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Congress

AT&T's Stephenson: FCC Decision on Verizon Deal Will Provide Industry Guidance

June 12, 2012

AT&T's chief said Tuesday that his company is watching to see if federal regulators approve Verizon's bid to buy spectrum from a group of cable firms so that the industry has clearer guidance on what types of deals are acceptable.

"We're all watching the Verizon deal very closely, because we think that will provide a good indication in terms of what the FCC's position is on spectrum aggregation and how much spectrum can be owned and so forth," AT&T Chairman and CEO Randall Stephenson said during a discussion on mobile technologies at the Brookings Institution.

Verizon, the nation's biggest wireless provider, is seeking approval from the Federal Communications Commission to buy spectrum from a joint venture between Comcast, Time Warner Cable and Bright House Networks and from Cox Communications as part of a separate deal.

AT&T's own recent history with the FCC on industry transactions is rocky. AT&T, the nation's second biggest wireless provider, was forced late last year to drop its bid to buy rival T-Mobile USA after both the FCC and Justice Department came out against the transaction.

Stephenson, however, also indicated his firm may have more interest in the Verizon transaction than just wanting clearer guidance from the FCC on what deals will pass muster. Stephenson said AT&T would make a bid for spectrum in the 700-megahertz band that Verizon said it would sell if regulators approve its bid to buy more desirable airwaves from the cable firms.

Verizon's "spectrum pairs perfectly with ours," Stephenson said. "If we were to have access to that spectrum, we could put it to work in 60 days."

Stephenson's comments appear to underscore a concern from the critics of the Verizon-cable deals. Public interest groups and some rivals have argued that Verizon's pledge to sell its 700-megahertz spectrum will do little to address competitive concerns about the cable deal if those airwaves end up in the hands of the second biggest player in the market.

T-Mobile USA has been a vocal opponent of the Verizon deal, saying that Verizon is not using all the spectrum it owns now and that its deal with the cable firms will keep those airwaves from smaller rivals who need it more to remain competitive.

But Stephenson argued that access to more spectrum is an issue all wireless carriers face and was one of the reasons why his firm sought to buy T-Mobile. Stephenson said the federal government needs to be more aggressive in freeing up more spectrum. He added that proposals for wireless operators to share spectrum with federal agencies does not address the industry's immediate problems, saying demand for access to wireless broadband will out strip supply by next year. He said his firm is already running out of spectrum in some markets, but declined to name which ones.

"Our problem is not a long-haul problem, it's a now problem," he said.

After criticizing the FCC's actions surrounding the AT&T-T-Mobile deal, Stephenson did praise the agency for moving quickly since the beginning of the year to approve smaller spectrum deals between firms. But he added, "This has to be the norm and not exception."

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