AT&T (T) shares closed at $22.01 on Thursday, marking a 1.92% decline and a fourth consecutive session of losses. The stock has now fallen approximately 6.7% from its June 12 close of $23.58, a notable drop for a stock traditionally favored for its dividend and defensive profile. The decline comes as U.S. markets prepare to close on Friday for the Juneteenth holiday, meaning the news that broke late Thursday will not be priced in until trading resumes.
On a day when the broader market showed strength—the S&P 500 gained 1.08% and the Dow Jones Industrial Average rose 0.14%—AT&T underperformed its peers. Verizon (VZ) fell 1.03%, while T-Mobile (TMUS) edged up 0.20%. AT&T’s decline was driven by company-specific headwinds rather than sector-wide weakness.
California Regulatory Pressure Intensifies
The California Public Utilities Commission (CPUC) has escalated its opposition to AT&T’s plan to phase out its copper-wire phone network. In a filing with a state court and the Federal Communications Commission (FCC), the CPUC argued that AT&T has not sufficiently demonstrated that all affected customers would have access to adequate replacement services. Under California’s “carrier of last resort” rules, AT&T is required to maintain basic phone service for customers without alternative options.
AT&T contends that maintaining the aging copper network costs approximately $1 billion annually, yet it now serves only about 3% of homes in its California footprint. The company wants to migrate these customers to fiber-optic and wireless bundles, but regulatory approvals are required before it can shut down the legacy system. This regulatory friction adds uncertainty to AT&T’s broader network modernization strategy.
CFO Transition Adds Another Layer of Uncertainty
In a separate development, AT&T disclosed in an SEC filing that CFO Pascal Desroches will step down at the end of the year. Jennifer Biry, currently a senior executive at McAfee and a former AT&T and WarnerMedia executive, will join as deputy CFO on July 6 and assume the CFO role on January 1, 2027. Biry described her return as a “full-circle moment,” but investors will be watching for clarity on capital allocation priorities, including debt reduction, share buybacks, and dividend sustainability.
Fiber Strength Offers Some Positive Signals
Amid the regulatory and management changes, AT&T highlighted strong performance from its fiber business. The company announced that its AT&T Fiber service ranked first in 107 categories in an Opensignal home internet performance report, nearly double the score of the next closest provider. In more than 60% of the 26 metropolitan areas studied, AT&T swept all five measured categories. Jenifer Robertson, executive vice president and general manager for AT&T Consumer, said, “We’re leading by a meaningful margin.”
During a June investor presentation, Desroches emphasized that the fiber network is being built to be “AI ready” and remains AT&T’s lead offering, while fixed wireless continues to serve as a complementary tool. The company reaffirmed its second-quarter free cash flow guidance of $4.0 billion to $4.5 billion.
Upcoming Catalysts
The FCC has set a July 1 deadline for comments on a separate AT&T application to phase out domestic legacy voice services. If the FCC does not intervene, the application could receive automatic approval by July 17. AT&T’s second-quarter earnings call is scheduled for July 22, when investors will get a clearer picture of fiber subscriber growth and overall financial performance.
While AT&T’s fiber wins are encouraging, the stock’s valuation remains weighed down by regulatory overhang and leadership transition. If the company can demonstrate that fiber growth translates into tangible subscriber and cash flow gains, it may eventually shed its high-yield, legal-risk label and be valued as a network-growth story. For now, the path forward is clouded by the California copper dispute and the CFO shuffle.
