WASHINGTON (September 23, 2026) — California’s requirement that AT&T keep its aging copper telephone network running is tying up $1 billion a year that could instead connect hundreds of thousands of homes and businesses to high-speed internet, according to a new report from the Progressive Policy Institute (PPI).
Authored by Andrew Fung, Senior Economic & Technology Policy Analyst at PPI, “What California Is Giving Up to Keep Copper Online” examines the state’s “carrier of last resort” rules, which require designated providers to offer basic telephone service to every customer in their service area and, in practice, to maintain legacy copper lines. Only 3% of households served by AT&T in California still use traditional phone service. Yet in 2024, the California Public Utilities Commission (CPUC) dismissed AT&T’s request for relief, making California the only one of 21 states where AT&T still operates copper networks not to grant it. The decision has triggered a legal fight and federal action that could preempt the CPUC’s authority, both of which remain unresolved.
AT&T reported in a May 2026 federal complaint that it spends approximately $1 billion a year operating and maintaining its copper network in California, more than half of the $1.86 billion the state received in total from the federal Broadband Equity, Access and Deployment (BEAD) program. Those costs are climbing. Surging copper prices have fueled a wave of theft, with AT&T reporting more than 4,300 incidents and losses topping $57 million in 2025, and the company estimates that retiring the network would save about 300 million kilowatt-hours of electricity a year.
“California’s rules are forcing more than a billion dollars a year into a phone network used by 3% of households,” said Fung. “That money could instead be connecting hundreds of thousands of Californians to modern broadband. At a time when household budgets are already stretched thin, policymakers should modernize these rules and let investment flow to the networks Californians rely on to work, learn, and connect with others in the 21st century.”
To measure what that spending could buy instead, PPI matched project and location data from California’s BEAD Final Proposal, covering roughly 338,000 locations, to calculate an average all-in cost per location for each technology. The analysis finds:
The report updates PPI’s 2023 analysis of the opportunity cost of maintaining copper networks in California. Fung concludes that regardless of how the legal battles are resolved, costly regulatory requirements are undercutting efforts to connect more Californians to modern, reliable technology, and that freeing up resources now spent on a network few residents use would let providers accelerate buildout where it is needed most.
Read and download the report here:
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us at @ppi.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
