The Future of the Carrier of Last Resort Obligation

California has always treated communications as essential infrastructure – from the buildout of universal telephone service in the 20th century to today’s programs that expand the availability of broadband while supporting low-income access. Reliable communications are foundational to public safety, economic opportunity, civic participation, health, and education.

The Legislature and the California Public Utilities Commission (CPUC) have engaged in a long and important debate over the future of Carrier of Last Resort (COLR). As part of that ongoing discussion, the Public Advocates Office has submitted a Joint Proposal with AT&T for the CPUC’s consideration. The Joint Proposal is intended to complement the CPUC's staff proposal for COLR relinquishment.

We previously opposed AT&T’s original petition for COLR relief and the company-sponsored legislation, AB 470, noting that they risked abandonment of millions of Californians and increased public safety risks such as access to 911, if approved. The proper balance in modernizing COLR is a process that delivers benefits to Californians rather than exclusively to shareholders, and one that under no circumstances leaves anyone behind.

For decades, the COLR framework ensured that every Californian, regardless of income or geography, could obtain legacy communications service – known as telephony – and trust that when they dialed 911, the call would connect. That outcome did not come solely from the efforts of private industry but rather reflects the combined role of public oversight and private investment funded by customers – the same principle guiding this proposal.

Turning a Corner: A Joint COLR Proposal of the Public Advocates Office and AT&T

The Joint Proposal is intended to complement the CPUC’s staff proposal for COLR relinquishment. It is based on the principle that if a carrier wishes to receive accelerated relief from its COLR obligations, it must deploy additional fiber infrastructure. In essence, the Joint Proposal ties a carrier’s relief from its COLR obligation to the need for network buildout while also guaranteeing a key customer protection that the COLR continue to provide either voice or broadband service. The COLR must also commit to offering a low-income bill discount program, LifeLine, as part of the exit. Lastly, the Joint Proposal does not accommodate statewide COLR relinquishment; instead, it is carefully narrowed to areas where most residents currently have access to gigabit broadband (likely from cable) or have received fiber from an alternative provider. More work remains to be done to expand affordable broadband services in heavily rural areas, but as a starting point the proposal begins the modernization process.

In applying the Joint Proposal just to AT&T, the company would have to commit to deploying more than 1 million new fiber lines in California to relieve itself of COLR in the eligible areas. Eligibility for relief would require AT&T (and other COLRs) to build fiber in areas that are currently dominated by single cable providers offering gigabit service, which could increase competition and lower prices for many residents who are paying too much for broadband due to limited choices.

Rural Markets are Protected under the Joint Proposal

The Joint Proposal leaves rural markets in their current status quo, with COLR obligations remaining in place. The Public Advocates Office has recommended that the CPUC explore opportunities to invite new providers who can deliver fiber into rural markets as an alternative pathway to replace existing COLRs. However, in order to allow these possibilities, the CPUC should allow negotiation at the local level between existing COLRs seeking exit and local public or private entities. Those negotiated agreements can be submitted as an application for CPUC review and approval or rejection. It is likely that the CPUC would also need to review its public purpose programs such as the California High-Cost Fund that finances COLRs to see if different public investments will yield superior results for rural residents.

Why the Emphasis and Special Treatment of Fiber?

While broadband is the key method of communications for economic, health, education, and societal participation needs, it can be delivered over many transmission methods such as wireless, cable, and satellite. However, fiber carries unique benefits to Californians that cannot be replicated by any other infrastructure.

In particular, transitioning from copper to fiber delivers the largest benefit to Californians, including better service quality, scalable speeds, and lower prices. The Public Advocates Office estimates that households gaining access to a second gigabit-capable provider – often through new fiber deployment – could see monthly broadband bills decline by roughly $15 to $40, which could translate into more than $1 billion in collective annual statewide savings.

Fiber infrastructure also has exceptional longevity that is likely to extend past the entire 21st century given its ability to scale with advancements in hardware. Engineering analysis indicates that fiber can deliver gigabit and multi-gigabit access well into the future.

Modernization is not deregulation

Broadband is the main means of communication throughout California. Legacy copper networks that delivered communications in the past cannot handle 21st century needs. Facilitating the transition towards broadband across the state has been a long sought after goal of the Public Advocates Office.

The Joint Proposal will deliver an upgrade of networks and standards, and a new commitment to universal affordable access. The Joint Proposal offers a pathway toward that outcome, one that reflects collaboration, public accountability, and a shared recognition that communications remain essential infrastructure in modern California. Now that this round of comments has closed, the CPUC will decide how it wants to bring the COLR proceeding to a close. That will come in the form of a Proposed Decision and will contain the CPUC's plan to move forward on COLR.