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California regulators deny AT&T's bid to end status as carrier of last resort

The California Public Utilities Commission voted Thursday to reject AT&T's request to withdraw as a carrier of last resort, or COLR, but it also decided to revisit the rules of determination. Meanwhile, a new bill in the state Legislature would revise the requirements for any company to be designated the COLR.

The COLR is a cornerstone of utility regulation. It obligates a carrier to provide basic service to all customers within their territory no matter where they live. It can provide telephone service over any technology, such as copper, fiber, cable, voice over internet protocol (VoIP is a combination of copper and fiber), or wireless cellular. AT&T California has held that designation since 1996. It planted utility poles and strung copper telephone wire throughout the state.

In March 2023, the company applied to the CPUC to be released from the designation, adding that the cost of maintaining a copper network for less than 5% of their territory had become too costly.

"To satisfy its COLR obligation to provide basic telephone service, AT&T California still operates a legacy network composed of copper lines and antiquated circuit switches," the application said.

The move sparked a backlash from the public. Commissioner John Reynolds said Thursday that the CPUC received over 5,000 public comments and held eight public forums drawing more than 5,800 attendees.

Most of the outcry was triggered by concern about losing landlines and being forced to depend on cellular service, especially from people in remote regions. There are also fears of losing service in the case of fire or other emergencies.

"Copper uses electricity. But when the power goes out, the power is provided from the telephone company by very big generators," said Regina Costa with The Utility Reform Network, a nonprofit watchdog group that advocates for affordable power and phone service. "When an earthquake hits and the power's out for two or three days, you still have local phone service."

Tedi Vriheas, AT&T's vice president for external affairs, said no communication system is guaranteed to survive natural disaster, even copper. And the company is misunderstood. They have no intention of taking away landlines, she said.

The upgrades that the company has done involves swapping copper wires for fiber ones, using the same landlines and the same poles. People could still plug their phones into them. Customers could choose to use cellular or VoIP, but they don't have to.

But changes to the rules that designate a COLR may be coming soon. The CPUC also voted to consider revising the COLR rules "to adapt its regulations to evolving market conditions and technological advancements while continuing to meet the needs of Californians."

On Feb. 15, a bill proposing revisions, Assembly Bill 2797, was presented in the Legislature by Assemblymember Tina McKinnor, D-Inglewood. If passed, the law would create a way for AT&T to remain as COLR in rural regions, which the company estimates as being about 100,000 customers, while being released from COLR obligations everywhere else.

"Where they only have a copper line, we are not touching that," said Vriheas. "That is not part of this bill. We have carved out rural California for our footprint, because we heard that people were afraid, they only had a copper line, it was their only way to communicate. And if that is the case, nothing is going to happen there. That will be status quo. And then we will develop a plan with our rural partners on how we begin to transition those customers over to advanced services. But that will take a long time."

Vriheas said the bill will only affect areas where there's no population, according to the census, and people in cities and suburbs that have other options.

"It will impact those in urban areas, like in San Francisco, where I have nine competitive providers where I can get my landline phone from," she said.

According to Terry Schanz, chief of staff for McKinnor, the urban rules would stand even if both options were wireless carriers.

"The commission is absolutely right to propose looking at this in a very comprehensive, thoughtful way," said Costa. "But AT&T is trying to go through the side door at the Legislature to convince them to adopt a process where all AT&T would have to do is send a letter claiming that there are alternative providers, and no one would have the opportunity to verify that. The CPUC would have no opportunity to do anything other than accept the letter and put a stamp on it and stick it in a file."

Costa cautioned that the rules for carrier of last resort should not adopted based on one company.

"They are industrywide rules. And they should not be rewritten in a piecemeal way, by looking at a single application, not just AT&T. The rules should be revised by the commission instead," she said.

AT&T's request to be released from designation as COLR must also be approved by the Federal Communications Commission. AB 2797 goes before state Senate committees this summer before a vote in the Legislature on Aug. 31. 

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