Bloomberg News

AT&T Chief Stephenson Says FCC Slow to Provide Wireless Airwaves

January 31, 2012

Jan. 26 (Bloomberg) -- AT&T Inc. Chief Executive Officer Randall Stephenson said the Federal Communications Commission has been slow to arrange auctions to provide wireless airwaves needed as use of smartphones and other mobile devices increases.

Stephenson spoke on an earnings conference call today. His company abandoned a $39 billion merger with T-Mobile USA Inc. last month after resistance from the FCC and Justice Department. The purchase would have boosted Dallas-based AT&T’s wireless capacity to feed wireless devices such as tablet computers.

“This FCC has made it abundantly clear” it won’t allow significant mergers “to help bridge their delays in freeing up new spectrum,” Stephenson said. “It appears the FCC is intent on picking winners and losers” in auctions.

FCC policies have left “an industry that is just really stuck in terms of creating real capacity,” Stephenson said.

Rick Kaplan, chief of the FCC’s wireless bureau, in an e- mailed comment said the agency’s goal for spectrum auctions “is that every carrier -- big, medium, or small -- that needs additional spectrum should have a meaningful chance to bid.”

The merger proposal was “unprecedented” and staff at the Justice Department and FCC concluded it would violate antitrust laws and bring higher prices and less innovation, Neil Grace, an FCC spokesman, said in an e-mail.

“Those conclusions surely disappointed AT&T executives, but they followed directly from the facts and the law,” Grace said.

Availability of airwaves, or spectrum, is the “No. 1 issue for us,” Stephenson said. “Growth cannot continue without more spectrum being cleared and brought to market. And despite all the speeches from the FCC, we’re all still waiting.”

AT&T, the largest U.S. phone company, today predicted 2012 earnings that trailed analysts’ estimates as record demand for smartphones such as the iPhone drive up subsidy costs.

The stock fell 2.5 percent to $29.45 at in New York Stock Exchange trading.

--With assistance by Scott Moritz in New York. Editors: Steve Walsh, Andrea Snyder

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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