AT&T filed a lawsuit against California on Wednesday, challenging state rules that force the carrier to keep offering traditional phone service across its wireline territory. The company wants the Federal Communications Commission to block California from enforcing those rules, a move that would let AT&T stop serving roughly 199,000 remaining landline customers.

The Core Dispute: Carrier of Last Resort

At the center of the fight is California's Carrier of Last Resort (COLR) obligation, which requires AT&T to provide landline telephone service to any potential customer in its coverage area. The California Public Utilities Commission rejected AT&T's request to drop that obligation in June 2024. The company now says it has received relief from COLR rules in 20 of the 21 states where it operates wireline networks. California is the lone holdout.

AT&T argues the old copper network is a relic. "The copper wires that once served every home now serve just three percent of households in AT&T's California territory," the company said in its court filing. "Consumers are fleeing every day to modern broadband services that are more affordable, reliable and energy-efficient."

Why This Matters

The dispute directly affects tens of thousands of California residents who still rely on traditional landline phones. Many are in rural areas or are elderly customers who may lack reliable broadband alternatives. If AT&T wins, those customers could lose service or be forced to switch to voice-over-IP or mobile options. The case also sets a precedent for how states can regulate legacy telecom infrastructure as copper networks age and companies push to shut them down.

AT&T claims it spends $1 billion each year maintaining the century-old telephone network in California. The company argues that money could be better used to expand broadband and modernize infrastructure. Consumer advocates warn that ending landline obligations without guaranteed replacements could leave vulnerable populations without essential communications.

AT&T's Legal Strategy

The lawsuit, filed in US District Court for the Southern District of California, asks the court to declare that federal law preempts California's COLR rules. AT&T is also petitioning the FCC to issue a ruling that would override the state's authority on this matter. The telecom giant has already abandoned copper networks in most of its service region. California remains the final frontier for its decades-old phone lines.

The outcome could accelerate the nationwide shift away from traditional landlines, a transition that has been underway for years. As broadband becomes ubiquitous, regulators must balance the need for modern services against the risk of leaving behind those who still depend on older technology.