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AT&T chief to FCC: Speed up those spectrum license transfers

Randall Stephenson says it's clear that regulators don't like mega-mergers. But, he says, they should hasten the process for transferring spectrum -- or the industry faces a dire capacity shortage.

DALLAS -- AT&T's CEO, Randall Stephenson, is urging regulators to figure out how to get new spectrum in the hands of wireless operators now, or the industry will run out of capacity very soon.

AT&T CEO Randall Stephenson discusses the spectrum crunch at the TIA 2012 show. CNET/Marguerite Reardon

Speaking here today at the Telecommunications Industry association event, Stephenson said that the 50MHz of wireless spectrum the FCC expects to auction as part of the broadcast incentive auctions won't be enough to satisfy growing demand. In fact, he said, the industry is much closer than many think to running out of available spectrum.

He said that other countries, much smaller than the U.S., have made getting more spectrum into the pipeline a priority. For example, Japan is working to get an additional 400MHz of spectrum in the hands of wireless operators. Germany recently auctioned off 350MHz. The U.K. and France have 310MHz and 250MHz respectively of spectrum earmarked for public use.

"By 2013 demand [for wireless data services in the U.S.] will outstrip supply," he said. "This isn't a problem that is six to eight years from now. It's happening now."

He said the smartphone revolution started by Apple's iPhone pushed data growth to new heights. And he expects network traffic to grow at least 75 percent each year for the next five years, fueled by the use of 4G LTE networks to drive cloud-based services, through which people will store and access their music, videos and photos, as well as access more robust mobile Web sites using HTML 5.

He went on to say that the FCC has made it clear that "large scale M&A is not a solution." He called on the agency to come up with other near term solutions. Most notably, he suggested that the agency continue to put stringent build out requirements on spectrum license holders, so that speculators can't hoard spectrum.

And he also called on the agency to speed up the process for approving the sale of spectrum licenses in the secondary auction.

Last year at the same time that AT&T was trying to get its mega merger with T-Mobile approved, it also bought 700MHz spectrum from Qualcomm in a deal valued at around $1.9 billion. The FCC review process took nearly a year to complete. And while the FCC and the Department of Justice eventually rejected AT&T's $39 billion bid for T-Mobile, the FCC ended up approving the transfer of Qualcomm licenses to AT&T.

Now AT&T has its eye on additional wireless spectrum in the 700MHz frequency that Verizon Wireless says it will sell if the FCC approves a deal it has struck with cable operators to buy some of its unused AWS spectrum.

AT&T may also be interested in wireless spectrum that satellite TV provider Dish Network is trying to get approved for terrestrial based wireless broadband services.

And finally, Stephenson said that local regulators need to do more to speed up the approval process for building new cellular towers.

"Approval can drag out for years," he said. "And that delays investment and delays benefits of services to consumers."

He said that the government needs to make building wireless infrastructure a top priority for economic growth.

"If you look back generations ago, we had some fast builds for railroads and highways," he said. "Congress made those projects a national priority."