, and San Diego. By choosing these markets, the study encompasses the four largest ISPs in the state – AT&T, Comcast, Charter, and Cox. The study gathered information on available broadband plans by location, advertised speed tiers, and promotional prices. The study also overlaid household incomes from the Census across the data it gathered to explore if household income played a role in prices offered by the big ISPs. The markets are interesting because they not only vary by ISP, but each market has some neighborhoods where the only gigabit provider is the cable company, and other neighborhoods where there is also one or more fiber competitor.

The overall conclusion of the study won’t surprise anybody who follows the big ISPs – broadband prices vary by the level of competition. In aggregate, the study showed that the price for broadband in competitive neighborhoods across the four markets was around $51 per month, while prices in non-competitive markets were $15 to $40 higher per month for comparable services.

The study resulted in three major conclusions:

Gigabit Fiber Drives Lower Broadband Prices. The study demonstrated that price competition only kicked in for neighborhoods where there are multiple ISPs offering gigabit broadband. That means a cable company and at least one fiber provider. The study showed that when there is competition for gigabit broadband, the competition extends downward to slower speeds offered by the big ISPs.

The study demonstrates something that is probably obvious, in that pricing is trimmed even further when there are more than two gigabit providers in a neighborhood.

Sub-Gigabit Providers Do Not Reliably Constrain Price. This is an interesting finding. It says that when the only competition to a cable company is an FWA cellular provider or a fixed wireless ISP, the cable company does not engage in significant price competition to keep customers. The study showed that, in fact, some of the neighborhoods with this kind of competition see the highest prices from the big ISPs.

This doesn’t mean that cable companies never compete hard against 100 Mbps providers, but this finding makes a lot of sense. Customers are attracted to the low prices of the FWA providers, and both T-Mobile and Verizon have price options as low as $35 per month. Cable companies, at least in these four large markets, are not willing to drop prices to compete with those prices.

Income is Not a Primary Driver of Prices. This is a bit of a surprise, because there were previous studies that suggested that pricing was lower in neighborhoods with the highest household incomes. That may have been true five years ago, but the data now suggests that prices offered by the big ISPs are mostly related to the level of competition.

The study made some other interesting observations. One observation is that in competitive neighborhoods, promotional prices can vary by household, and somebody might be paying a significantly higher or lower price than their immediate neighbors.

The study is worth reading for anybody interested in how big ISPs compete. The study has a lot of detail about how big ISPs stratify addresses and pricing offers based on the presence of other gigabit providers, while not caring much about ISPs that compete with slower products.

What About Competition?

In comments made to the FCC in the recent docket looking at customer service practices, the California Public Utility Commission filed comments that said that big ISPs don’t focus on customer service because they don’t have to. The CPUC said that only 26% of California residents have a choice between two fast ISPs.

The federal government has been concentrating on making sure that homes have at least one fast option for broadband, and that’s an obviously good goal at a time when Internet access is considered by most households to be a necessity.

But the numbers cited by the CPUC are not unusual. Across the country there are still a lot of places where homes and businesses have only one fast ISP option.

There are real consequences for any neighborhood that has only one fast ISP. Such neighborhoods have no competitive options, and the one fast ISP is effectively a broadband monopoly in that community. There are clearly documented consequences of being served by an ISP that has a virtual monopoly.

The best way to think about that is to look instead at what happens when a community gets real competition between two or more ISPs that offer gigabit speeds.

  • Lower Prices. The conventional wisdom is that competition lowers prices by at least 15%. In today’s world of competing for customers with lower prices and specials, a lot of households are seeing much bigger discounts by playing two ISPs off against each other. As someone who has been in the industry for a long time, this reminds of the marketing battles in the 1990s by long distance companies. Customers learned they could get cheaper rates by calling and saying they got a better rate from another carrier.
  • Improved Customer Service. When a new competitor moves into an area that was previously a monopoly, it’s almost inevitable that the original monopoly ISP will step up its game. Improved customer service means the ISP will respond to customer outages and troubles more quickly. They may even show up on time for home visit appointments.
  • Technology Upgrades. ISPs operating in a competitive market tend to upgrade technology a lot sooner than in non-competitive markets. If nothing else, the original monopoly provider will usually tweak the network to work better. For example, every cable company can improve performance by tightening up frequency leaks in the network. When faced with competition, crews seem to suddenly find the time to do long-ignored maintenance.

A lot of cities were disappointed when they learned that BEAD funds would be deployed almost entirely in rural areas and wouldn’t benefit cities. Early press releases made it sound like BEAD could be used to help neighborhoods served by old incumbent networks, but it quickly became clear that BEAD was not going to be allowed for that purpose.

Most cities are still acutely aware that technology differences in their city that are creating competition haves and have-nots. The consequences for neighborhoods with only a single legacy monopoly provider can be dire in a city where everybody else is served by both a cable company and a fiber overbuilder.

A lot of the competition gap will be fixed as ISPs continue to build fiber networks. AT&T and other largest ISPs have announced plans to build over 60 million fiber passings by the end of 2030. Not all of that is new passings since millions of fiber passings will compete with another fiber provider, but this construction will improve competition in many communities. Unfortunately, we’ll have to wait until 2030 to see who gets left behind.

Carrier of Last Resort is Still a Thing

I always find it interesting when old regulations bubble up into the news. As reported by Jon Brodkin in Ars Technica, an administrative law judge at the California Public Utilities Commission (CPUC) rejected a petition by AT&T to walk away from its carrier of last resort obligations for voice service.

For those unfamiliar with carrier of last resort, this was a regulatory principle that harkens back to 14th-century English law, where businesses were granted the ability to operate as long as they agreed to serve everybody. In this country, carrier of last resort was embedded into the rules when states started giving monopoly service areas to telephone companies. Carrier of last resort rules required telephone companies to build to reach every home that could be reasonably reached. While the cost to reach remote customers might be high, the quid pro quo is that carriers were allowed to achieve a guaranteed rate of return on investments they made.

In the petition in California, AT&T requested to be relieved of carrier of last resort obligations, which would give it the ability to stop providing telephone service in rural areas. The AT&T petition was met with a lot of protests from rural residents asking the CPUC to not let AT&T kill their telephone service.

The Administrative law judge rejected the AT&T petition. He ruled that he was unable to ignore the existing California rules that require carrier of last resort. He also ruled against the AT&T claim that California rules would require AT&T to keep copper. He noted that there is nothing in the California rules that would stop AT&T from decommissioning copper wires.

The ruling went on to point out that there are many examples where AT&T is replacing copper with fiber technology. The ruling notes that there is nothing in the California rules that would stop AT&T from replacing copper with fiber, wireless, or other technologies. The bottom line is that the ruling says that A&T is allowed to kill copper networks, but that carrier of last resort obligations require the company to provide an alternative technology that can bring voice service to households.

There are a lot of stories in the last few years of AT&T disconnecting working rural telephone lines without providing a technical alternative. The company has done this quietly in many parts of the country, and I’ve run across rural AT&T areas where there is no longer any working DSL.

This ruling can be made in California because the CPUC never dropped the carrier of last resort rules. In many states AT&T and other large telcos were able to eliminate these rules as part of the process of deregulating telephone rates. In most states, the decision to deregulate telephone rates involved telcos being able to walk away from a lot of regulatory rules for a promise to freeze residential telephone rates.

Unfortunately, one area of regulation that went out the door in this process was the obligation of  telcos to meet performance standards and to perform needed maintenance. Big telcos reacted to deregulation by cutting rural technicians and rural maintenance budgets to the point where maintenance meant only doing band-aids repair for customers who yelled the loudest.

To some degree, this ruling is too little, too late. It’s harder each year to keep copper networks limping along, and AT&T can probably still meet carrier of last resort obligations by keeping telephones just barely working. It’s likely that most of the areas covered by this ruling will be eligible for BEAD grants, so the issue probably will quietly die within five years as other carriers displace AT&T and other telcos who want to walk away from rural markets.

For me, this ruling is somewhat nostalgic. There were a lot of states fighting this battle a decade or two ago, and now only a few states are trying to keep the phones working in rural areas. We have to be nearing a time when there will be no more talk about carrier of last resort. Grant programs like BEAD require a grant winner to build to every home in a grant area – but they don’t require carrier of last resort obligations to build to new homes after the grant construction is completed. We’ll probably never stop hearing about rural residents who are quoted astronomical sums to bring a landline or broadband connection to their home.