AT&T must keep offering basic phone service in California for now

AT&T failed to win an early court order that would have let it stop taking new basic phone service customers in its California wireline territory. U.S. District Judge Linda Lopez denied the company’s request for a preliminary injunction last week, leaving California’s carrier-of-last-resort requirements in force while the case continues.

The ruling keeps pressure on AT&T’s plan to retire legacy copper phone service in the state, a fight that matters beyond landlines because it tests how far telecom operators can push network modernization when state service obligations remain in place. AT&T wants to discontinue copper-based service for 184,000 residential customers and 15,000 business customers on June 1, 2027, and had asked the court to let it immediately stop offering service to new customers while preserving existing service during litigation.

AT&T sued California in May, arguing that state rules conflict with a Federal Communications Commission order that allowed carriers to grandfather copper-based Plain Old Telephone Service. To obtain a preliminary injunction, AT&T had to show that it was likely to win on the merits of its federal preemption claim. Lopez denied the request during a hearing Thursday, according to the case docket in the U.S. District Court for the Southern District of California.

AT&T can ask the 9th U.S. Circuit Court of Appeals to review the denial and can continue litigating the underlying case. For now, the company remains subject to California rules requiring it to offer basic phone service to potential customers in its service territory.

California says the rules do not require copper

The dispute centers on California’s Carrier of Last Resort, or COLR, regime. AT&T says it has obtained relief from comparable obligations in 20 of the 21 states where it has wireline operations, with California the exception. The company claims California forces it to spend $1 billion a year maintaining what it describes as a century-old telephone network with little remaining use.

California Attorney General Rob Bonta and the California Public Utilities Commission told the court that AT&T is mischaracterizing the state’s position. They argued that the FCC order addresses copper-wire service, while California’s rules require basic phone service and do not force AT&T to keep serving new customers over copper lines.

The state said AT&T can meet its obligations with a modern equivalent, including fiber, and noted that AT&T already provides basic service over fiber in some places. California characterized AT&T’s lawsuit as an effort to escape the carrier-of-last-resort obligation altogether rather than a narrower fight over copper retirement.

AT&T told the court that federal law preempts any California rules that block the company from carrying out the FCC-authorized grandfathering of POTS. It also argued that being kept under the state requirements would cause irreparable harm to its business interests and constitutional rights.

Wireless replacement remains contested

AT&T has pointed to alternatives including mobile wireless and AT&T Phone-Advanced, a service using AT&T’s wireless network while allowing customers to keep analog phones. California said its rules are technology-neutral and can be satisfied through wired, wireless or VoIP service, but argued that AT&T has not formally asked to replace POTS with AT&T Phone-Advanced under the state process.

The state also said AT&T has not committed that the wireless service would satisfy California’s basic service requirements, including flat-rate unlimited voice options, Lifeline discounts for eligible low-income customers, and relay service for deaf and hard-of-hearing users.

AT&T is also seeking help from the FCC. The company has asked the agency for an order preempting California’s COLR mandates and related requirements, including tariffing and Lifeline participation rules. It separately sought FCC permission to discontinue copper-based service to the 184,000 residential and 15,000 business customers in 2027. Those discontinuance petitions were granted automatically after a comment period, but the FCC has not acted on AT&T’s broader request to override California rules.

The Utility Reform Network, a California advocacy group, told the FCC that AT&T Phone-Advanced is a poor substitute for legacy infrastructure in a state with mountains, valleys, forests and severe weather risks. The group said wildfire and earthquake-related power outages can last days or weeks, while the service includes a 24-hour backup battery.

If the FCC grants AT&T’s preemption petition, California could still challenge that order in court. Until then, the federal court ruling leaves AT&T with the same near-term obligation it sought to pause: offering basic phone service to new customers across its California wireline territory.

This story draws on original reporting from Ars Technica.