ATandT CEO Stephenson: 8 Takeaways from His Fortune Interview

AT&T CEO Randall Stephenson, at the Brainstorm Tech conference this week, spoke frankly about everything from the spectrum crunch AT&T faces, to Yahoo’s new CEO to the benefits of playing golf. We’ve put together the 8 most interesting takeaways from his 30-minute interview.

AT&T CEO Randall Stephenson took the stage at Fortune€™s Brainstorm Tech conference in Aspen, Colo., July 17, speaking candidly and in some detail with interviewer Stephanie Mehta.

Compared to the interview Apple CEO Tim Cook gave a few months back, telling his All Things D interviewers, as he took his seat, €œNever have I seen the things I can€™t talk about today,€ Stephenson was downright open. While he didn€™t spill any beans about the upcoming iPhone€”nor was he asked to€”he did delve into several topics that make for interesting reading, or viewing. Most notably:

He€™s happy about Yahoo€™s choice of Marissa Mayer for CEO.

Or really, he€™s just looking forward to having somebody finally occupy the position for the long term, since Yahoo is a critical partner to AT&T, contributing its email client and portal for all AT&T€™s broadband services.

€œI mean, [Yahoo is] the guts of a lot of our broadband and our mobile Internet business. So, you have this kind of turmoil in a very important part of your ecosystem, it€™s a little maddening,€ said Stephenson. €œ €¦ So, I€™m excited that they€™ve picked somebody. They€™ve picked a veteran in the industry, somebody with a track record. I€™ve never met her, but her reputation is just terrific.€

AT&T will support Facetime over 3G, just not any time soon.

To an audience member€™s question about whether AT&T will support FaceTime over 3G but charge extra for it, Stephenson answered: €œWe€™re working with Apple right now just to get the technology stabilized and so forth. So, it€™s too early to talk about pricing.€

Changing data pricing models isn€™t easy, but the industry has €œgradually and finally gotten the pricing model right.€

€œThe industry came out with pricing data at $30 all you can eat, and this was pre-iPhone era. The iPhone came along and radically changed the industry,€ said Stephenson. €œSo, the industry has grappled with getting the pricing model turned. And in this industry that doesn€™t happen quickly. €¦ I€™m not going to argue with you that we did it right, but once you kind of step into that, getting the consumers to go along with you and change the pricing model is not an easy chore.€

A day later, AT&T announced it will begin offering Mobile Share plans in late August. Like Verizon€™s Share Everything plans, the new AT&T plans focus on a data allotment instead of a single device.

The government really is trying to get more spectrum to the carriers. It just needs to try even harder.

€œThe government is doing a lot€”probably not enough, but the government is doing a lot,€ said Stephenson, adding that the government has identified a block of spectrum that it will soon auction.

That spectrum is 50MHz, he went on to explain; for context, AT&T is €œgoing through about 10MHz of spectrum a year,€ and in the next three to four years has €œline of sight to exhausting the spectrum€ that it currently holds.

€œWe can€™t operate at traditional government speeds on approving this spectrum and getting it to the marketplace. We had spectrum transactions last year that took 12 months to 18 months to get done. That€™s not going to cut it,€ he went on. €œWe€™re operating at Internet speed here. The government is going to have to step up.€

Though, €œin their defense,€ he added, €œthe FCC in the last four or five months has approved some transactions in three, four-month time [frames].€

Government isn€™t the main problem€”€œspeculators€ are holding things up for America.

While the U.S. government has identified 50MHz of spectrum that it plans to auction off, in Germany, France and Japan, they€™ve identified or auctioned €œ300, 400, 500MHz of spectrum that they€™re bringing to those marketplaces,€ said Stephenson.

Where is the equivalent American spectrum? It€™s held by speculators€”companies or people that are sitting on it, waiting for the price to go up. Stephenson said he found himself playing golf with just such a fellow.

€œHe and I agreed we ought to sit down and talk about this. We paid $2.5 billion for his fallow spectrum. They were sitting on it, speculating on it. There€™s a lot of these companies out there doing these kinds of things.€

Expect to see €œspectrum sharing€ as one solution to the spectrum crunch.

€œThere will be things like spectrum sharing where the government may have spectrum that they€™re not willing to get rid of but they only need it at certain times of the day or certain times of the year,€ Stephenson said. €œWell, can people step into that spectrum and utilize it when it€™s fallow and not being used by the government? Significant technology innovation is going to be required to utilize that. We€™re working on that. The whole industry is working on that. That€™s a much longer-term solution.€

Sears drove the idea of 1-800 calling.

Discussing some content providers€™ willingness to foot the bill for users€™ surfing, Stephenson told the story:

€œGo back, 30, 40 years, who drove the 1-800 voice model? It was Sears. Why? They wanted the customer not to be apprehensive to come to them, so they said, €˜Look, we€™ll pay for the long-distance business, the long-distance traffic, if you get the customer to us.€™ So, we developed these services, allowed the customer to call without paying for it. Sears picked up the tab. And what happened? It drove the cost of long distance down dramatically.€

Pack your earplugs€”in-flight voice calling will eventually be a reality.

It will be voice over IP (VOIP), which is a low-bandwidth data requirement, so it ought to be a no-brainer, said Stephenson. The issue for now is the coverage model and the pricing models improving, and the providers, whether satellite guys or not, figuring it out.

VOIP calling, he added, €œought to be [a service] you could price and could be a good runner on an airplane. I don€™t think we€™re going to be there in the next 12 months on an experience that many of us would find acceptable, but it seems to me inevitable that there will be voice on airplanes.€

Follow Michelle Maisto on Twitter.