(Reuters) -California rejected AT&T's bid to stop offering landline telephone service and other services as the "carrier of last resort," a state agency said on Thursday.

Marin County said AT&T's request made in March 2023 would have ended services to over 580,000 eligible households throughout the state.

The California Public Utilities Commission said in rejecting AT&T's request that the decision did not prevent AT&T from retiring copper facilities or from investing in fiber or other facilities or technologies to improve its network.

AT&T California President Marc Blakeman said "we are fully committed to keeping our customers connected while we work with state leaders on policies that create a thoughtful transition that brings modern communications to all Californians."

The company it was committed to ensuring customers can keep their existing traditional landline voice service until they have access to an alternative. "No customer will be left without voice and 911 services," Blakeman said.

The CPUC said AT&T is pivotal in providing reliable telephone service to communities across the state and said it did not meet the requirements for withdrawal.

"We will protect customer access to basic telephone service - no matter where they live, income, or access to other forms of communication. Our rules were designed to provide that assurance, and AT&T's application did not follow our rules," said Commissioner John Reynolds.

The CPUC opened a new rulemaking proceeding on Thursday to adapt its regulations to evolving market conditions and technological advancements.

AT&T said it is required to go through a stringent review process by the Federal Communications Commission that ensures Californians retain access to reliable voice services.

It also cited proposed legislation that would ensure rural customers are not impacted. "We are fully committed to keeping our customers connected while we work with state leaders on policies that create a thoughtful transition that brings modern communications to all Californians," AT&T said.