During a moment when affordability remains a top concern for voters, policymakers must be especially sensitive to the downstream costs of their regulatory choices. Regulatory requirements that increase the cost of building and maintaining networks also raise prices for consumers and slow network improvements. In California, the embattled requirement to maintain the state’s outdated copper networks is a costly example of how regulatory obligations can become a burden that raises costs and slows deployment of modern networks
As daily life continues to move online, reliable, high-speed internet has become a necessity. From work to healthcare to education, Americans depend on broadband to participate in the modern economy and remain connected. Rising consumer demand, combined with intense competition and government funding, has driven heavy investment across different technologies, with better coverage and quality of service than ever before.
Still, achieving high-quality, universal connectivity is a challenging goal, and policy plays an instrumental role in making it happen. One branch of policy is national. For example, with the 2021 passage of the Bipartisan Infrastructure Law, Congress created the Broadband Equity, Access, and Deployment (BEAD) program, allotting more than $42 billion over the next several years to expand broadband to underserved communities across the country. These funds supplement the massive spending by broadband companies such as AT&T, Verizon, Comcast, and Charter. According to estimates in PPI’s annual “Investment Heroes” report, these four companies alone have invested $325 billion in the United States over the past five years.
The second branch of policy is at the state level, where regulatory choices can make it easier or more costly to expand high-speed broadband. Consider California, for example, where a regulatory framework designed for a different era is complicating the expansion. By designating certain service providers as “carriers of last resort,” California requires them to provide basic telephone service to all customers within a designated service area.
These obligations, in turn, require the maintenance of copper networks, which represent a relic of the past that have not kept up with the standards of modern technology. In California, only 3% of the households served by AT&T still use traditional phone services.
In 2024, the California Public Utilities Commission (CPUC) dismissed AT&T’s application to be relieved of these obligations, making California the only one of 21 states where AT&T still operates copper networks not to grant relief. The decision has triggered a legal fight and federal action that could preempt the CPUC’s authority on the issue, both of which remain unresolved.
