I still love to listen to the Mamas and Papas singing California Dreamin' as much as the next person. But I confess I do tire of many of California's policies which, if not by intent, then at least by design, are obstacles to progress.
A case of obstruction in point: The lengths California appears willing to go to impede modernization of the nation's telecommunications networks.
With the build-out of data centers and rapid advent and use of AI platforms, the incredible growth in 5G (and coming 6G) wireless services, deployment of drones, and myriad other technological developments, there shouldn't be much debate that it is in the nation's interest to facilitate the ongoing modernization of its telecommunications networks. And, in many quarters of the country, there is widespread agreement on this point.
But – shock, shock! – then there is California. The state is willing to go to extraordinary lengths to thwart the FCC's policies which are intended to allow telecom providers to invest in modernizing their networks by upgrading to digital (IP) technologies while, at the same time, protecting consumers during a transition period away from legacy copper lines.
For much longer than should be necessary, AT&T has been battling California's attempt to thwart its network modernization efforts as the state attempts to use its outdated "Carrier of Last Resort" (COLR) regulations to prevent AT&T from discontinuing POTS ("plain old telephone") copper line-based service. It is doing this in places where consumers have comparable IP-based alternatives available. By requiring that legacy copper-based POTS services continue to be maintained in place, this necessarily means that AT&T has less funds available for upgrading and modernizing its network to offer IP-based services over advanced broadband networks.
Here at FSF, we have vigorously supported the FCC's various efforts to revise its policies to facilitate network modernization, including the agency's Accelerating Network Modernization decisions. And we recently filed commentsand reply comments in the FCC's current proceeding considering AT&T's request for the agency to preempt California's COLR regulations.
In short, California is running a shell game in which, in theory, it purports to allow carriers like AT&T to discontinue copper-based legacy services if comparable basic services are available to consumers over any technology. But even though California claims its policy is "technology neutral," as FSF explained in its reply comments supporting AT&T's preemption request, the reality is much different.
[The California PUC] wrongly clings to the fiction that 'California does not require carriers to maintain copper facilities,' a claim belied in practice. The CPUC's convoluted, multilayered definition of 'basic service' effectively requires a copper line network; no other carrier is willing to step into AT&T's COLR shoes, and understandably so; ergo AT&T cannot retire its copper line network even with FCC approval to do so.
The FCC recognized in its Network Modernization Order that it's time for practical realities to prevail over fictions that impede IP-based network modernization efforts able to benefit all of California's consumers. As Free State Foundation scholars have long suggested, in today's multi-platform competitive communications marketplace, the whole notion of a 'carrier of last resort' is a fiction that needs to be buried.
AT&T has been forced to file a lawsuit in federal court seeking to prevent California, contrary to the FCC's network modernization policies, from requiring AT&T to continue offering copper-based POTS. As AT&T explains in its latest pleading, California continues its intransigence under the color of its COLR regime.
Congress gave the FCC the exclusive authority to authorize these service changes. So under the Supremacy Clause, California cannot undo or add to AT&T’s federal approvals. California disclaims doing so. It insists that its rules are technology neutral' and that AT&T is free to stop offering POTS to new customers (what the FCC calls 'grandfathering') and ultimately to discontinue POTS. As a result, California says, there is no conflicting state regulation for federal law to preempt and accordingly nothing for this Court to decide.
But California’s insistence that AT&T may wind down POTS is paired with a series of punishing caveats. AT&T may retire POTS so long as it gets several state permissions first—permissions that California insists are merely ministerial but are anything but. AT&T may retire POTS so long as it offers an alternative under California standards that are more onerous than the federal standards. AT&T may retire POTS so long as it substitutes a different service with features that the CPUC concedes are obsolete, and that AT&T’s modern services do not offer. AT&T may retire POTS so long as it tariffs the replacement, which federal law forbids. Scratch the surface, and none of these conditions is truly neutral. Together, they are a mandate to keep providing a service that the FCC has authorized AT&T to stop.
Let's hope AT&T prevails. Not just for the sake of AT&T. Not just for the sake of California's consumers who will benefit from modernization of AT&T's telecommunications facilities in California by virtue of access to advanced services. But also, more broadly, for the sake of preserving the FCC's network modernization policies, including the exercise of its preemption authority, throughout the nation.
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