AT&T is on a mission to build out its national fiber-to-the-home footprint and wants to forsake copper DSL, but it will have to wait on that endeavor in California. 

At a meeting last week, the California Public Utilities Commission (CPUC) voted to deny AT&T’s request to be released from its duties as the state’s “carrier of last resort” (COLR), and urged the company to upgrade copper facilities to fiber instead of trying to shut down the outdated parts of its network.

The agency said that because of AT&T’s status as the COLR, it must continue to provide basic telephone services, typically via landline, to anyone who requests it in its specified areas. 

“As the designated COLR, AT&T plays a pivotal role in providing reliable telephone service to communities across the state,” CPUC said in an announcement released last week. 

“Despite AT&T’s contention that providers of voice alternatives to landline service — such as VoIP or mobile wireless services — can fill the gap, the CPUC found AT&T did not meet the requirements for COLR withdrawal. Specifically, AT&T failed to demonstrate the availability of replacement providers willing and able to serve as COLR, nor did AT&T prove that alternative providers met the COLR definition."

Dallas-based telecom AT&T has long been trying to retire its expensive and lightly-used copper telephone wires (which power some of its landlines in rural areas) so it can allocate more funding to building fiber broadband connections.

AT&T CEO John Stankey wrote in a social media post in May that the company shouldn’t be expected to operate in areas where there is little business. 

“It’s time to do what capitalism is best suited to do,” Stankey wrote. “Deploy capital and resources to their highest and best use for customers, communities, and society at large.”

For its part, CPUC contends that AT&T is free to abandon copper DSL — it just needs to provide a low-cost, reliable connectivity option to California consumers. 

“AT&T’s public arguments paint the picture that the Commission’s COLR Rules require AT&T to retain outdated copper-based landline facilities that are expensive to maintain, or that AT&T needs Commission approval in order to be able to retire copper facilities and instead, invest in more modern technologies such as VoIP, wireless, and fiber,” CPUC wrote. “These arguments are not accurate.”

Still, AT&T is prohibited from revisiting the matter with the CPUC for at least one year — meaning it’s stuck with its COLR duties until at least next June.

“The law and facts of this case are such that AT&T’s Application must be dismissed with prejudice,” CPUC said. “The Commission’s COLR Rules require the presence of another COLR, either one already in place or one willing to replace AT&T. No other COLR serves AT&T’s service territory, and no potential COLR volunteered to replace AT&T.”

According the CPUC, it received more than 5,000 public comments from across eight  forums held about AT&T’s request to terminate its copper landlines.

CPUC said that its decision reflects its dedication to maintain service standards and address the residents who depend on telephone landline services.

“The COLR rules safeguard telephone service by ensuring Californians have access to at least one telephone company that offers reliable service, access to 911, customer protections, and affordable service through the state's Lifeline program,” CPUC president Alice Reynolds added. “We subsidize the COLRs through our high-cost fund programs to offset the cost of providing service in these remote areas.”

Despite its refusal, the committee did say it would open another inquiry to address COLR obligations, given changes in the marketplace.

The California Public Utilities Commission has unanimously approved the transfer of control of  various Time Warner Cable and Bright House California systems and telcos to Charter. That was the last remaining obstacle to closing the deal, which is now expected to close next week.

A CPUC Administrative Law Judge had recommended the conditional approval, but that was a recommendation and still needed to be voted.

“We are pleased to have now obtained all approvals," said Charter CEO Tom Rutledge. "We look forward to closing these transactions next week and to begin delivering the many benefits of these transactions to consumers.” 

The vote came at its public meeting in Sacramento Thursday (May 12) and followed public and legislator comment on the deal. The meeting room was standing room only.

Charter agreed to allow parties to various memoranda of understanding (MOUs), as well as the commission, to monitor them. Charter also agreed to accept the commission's jurisdiction over the deal, which it had challenged in part, which one commissioner signaled was important, but sought an edit to the order saying that any party to the proceeding, not just to the MOUs or commissioners' staffer, could petition for a notice of inquiry into enforcement of a condition. She withdrew the edit, but got a commitment form her fellow commissioenrs that the conditions could be monitored and enforced.

Commission President Michael Picker outlined the conditions. They include to increase board diversity, create a chief diversity officer, boost supplier diversity, and work to expand minority programming. New Charter will also upgrade cable systems and VoIP service, and provide low-income, low-price broadband.

New Charter will upgrade to 300 Mbps by 2019 and will allow all customers to buy their own modems and set-tops without added cost.  Picker cited Charter's commitment to adhere to the current net neutrality order no matter what the court does, but added he was confident the court would uphold it.

Just in case, though, Picker said New Charter will adhere to Open Internet for the next three years from the closing of the transaction, and clarified that language in the final order.

All the commissioners cited the broadband buildout promises as important value-addeds for their communities.

A couple dozen people spoke about the deal, with each getting one minute apiece. There were numerous groups and individuals speaking out in favor of the deal along with passionate, but far fewer, naysayers, most focusing on diversity.

Among those speaking for the deal was Pastor William Smart of the Southern Christian Leadership Conference of Southern California. He called the deal "the right thing at the right time," particularly for low-income residents.

Another supporter said the deal would mean more affordable access for more people.

Alice Kessler of Equility Califorain, an LGBT advocacy organization, said she supported the deal, saying Time Warner Cable has been very involved in the community and supportive of LGBT, and said she thought the deal would mean even more diversity.

Former Assembly member Steve Bradford also stood in support of the deal and said he did not take the decision lightly. He said he had worked with both, and said they have strong committments to workforce, contracting and procurement diversity.

A self-described customer of Time Warner Cable with 40 years of experience with the cable business and a California state legislator said the ability to bridge the digital divide is "all accommodated in this merger proposal." He said he was in full support.

Several asseumbly members, past and present, spoke out for the deal.

High speed access for low income families and senior citizens appeared to be a key driver of the support, or at least that was cited.

The CEO of Crossings TV, which serves the Asian community, was another fan. He said after extended conversations with Charter, he has the "highest confidence" that Charter willbe supportive of that.

The California Emerging Technology Fund said the deal would bring broadband to low-income communities. She said the decision was in the public interest and would help close the digital divide.

The president of the California NAACP said she loved the merger because it would provide diversity and more opportunities for minorities.

On the other side one speaker said Charter was in violation of FCC rules. He said any commissioner who votes yes is in violation of the law. "Please stop the Charter/Time Warner merger.

He was asked by one commissioner what rule was broken. He said the rule to "accept 100% African American-owned media." The reference was to a minority programming condition in the NBCU merger approval.

A second opponent cited the $10 billion suit filed by Byron Allen against Charter, which is over the %100 African American issue."

A disabled veteran complained that the low-income expansion did not inlude the disabled. He also cited the lawsuit and said that there are not black members of the Charter board.

Another opponent brought up the racial discrimination suit, and then another and another, repeating the several racial bias charges.

A representative of California Black Media said she was troubled by those comments, but still supported the deal, though she added that it had opposed Comcast-TWC. She said this deal was the right thing to do.

A representative of the National Diversity Coalition said she was impressed that there were a lot more supporters than opponents.