AT&T's copper retirement goals are 'realistic' – analystAT&T's copper retirement goals are 'realistic' – analyst

AT&T's framework to retire the bulk of its copper network faces static from some groups and the state of California. But the operator's development of an alternative POTS (plain old telephone service), and an increasingly favorable regulatory environment bode well for its plan, says a top policy analyst.

"Considering changing circumstances, we believe [AT&T's] copper retirement goals are realistic," New Street Research analyst Blair Levin explained in a recent research note (login required). "California remains an issue (as do some non-T states for other carriers), but overall, we expect at both the federal and state level, T and other ILECs [incumbent local exchange carriers] will have an increasingly easy time retiring their copper networks."

That assessment arrived soon after AT&T detailed a plan to shut down copper-based services across most of its US footprint (save for California) by the end of 2029.

To help fuel the transition, the operator has developed AT&T Phone-Advanced, a product that can run on AT&T's fiber or wireless networks and serve as a like-for-like replacement for POTS (including support for local and long-distance calling, call forwarding, caller ID, call waiting and E911 location detection). The company has also developed a "legacy emulation" capability to help large, enterprise customers prepare for upgrades.

AT&T estimates that it spends about $6 billion annually on direct costs to keep its copper network – described as an energy hog – running.

A 'more sympathetic' FCC chair

Levin believes that regulators emphasize and "understand that economics do not justify carriers continuing the investment in maintaining the old network." But he also points out that regulators are still concerned about leaving some customers in the lurch.

Federal law, Levin points out, allows carriers to retire copper networks so long as they provide ample notice and don't discontinue "regulated services." AT&T's approach with Phone-Advanced and legacy emulation aims to iron out that wrinkle.

Looking ahead, Levin believes that FCC Commissioner Brendan Carr, who is slated to become the agency's chairman, "will be more sympathetic to carriers and more decisive in his decision-making" than the current FCC, which is still being led by Jessica Rosenworcel.

"We also think that he will be clearer in directing staff to approve decommissioning requests. Further, we think he will be an effective voice in urging states to be more accommodating to ILEC requests to retire copper networks," Levin added. Carr, he said, "appears more willing to take criticism if he believes the action advances his goal."

Levin has been critical of current FCC Chairwoman Jessica Rosenworcel, believing she will be viewed "as the least consequential Chair in modern times."

Levin, a former FCC official, acknowledged in a footnote that his critical remark caught the attention of Carr, who came out in Rosenworcel's defense.

"That observation caused Carr to note in a public speech that if Blair showed up at that evening's Chairwomen's dinner (where the Federal Communications Bar Association gathers for an event that includes a stand-up comedy act by the Chairwomen) he would need to bring 'a food taster'," the footnote read.

Static from BellTel Retirees

Meanwhile, AT&T is getting pushback in other quarters. The Association of Belltel Retirees believes the plan could still leave some people who rely on landline phone service vulnerable due to "finicky" Internet-based phone services.

"AT&T's intention to eliminate landline phone service across the country shows reckless disregard for so many Americans who rely on landlines as a critical lifeline in their everyday lives," Tommy Steed, chairman of the Association of BellTel Retirees, said in a statement. "Leaving vulnerable residents to rely on finicky Internet-based phone services that are prone to outages would be malpractice for a company supposedly committed to equitable communications services for all its customers. The Association of BellTel Retirees stands firmly against this greed-driven decision and will continue working to ensure affordable, reliable access to phone services for everyone."

But it's still not clear what the organization intends to do about it. The association, an official said, is still discussing its plan of action.

The Association of BellTel Retirees, an organization founded in 1996 to focus on the protection and enhancement of pensions and benefits for telecom retirees, has about 134,000 members, according to its website.

AT&T seems to be aware that it might face this kind of criticism. Speaking earlier this week at the UBS Global Media & Communications Conference, AT&T John Stankey said his company is doing all it can to ensure that "nobody is left behind on the kind of services they need. But you need deliberate incentives and you need deliberate approaches to make that actually happen."