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Let AT&T Discontinue Dying Landlines, Economist Tells CPUC

AT&T should receive carrier of last resort (COLR) relief in parts of California that have at least one voice alternative, economist Mark Israel said in testimony AT&T submitted Tuesday at the California Public Utilities Commission (docket A.23-03-003). Letting the carrier…

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discontinue plain old telephone service (POTS) “would be economically efficient, benefit consumers, and serve the public interest,” he said. “A decades-old COLR obligation mandating indefinite support of a declining legacy technology is economically inefficient, particularly in the face of widely available alternatives based on superior technologies, including mobile and” VoIP. The COLR obligation “ties up scarce resources that could better serve consumers elsewhere,” added Israel. “COLR distorts competition because it is applied to a single firm in the market, imposing costs that weaken that firm competitively, thereby reducing the competitive pressure that firm can apply to other firms, thus harming the entire market.” In separate testimony, AT&T Vice President-Global Public Policy Michael Alarcon said maintaining the old landline network gets tougher every day. “With fewer and fewer POTS customers, economies of scale have been evaporating,” he wrote. “It is increasingly challenging for the revenues derived from the remaining POTS customers to support the operating costs. A significant amount of outside plant, transport, and switching facilities are necessary to serve even a handful of customers -- and these facilities require ongoing repair and maintenance.” COLR relief would free resources for upgrading networks to fiber and 5G wireless, he said. The CPUC plans eight hearings on AT&T's applications for COLR and eligible telecom carrier (ETC) relief (see 2312040071).