AT&T says it won’t build fiber home Internet in half of its wireline footprint
AT&T is ditching copper and building fiber, but many will get only 5G or satellite.
Credit:
Getty Images | Joe Raedle
AT&T this week detailed plans to eliminate copper phone and DSL lines from its network while leaving many customers in rural areas with only wireless or satellite as an alternative.
In a presentation for analysts and investors on Tuesday, AT&T said it has a “wireless first” plan for 50 percent of its 500,000-square-mile wireline territory and a “fiber first” plan for the rest. The more sparsely populated half accounts for 10 percent of the potential customer base, and AT&T does not plan to build fiber home Internet for those users.
AT&T said it expects to be able to ditch copper because of state-level deregulation and the impending shift in power at the Federal Communications Commission, where Trump pick Brendan Carr is set to become the chairman. California is the only state out of 21 in AT&T’s wireline territory that hasn’t yet granted AT&T’s request for deregulation of old networks.
An AT&T press release said the company “is actively working to exit its legacy copper network operations across the large majority of its wireline footprint by the end of 2029.” AT&T’s wireline footprint has 88 million locations, said Susan Johnson, an AT&T executive VP in charge of supply chain and wireline transformation.
About 21 million of those have access only to voice service. The other 67 million are eligible for Internet access, and 29 million of those have access to fiber already. AT&T plans to boost its number of fiber locations to 45 million by the end of 2029 but says it isn’t profitable enough to build fiber to the other parts of its old landline phone and DSL networks.
AT&T: Fiber not profitable enough in half of footprint
AT&T reported that its residential business has 13.97 million Internet connections, including 9.02 million fiber connections. Many copper users who don’t get fiber will be able to use 5G-based home broadband with AT&T Internet Air and wireless phone service with AT&T Phone-Advanced. Johnson said that Internet Air offers “up to 25 times faster speeds than legacy ADSL.” But customers who don’t get access to the terrestrial wireless service may have to use satellite.
“Wireless first is the name for our wire center areas where we have not built and do not plan to build residential fiber. There’s not an economic path to do so,” Johnson said. “These wire centers may still have fiber supporting businesses or cell sites but no consumer fiber. This is about 50 percent of our land area but it’s only 10 percent of the population.” These areas have “four remaining copper customers per square mile,” she said.
Wireless home phone service will be available to “the vast majority of our existing copper-based customers,” but not all, she said. In some areas, “we will need to work with our customers to move them to other technologies, including satellite. But we’ve made a pledge that we’re going to keep our customers connected through the process and make sure that no customer loses access to voice or 911 services.”
Johnson said AT&T’s “plan is to have no customers using copper services in these wire center areas by the end of 2027.” A Republican-majority FCC will help, she said.
“We are going to work with the FCC to speed up and scale this process, and with the new administration we are optimistic that we can make even more progress in simplifying our networks and migrating our customers over the next several years,” Johnson said.
She said that AT&T Phone-Advanced “was specifically designed to meet the FCC’s criteria as an adequate replacement product for our traditional landline phone service, and we have successfully completed the testing with the FCC and we are continuing to move through their preview process.”
AT&T has an application pending with the FCC in a small number of wire centers, “which, if approved, would allow us to replace traditional landline phone service, think POTS [Plain Old Telephone Service], our most regulated product, with AT&T Phone Advanced,” Johnson said.
California demanded more reliable service
AT&T already achieved what Johnson called “an absolutely critical precedent” earlier this year when the FCC allowed it to stop accepting new copper-based service orders in 60 wire centers across 13 states, she said. A wire center consists of a central office and the surrounding infrastructure, including the copper lines that stretch from the central office to homes and businesses. AT&T has 4,600 wire centers in the US, Johnson said.
Notably, AT&T’s plan to ditch copper currently excludes California, where the Public Utilities Commission rejected AT&T’s request to end its landline phone obligations in a June 2024 ruling. “California is not included in the plans I just laid out for you. We are continuing to work with policy makers to define our path in that state,” Johnson said.
AT&T is still classified as a Carrier of Last Resort (COLR) in California, and the state telecom agency rejected AT&T’s argument that VoIP and mobile services could fill the gap that would exist if AT&T escaped that obligation. Residents “highlighted the unreliability of voice alternatives” at public hearings, the agency said.
An administrative law judge at the California agency said AT&T falsely claimed that commission rules require it “to retain outdated copper-based landline facilities that are expensive to maintain.” AT&T is allowed to upgrade those lines from copper to fiber, the agency said.
AT&T achieved its goal of deregulation in the other 20 states where it has wireline operations, Johnson said. “While California is the last state to modernize, we’ve started a process there and we will continue to work towards this objective,” she said.
The deregulation in other states already helped AT&T stop offering old services in “about 250,000 square miles where we have met the regulatory requirements to no longer offer regulated services because our customers have moved on to other services,” Johnson said.
AT&T planned to hit that milestone by 2025 but achieved it this year, she said. But as Johnson stressed, AT&T wants to get rid of copper in the remaining 500,000 square miles. “This is really good progress… however, without the full discontinuance of services across an entire wire center geography, we’re unable to stop the maintenance, repair, and attack the more fixed infrastructure costs,” she said.
Copper network degrading
Johnson said that AT&T is “seeing declining reliability with storms and increased copper theft. Copper simply does not do well with water and flooding, and repairs are very labor-intensive.” State regulators have said the declining reliability is largely AT&T’s fault. Many copper lines deteriorated because AT&T failed to do maintenance that would prevent lengthy outages and other troubles, a 2019 investigation by California state regulators found.
As noted earlier, AT&T said it plans to have no customers using copper in half of its territory by the end of 2027. In the other half, where AT&T described a “fiber first” strategy, there will nonetheless be copper customers who won’t get a fiber upgrade and will have to stop using copper by the end of 2029, Johnson said.
AT&T plans to build lots of fiber in the more populated half, but “not every customer location will be reached with fiber in these areas and we will still serve some of the customers in these areas with wireless alternatives,” Johnson said. AT&T’s “plan is to have no customer using copper services in these wire center areas by the end of 2029.”
The biggest beneficiaries of AT&T’s copper retirement may be shareholders. Johnson said the old network is an energy hog and has $6 billion in annual expenses. “Overall, our legacy business is profitable today but the revenue declines are accelerating,” she said.
AT&T is selling copper after it is decommissioned and leasing out some unused central offices. “By targeting the complete customer transition in a wire center, with the least profitable wire centers first, we are able to remove these geographic costs and really optimize margins as we move towards exiting copper services,” Johnson said.
Besides the 45 million existing and planned fiber locations, AT&T said its total fiber footprint by 2029 will include another 5 million or so locations through Gigapower, a joint venture with Blackrock, and agreements with commercial open-access providers.
Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry.
