AT&T's Stephenson: Policymakers Must Think Differently About Spectrum Issues

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AT&T chairman Randall Stephenson told a Media Institute dinner crowd Tuesday night that the telco was running out of spectrum and that it was going to have to start thinking differently about how it addressed that problem, suggesting that applied to both the long-term need to free up spectrums through incentive auctions and short-term, about the proposed AT&T, T-Mobile merger.

Stephenson, in town to pick up the Institute's American Horizon award for corporate leadership on speech issues, gave a shout-out to FCC commissioner Robert McDowell, calling him somebody "who understands there is a link between world-class telecommunications infrastructure and the regulation policies that motivate and drive that kind of investment that makes that a reality. McDowell shared the spotlight with Stephenson, picking up the Freedom of Speech award. In his speech, McDowell congratulated Stephenson, then quipped: "I'm sorry, but apparently that is all my legal team says I am allowed to say about you," a reference to the fact that the AT&T/T-Mobile merger is currently before the commission.

In his speech, Stephenson painted a future, and a pretty immediate future, of high-definition video conferencing on mobile devices, medical imaging will be commonplace, while access to content will be seamless "across all networks and across all devices," all via mobile broadband. Stephenson said the smart phone revolution has just begun, and that as chaotic and radical as the last four years have felt, the next five years will trump that.

He made a pitch for mobile broadband as a great democratizer of Internet access. "The people in rural America and small towns and inner cities are not going to be excluded," appearing to make a case for a robust mobility fund, the money the FCC is planning to put aside to subsidize wireless broadband in its Universal Service Fund reforms.

He evoked the Arab Spring movement that was driven by social media. "Think about what happens when tower requirements begin to get smaller, the network technologies get better, the devices shrink and you have ready access to video streaming on very, very inexpensive devices." He said next gen will be revolutionary, but only with the required elements of 1) "tax and regulatory policies that motivate and incentivize investment." 2) Spectrum. He called it the other building block.

New tech is going to require a lot of airwaves, he said. He said he appreciated all the attention that Congress and Commissioner McDowell and Commissioner Mignon Clyburn (she was also in the room) were putting on that issue to get more spectrum into the marketplace--the FCC is trying to get Congress to give it incentive auction authority. But he said that despite that effort, it
would take "many, many years" to get that spectrum to market, while AT&T was hurting now. "The problem is at AT&T that we are now in many markets approaching exhaust in our spectrum position. We are basically running out of capacity. We're out of spectrum."

That's where T-Mobile comes in. "That transaction was done with one purpose in mind. We put these two companies together and it creates more capacity. It makes more elegant utilization of spectrum position of the two companies and it is fundamental to continue this wave of innovation. But policymakers as well as business leaders are going to have to think differently about how we address these issues."

Speaking earlier, Sen. Mark Warner (D-Va.) a member of the Senate commerce Committee and a former cell phone exec (his company became Nextel), said that Congress needed to work out a way to free up spectrum, then talked about the need for communications companies to help out in Congress' effort to reduce the deficit. "AT&T is prepared to do their part on budget deficit," said Stephenson when it came turn to speak, "if [Warner] will get that spectrum up for auction..." Wireless companies are planning to bid billions on that reclaimed broadcast spectrum, with a chunk of that going to deficit reduction after broadcasters and an emergency broadband communications network get their cuts.

Warner, a former cell phone executive, put in a plug for getting new technology out into the marketplace, which was greeted by cheers from the Consumer Electronics Association table. He said that it was "important to think through in a rational way the long-term commitment to value that broadcasters have in terms of providing needed content to local communities," but he said a voluntary auction plan "really makes sense"--more applause from CEA.

But he also said the federal government needs to use its spectrum more efficiently and plugged his legislation calling for a spectrum inventory.

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