CPUC Sues FCC to Void Federal Copper Retirement Preemption Order

The CPUC's lawsuit creates a direct legal test of whether the FCC's Network Modernization Order can preempt state-level carrier-of-last-resort obligations — the central friction point in AT&T's nationwide copper retirement strategy. If the Ninth Circuit sides with California, telecom operators face continued state-by-state regulatory fragmentation that could delay retirement timelines and increase costs. The case also undercuts AT&T's parallel lawsuit against California, which relies on the very FCC order the CPUC is now challenging. Watch whether the FCC acts on AT&T's discontinuance applications for its 360 California wire centers before the court rules — that timing could force an earlier showdown.

The CPUC's lawsuit is the latest move in an escalating multi-front legal battle over California's copper networks. In May 2026, AT&T sued California in the US District Court for the Southern District of California, seeking to preempt the state's Carrier of Last Resort (COLR) rules that require the company to offer landline service to all potential customers. AT&T claims it spends $1 billion annually maintaining copper infrastructure that serves just 3% of households in its California territory, and has obtained COLR relief in 20 of the 21 states in its wireline footprint — California being the lone exception (per Ars Technica, May 2026).

The regulatory fight intensified in June 2026, when the CPUC filed detailed comments with the FCC opposing AT&T's applications to discontinue legacy voice service across 360 wire centers. According to Ars Technica (June 2026), California regulators argued that AT&T's proposed wireless replacement, AT&T Phone-Advanced, does not provide adequate indoor coverage and could be "considerably more costly" than existing basic service, particularly in rural and low-income areas. The CPUC also raised concerns about 911 reliability, compatibility with assistive technologies, and the program's impact on the California Lifeline discount program for low-income households.

The FCC's Network Modernization Order, adopted March 26, 2026, under Chairman Brendan Carr, grants carriers blanket Section 214 authority to grandfather legacy voice services and asserts that state requirements conflicting with the discontinuance framework are "subject to preemption" (per the Federal Register, April 20, 2026). AT&T's discontinuance applications propose to stop serving approximately 184,000 residential and 15,000 business customers across the 360 wire centers by June 1, 2027 (per the CPUC website). The CPUC rejected AT&T's initial request to eliminate its COLR obligations in June 2024, setting the stage for the current federal-level conflicts.