- AT&T has the spectrum it needs for the immediate future, CFO Pascal Desroches said at an investor conference
- That prompted a cable industry-backed group to call out AT&T and the broader cellular industry for contradicting their own claims about a spectrum crunch
- The brouhaha comes as lawmakers are deciding how much and what kind of spectrum to allocate to the industry for the next decade
AT&T doesn’t immediately need more spectrum, but it’s always on the lookout for additional airwaves to meet future demands, AT&T CFO Pascal Desroches said at the opening of the Mizuho Technology Conference on Tuesday.
However, it’s the part about not needing spectrum right this minute that AT&T’s rivals in the cable industry seized upon, maintaining that he’s saying the “quiet part out loud,” contradicting arguments that AT&T and its fellow wireless carriers are making in Washington, D.C., about the dire need for more spectrum, stat.
AT&T CFO zooms out
Desroches said that when he took the CFO role at AT&T almost five years ago, the company was concerned about its spectrum position. Since then, it’s invested billions of dollars in spectrum, including in the C-band and 3.45 GHz auctions, and it has found “that spectrum propagates much more efficiently than we even thought,” he said.
“We think it's a good thing long term for the industry to have more spectrum. But there is no pressing need that I feel like we have to go out and acquire spectrum in the next 12, 24, even 36 months,” he said.
Not surprisingly, that prompted the cable company advocates to argue that his words amount to the exact opposite of what the wireless industry is peddling in Washington, D.C. The Big 3 wireless companies are often accused of telling Wall Street investors one thing and D.C. policymakers another.
"AT&T's comments mirror the same contradictory messages executives at Verizon and T-Mobile have delivered to investors. They have no need for additional spectrum – the truth is that this lobbying campaign is an effort to block competition from lower-cost wireless providers and new private 5G networks,” said Tamara Smith, spokesperson for Spectrum for the Future, in a statement provided to Fierce.
“To advance competition, Congress should protect the thousands of CBRS license holders – American companies – that have already invested billions of dollars and are serving millions of customers, businesses, factories, and anchor institutions,” Smith added.
After this story first published, AT&T reached out to Fierce with the following statement:
“While we can meet customer demand with our current spectrum holdings for now, as Pascal noted, the wireless industry will need more spectrum in the future to meet explosive demand. The Senate’s pipeline legislation rightly addresses this looming need, and we applaud them for it,” AT&T spokesman Alex Byers told Fierce.
Cable’s beef with AT&T
Spectrum for the Future – whose membership includes Comcast, Charter Communications, NCTA, Public Knowledge and Federated Wireless – argues that the overwhelming majority of mobile phone data travels over Wi-Fi and not cellular networks. Comcast and Charter, in particular, aggressively market their Wi-Fi networks as superior to 5G. Therefore, they say more priority should be given to unlicensed spectrum versus the licensed spectrum that wireless carriers demand.
As Smith alluded to, cable companies are also peeved about AT&T’s proposal to move Citizens Broadband Radio Services (CBRS), which would effectively end the CBRS industry as it stands today. The FCC set up the CBRS band as an “innovation band” that opened spectrum up to entities that traditionally can’t afford to buy licensed spectrum in big auctions that the wireless carriers participate in.
In an op-ed published by the Wall Street Journal last month, CTIA CEO and President Ajit Pai boasted about all the spectrum he was able to unleash for the U.S. wireless industry when he served as chairman of the FCC in the first Trump administration. According to Spectrum for the Future, the Trump-Pai record of success from 2017-2021 includes launching CBRS, which is a spectrum sharing scheme that protects military incumbents already using the band.
All of this is occurring as carriers like AT&T and Verizon and industry groups like CTIA are thanking lawmakers and the Trump Administration for refilling the spectrum pipeline in the big budget reconciliation bill making its way through Congress.
The latest proposal calls for renewing the FCC’s auction authority for 10 years and making 800 megahertz of new spectrum available for auction. But details are still being worked out, so it’s unclear what the final language is going to say.
No doubt, negotiations will continue until it’s signed, sealed and delivered.
Story updated June 11 with response from AT&T.