AT&T hopes to sell landline holdouts on a new kind of home phone

AT&T Inc. hopes to persuade people across the country to break up with their landlines by the end of 2029. To do so, it’s deploying a new weapon that might help: a wireless home phone.

The carrier announced at a recent investor day that it will retire the “vast majority” of its copper networks over the next five years. But it must gain Federal Communications Commission approval to do so and assure the regulator that it’s hooking customers up with adequate replacements.

Enter AT&T Phone-Advanced. The company introduced the landline alternative, known as AP-A, a year-and-a-half ago. The small white receiver is similar to a Wi-Fi router with two antennas and a phone jack for a customer’s existing home phone to plug into. The device runs on AT&T’s mobile network, but it can also tap into a home broadband connection via an Ethernet cable.

Crucially, it’s also compatible with fax machines as well as home security and medical-alert systems, features that some copper landline users still rely on. The device incorporates digital capabilities like the ability to communicate precise locations to 911 dispatchers and filter out spam calls.

As of July, almost 70 million Americans still had a landline, according to the US Chamber of Commerce. AT&T’s copper networks currently spread across 21 states to 88 million customer locations. In about a quarter of those places, the infrastructure only supports voice calls. The company said only 5% of its customers actually subscribe to copper services today.

AT&T has already moved 16,000 customers over to the new devices, but it has to convince other remaining copper landline customers across the country to make the switch and secure FCC permission to shut down copper entirely. California is currently excluded from the copper system shift. Regulators there denied the company’s request to no longer be responsible for the copper lines. Consumers had objected to losing a communications link that is known to still work after earthquakes.

“We have to show to regulators and our customers that this new product is going to work,” Susan Johnson, AT&T’s executive vice president of wireline transformation and global supply chain, said in an interview.

The infrastructure of yesteryear, responsible for carrying voice calls and internet traffic at modest speeds, is quickly becoming a liability for AT&T. It’s vulnerable to water damage and theft. Many manufacturers of the original networking parts have shuttered, leaving AT&T employees to scour eBay for replacements when the lines break down.

It’s also lucrative for telecommunications companies like AT&T to phase out copper and sell the network for parts. Carriers could recover nearly 1 million metric tons of copper over the next decade, fetching more than $7 billion in today’s market, according to estimates from TXO, a UK-based firm that provides engineering services to the industry.

That’s aside from the staggering operational costs. Speaking at the Dec. 3 investor day, Johnson said the company spends $6 billion annually to keep its copper infrastructure running.

“This is a company that will make a fortune off of the copper network,” said Ernesto Falcon, a program manager with the public advocate’s office at the California Public Utilities Commission. AT&T will continue to negotiate conditions with the Golden State for a copper wireline exit there.

- - -

FCC Approval

Elsewhere in the country, the FCC has to approve the shuttering of each network service area, and it must also green-light AT&T’s new home phone as a viable replacement. A swath of Oklahoma may become the proving ground for both of these milestones.

In October, AT&T asked the agency to consider its AP-A service as an adequate replacement for 52 Oklahoma customers across nine network service areas. The FCC has already been studying device performance data collected from existing customers for the new phone, and now AT&T hopes to prove it’s robust enough to stand in for hard-wired copper in these areas.

If AT&T receives commission approval, it will start wooing customers to switch to AP-A in strategic copper service areas where it has direct fiber-to-home connections or where its wireless signals are strongest. In some places, where it’s not feasible to build fiber networks, AT&T will work with satellite partner AST SpaceMobile Inc. to connect customers’ home phones, Johnson said.

AT&T isn’t alone in making the shift away from copper. Lumen Technologies Inc., which has gobbled up local telecom networks sprawling across the country, continues to support customers as they transition away from copper to the “most reliable and secure connection available to them,” said Melissa Mann, senior vice president of government affairs and public policy. “Forcing carriers like Lumen to maintain copper lines and prioritize copper repairs undercuts our ability to invest in the fast, energy efficient fiber networks that this nation needs to remain competitive.”

Other peers, like Verizon Communications Inc., have been “on fiber for 20 years” and don’t have an extensive copper network to decommission, Chief Executive Officer Hans Vestbberg said at a UBS investor conference in early December. But Verizon’s bid to acquire Frontier Communications’ fiber assets highlights the shift in the mobile industry toward modern fiber-supported networks, said John Bergmayer, legal director of industry advocacy group Public Knowledge.

It “does show there’s some interest in wireline connections,” he said. “Not everything is going to wireless in terms of the broad trends.”

Public Knowledge has come around as an unlikely supporter of the substitute technology, even though the group has fought measures for retiring wireline in the past. In early December, it praised AT&T’s testing results and said they “demonstrate that a replacement technology for legacy telephone service is both technologically and economically feasible” - although it also noted the FCC should keep monitoring its performance.

And AP-A also has public safety on its side. NENA, a 911 emergency services trade group, urged the FCC to let AT&T proceed with its plans. Making way for newer network infrastructure and internet-based calling means first responders can receive more data-rich dispatches from emergencies, the group said.

But AT&T still has to win over customers attached to the comfort and perceived reliability of a copper landline. AP-A includes automatic 24-hour battery backup in case of grid outages, with the ability to add even more. AT&T’s Johnson said it’s a misconception to assume copper is more reliable because it’s constantly electrified. When grids go down, those lines are typically kept alive by generators in central locations, she said.

Even in California, where residents are no strangers to natural disaster-related disruptions, it’s no longer a foregone conclusion that copper is king. According to the CPUC’s Falcon, wireless and broadband infrastructure can provide the level of service landline customers expect; it just requires robust investment from the carrier in things like backup power systems.

“These are all measurable things,” he said.

And then, of course, there’s the fact that anything else is going to be cheaper than keeping a landline.

For Randall Durr, a 77-year-old AT&T customer in Robeline, Louisiana, a lower-priced bundle ultimately convinced him to switch. Previously, he paid about $120 a month just to maintain the landline. When he upgraded to AP-A about a year ago, the cost of the home line went down to about $40 monthly.

It also helped that he got to maintain his family’s longtime home phone number.

“My mom lived here for 40 years, and people still call me on it,” he said.