I can't find a good solid ruling for this one.

Are phone lines grounded locally at the house?

The configuration at my house has the main phone line coming off the pole,
down to a junction box, where 2 phone lines leave and a single ground wire
connects to the cold water plumbing.

I can't find any definite answers as to whether or not that ground wire is
required, desired, or useless. The intent is on replacing the whole setup
with CAT 5E (seeing how it's just as cheap as CAT 3 or phone cable) and
re-routing the wires, but I don't know if I need to keep the ground wire.
It looks like pretty standard 14 gauge wire, in a grey sheath.