AT&T filed a lawsuit against the California Public Utilities Commission and the state attorney general on Wednesday May 20, 2026, seeking a court order that would free the company from its obligation to offer traditional copper wire telephone service to new customers in the state.
At the same time, the company filed a petition with the Federal Communications Commission asking the agency to declare that California’s existing rules requiring it to maintain the old network are preempted by federal standards.
The numbers AT&T cited in the lawsuit are the core of its argument. The copper network it is required to maintain costs approximately $1 billion per year. The network currently serves just 3 percent of households in AT&T’s California territory.
The company is spending a billion dollars annually to keep operational a telephone system that the overwhelming majority of California households no longer use.
“California requires the U.S. wireless carrier to spend $1 billion annually to maintain a century-old telephone network that few use,” Reuters reported in its account of the filing.
AT&T says it has received regulatory relief from this obligation in 20 of the 21 states where it operates traditional copper networks. California is the only state that has refused to grant it.
What Is The Carrier Of Last Resort Obligation?
The legal concept at the heart of this dispute is the Carrier of Last Resort obligation, a regulatory requirement that dates to the era when telephone service was considered a public utility in a way that obligated the provider to offer it universally.
Under the CPUC’s current rules, AT&T must provide basic telephone service to any potential customer in its California service territory who requests it, regardless of what other options are available in that area and regardless of what the economics of providing that service look like.
The obligation made abundant sense when telephone service was the primary means of long-distance communication for American households and when no competitive alternatives existed.
A household in rural California in 1980 that wanted a telephone had one realistic option: the local telephone company.
Requiring that company to serve every potential customer, rather than cherry-picking the most profitable ones, was a reasonable condition for the license to operate the infrastructure.
The current telecommunications landscape looks fundamentally different. Wireless service is available to the vast majority of California households. Fiber optic internet, which can carry Voice over Internet Protocol phone calls alongside high-speed data, is expanding.
The CPUC’s obligation requires AT&T to maintain copper infrastructure for a use case that the market has largely moved past, at a cost of $1 billion annually, because the regulatory framework has not been updated to reflect the changed conditions.
The CPUC rejected AT&T’s formal request to be relieved of the Carrier of Last Resort obligation in June 2024. The Wednesday lawsuit is AT&T’s escalation of that dispute from a regulatory proceeding to a federal court.
The $1 Billion, The Copper Thieves And The Missing Parts
The practical problems AT&T describes in its lawsuit paint a picture of an infrastructure in genuine decline.
The company has suffered approximately 2,000 outages from copper thefts in California alone in 2026.
Copper wire has value as scrap metal, and the theft of copper from telephone infrastructure, cutting sections of cable from poles and underground runs to sell by weight, has been a persistent and escalating problem wherever aging copper networks remain in the ground.
Each theft creates an outage. Each outage requires repair. The parts needed for repairs are becoming increasingly difficult to find as the manufacturing of copper telephone equipment has wound down globally.
The companies that built the hardware for century-old telephone networks are either no longer in business or no longer producing the specific components that AT&T’s California infrastructure requires.
Maintaining a 2000s-era, let alone a 1990s-era or earlier copper telephone network in 2026 means sourcing parts that were not designed to still be in use.
The $1 billion annual maintenance cost reflects all of that, the theft repairs, the parts sourcing, the engineering time, the pole maintenance, the underground infrastructure management and the customer service costs associated with a network that has high failure rates because both the infrastructure and the parts keeping it operational are old.
AT&T argues that the same money, redirected, could accelerate its $19 billion California investment to bring fiber to more than 4 million additional households and businesses by 2030.
The environmental arithmetic also works in fiber’s favor, the company says switching off the copper network would save approximately 300 million kilowatt-hours of electricity annually by 2030, equivalent to eliminating the emissions from 17 million gallons of gasoline.
The Customers Who Still Depend On Copper
The case for AT&T’s position is straightforward and supported by the numbers. The case against it is also real and involves real people.
Nearly 200,000 AT&T customers in California still use the company’s copper infrastructure, for landline phone service, for dial-up internet connections or for DSL broadband.
That number is a small percentage of the total but it is not zero, and the people in it have specific characteristics that make their continued access to reliable telephone service important in ways that pure market economics do not capture.
Rural California is the most significant concern. AT&T Fiber remains unavailable to hundreds of thousands of Californians outside major metropolitan and suburban areas.
A household in a rural part of the Sierra Nevada or in areas of Northern California where fiber has not been deployed has limited alternatives to the copper infrastructure that AT&T wants to shut down.
Wireless service is technically available in many rural areas but it is not universally reliable, it does not work during power outages the way copper landlines historically have, and it does not serve the same devices.
The elderly and people with disabilities represent another category of users whose reliance on copper infrastructure goes beyond the simple phone call.
Medical alert systems, the personal emergency response devices that allow a person to call for help if they fall or have a medical emergency, often connect through traditional phone lines.
Some medical equipment relies on analog telephone connections. Hearing loops and TTY devices used by people who are deaf or hard of hearing can have compatibility issues with VoIP alternatives.
Public Knowledge, a nonprofit public interest organization, had warned the FCC about precisely these concerns when similar federal rule changes were being discussed.
The UK’s BT faced the same issues when it tried to complete its own copper network shutdown and was forced to delay after the government implemented protections for vulnerable users, particularly elderly customers using TeleCare devices.
AT&T’s senior executive Susan Johnson acknowledged the concern directly when speaking to the industry publication Light Reading.
“We want to make sure we’re handling this in a way that is not leaving customers stranded,” Johnson said. The lawsuit does not, however, commit to a specific protection framework for the customers who cannot easily transition to alternatives.
The State Against The Rest Of The Country
California’s position as the lone holdout among the 21 states where AT&T operates copper networks is both the company’s strongest argument and the CPUC’s most significant embarrassment.
If 20 states have found a way to grant regulatory relief from the Carrier of Last Resort obligation while protecting vulnerable users, California’s continued insistence on the obligation is difficult to justify purely on policy grounds.
The CPUC’s June 2024 rejection of AT&T’s regulatory relief application suggests the agency had specific concerns about the company’s plans for the transition, possibly related to the rural and vulnerable user questions, that AT&T did not adequately address in that proceeding.
The Wednesday lawsuit and the simultaneous FCC petition represent AT&T’s decision that it has exhausted the state regulatory process and needs to take the dispute to federal court and federal regulators.
The FCC petition is significant because it invokes federal preemption, the principle that federal law supersedes state law in areas where Congress has granted the federal government authority.
If the FCC declares California’s Carrier of Last Resort requirements preempted by federal telecommunications standards, the CPUC’s authority to maintain the requirement disappears regardless of what the state agency believes about the policy merits.
The copper network that reached nearly every home in California when it was built is now reaching 3 percent of AT&T’s territory customers.
The question the lawsuit asks federal courts to answer is whether California can continue to require AT&T to maintain it.
