Congress, Not States, Must Address Privacy and Net Neutrality, AT&T CEO Says

Stephenson acknowledged that reaching consensus in Congress won’t be easy, even after the midterm elections. “I don’t think there’s enough bipartisan support to agree on what the freezing temperature of water is,” he said. “We all understand states engaging in privacy and passing laws to dictate the privacy rules around customer data use,” Stephenson said. “I think those rules are important, I think it’s important to codify those. I think it’s important that it not be done 50 different ways by 50 different states.” There should be “only one cop on the beat,” the FTC, not the FCC, he said.

Congress, not states, should tackle net neutrality, Stephenson said. The Obama administration “swung the pendulum way over here,” he said: Under President Donald Trump, the pendulum has swung in the other direction. “This is another one of these, 'how do you operate in an environment like this?'” he said. California passed net neutrality legislation (see 1809040045) and other states may follow, he said. “We’re looking here at 50 different rules of the road.”

Stephenson isn’t worried about DOJ's appeal of the U.S. district court ruling letting his telco buy Time Warner (see 1807120068). “By any measure,” Justice’s case “was probably not a very good case, it wasn’t a very compelling case,” he said. “The judge’s order revealed the weaknesses in the case.” The burden of the proof is on the department, he said. “They have to demonstrate that the judge got it wrong,” he said. “We feel very good about where we stand on appeal.”

The AT&T CEO acknowledged the litigation has been a huge distraction for the telco: “It hurt the business for a few months” and delayed decisions on various business plans. “It is having no impact on how we work through integration and execute on our plans,” he said.

Stephenson questioned whether China is in the lead on 5G, even if it added 350,000 cellsites last year. “News flash -- there are 1.3 billion people in China,” he said. “They have to have multiples more of cellsites than the United States just to handle capacity and coverage. … That doesn’t imply that they’re in the lead for 5G.” China isn’t dominating the standards development process, he said. “There is nothing in the standards that AT&T did not want and there is nothing that AT&T wanted … that we did not get.”

Business-to-business communications is a huge part of AT&T’s portfolio, and it's gotten more competitive, Stephenson said. “We’re experiencing something interesting” in the segment, he said. “We’re seeing some price competition that kind of snuck up on us. It hit and it hit very quickly.” FirstNet falls in the B2B area and will be “a high growth area” for his company, Stephenson said. “We’re seeing some really good market share pickups on FirstNet.”

Conference Notebook

T-Mobile/Sprint integration is “well underway” even as regulators ponder whether to approve allowing the two to combine, T-Mobile President Mike Sievert said. “We’ve got a full integration going,” Sievert said. “Functional leads … weekly steering meetings, deep work happening.” All of the work is focused on the network, he said. A roaming agreement the two signed as part of the proposed deal “is actually an important integration element,” he said. “We’re five months in” on the transaction, Sievert said. “We’ve met with every major agency in government in detail, taken them through our story.” Regulators are “constructive, open-minded, detail-oriented,” he said. A decision will be based on “facts and economics, not on rhetoric,” he said. The pause in the FCC shot clock announced Tuesday (see 1809110052) won’t slow things down, he said. Sievert said the good news about the new iPhone models, unveiled by Apple earlier Wednesday (see 1809120055), is that they are 600 MHz compatible and will use the spectrum T-Mobile bought in the TV incentive auction. “That’s a big deal,” he said. “You’ll see us encouraging an upgrade cycle.”

T-Mobile Chief Financial Officer Braxton Carter said the carrier is prepared for 5G. “We have 52 different fiber providers,” he said. “We have renegotiated all of our [backhaul] agreements pretty much across the nation.” With the level of competition in backhaul, the carrier doesn’t need its own fiber, he said. T-Mobile is working with tower companies on small cells, he said. Carter also highlighted a Tuesday FCC order allowing Sprint and T-Mobile to bid independently in the 28 and 24 GHz band auctions, despite their proposed deal. The two sought clarity from the FCC, which asked for comment in docket 18-85 (see 1808080046). “In light of the unique circumstances of the [business combination agreement], including its overall purpose, its provisions regarding independent bidding by the parties, and its timing in relation to the unusual sequence of Auctions 101 and 102, the public interest is served by enabling T-Mobile and Sprint to both apply and participate in both auctions, notwithstanding their proposed transaction,” said the Wireless Bureau order.