AT&T's Stephenson: Regulations will impact capital spending

Image: AT&T

AT&T said the next leader of the FCC will have a direct effect on how the telco thinks about capital spending.

Randall Stephenson, CEO and chairman of AT&T, told investors during the Goldman Sachs Communacopia 2016 event that the telco is facing an uncertain environment in anticipation of who will replace current FCC chairman Tom Wheeler when he eventually steps down. 

“As you start to make capital investment decisions over the next three or four years, it’s hard to make those decisions until you know who is sitting in that chair, as Chairman of the FCC,” Stephenson said. “That will determine how these services and these investments are regulated in the foreseeable future.”

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Stephenson added that “it was a profound change that happened this last year."

Last February, the FCC voted along party lines to pass a net neutrality rule that would ban blocking, throttling and paid prioritization. After the rules passed, a number of telcos and industry groups, including AT&T, CenturyLink and TIA filed suits challenging the regulator’s authority.

In particular, Stephenson said that a recent court decision to defer any issues related to net neutrality to the FCC illustrates how much power an FCC chairman has in deciding how the overall telecom industry is regulated.

“Why is that so important?,” said Stephenson. “It’s important, because what we have just demonstrated is the individual who is Chairman of the FCC kind of has somewhat ultimate rule making authority under this kind of purview.”

Stephenson said that the regulatory regime has created an environment where AT&T’s board has to consider capital spending plans based on the regulator’s leadership.  

“I have never been in a situation where my board was more active in discussing capital allocation by virtue of who is the regulator,” Stephenson said. “The regulator is very determinative in terms of how my board thinks about capital investment and capital allocation.”

For more:
- listen to the webcast (reg. req.)

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