AT&T loses key ruling in bid to stop offering basic phone service in California

California can keep enforcing rules that require AT&T to offer basic phone service to new customers in its wireline territory, following a federal judge’s ruling last week.

AT&T sued California in May in a bid to end the state’s Carrier of Last Resort (COLR) rules that require it to offer telephone service to any potential customer in its territory. AT&T asked for a preliminary injunction that would prevent California from enforcing the COLR rules while the litigation continues.

To win a preliminary injunction, AT&T had to show it is likely to succeed on the merits of its claim that California rules are preempted by a Federal Communications Commission order. US District Judge Linda Lopez denied AT&T’s request for a preliminary injunction during a motion hearing on Thursday, according to a docket entry. The case is in US District Court for the Southern District of California.

AT&T wants to stop offering basic phone service to new customers and discontinue service for 184,000 residential customers and 15,000 business customers on June 1, 2027. AT&T said the injunction it requested would let it stop offering service to new customers immediately, and that it would preserve service for existing customers while litigation continues.

AT&T could appeal Lopez’s ruling to the 9th Circuit Court of Appeals and could appeal later if it loses the underlying case. But since it has not obtained the injunction it asked for, AT&T for now remains under California’s orders to keep offering phone service to potential customers while the case continues.

California suggests AT&T upgrade old lines to fiber

AT&T has said it has received relief from COLR obligations in 20 of the 21 states in its wireline service territory, all except California. AT&T alleges that “California requires AT&T to spend $1 billion each year to maintain a century-old telephone network that almost no one uses.”

AT&T wants to shut off the copper lines used for its Plain Old Telephone Service (POTS), but is not promising to replace those copper lines with fiber. In any area where AT&T determines it is not profitable enough to install modern phone lines, customers would have to rely on the cellular network for home phone service.