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BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 1

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BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 2 chairman and the program and the publications just

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Ladies and gentlemen, without further ado, please j oin

me in welcoming to this stage Bloomberg BusinessWeek

Chairman Norm Pearlstine. [APPLAUSE]

NORM PEARLSTINE: Thank you so much. Thank you and

good evening. It's my pleasure to be back on the s tage

tonight with Randall Stephenson, who is the CEO of AT&T and

one of the remarkable visionaries in the world of t elecom.

A native of Oklahoma, he joined Southwestern Bell, then a

unit of AT&T in 1982. Over the nearly 30 years sin ce then,

he saw the breakout of AT&T in January of 1984, the

reconstitution of AT&T through a series of acquisit ions and

now is presiding over the company at a time when th e

digital revolution is really changing not only his

business, but all of our businesses, and the combin ation of

digital, mobile and the cloud have really gotten a

tremendous amount of your attention in the years si nce you

became CEO.

I thought perhaps we could begin, if you might just

talk a little bit about what you've witnessed in th at 30-

year career and where you think we're going from he re.


RANDALL L. STEPHENSON: A 30-year career. Actually ,

we mentioned backstage when I started with Southwes tern

Bell in 1982, there was no such thing as mobile tel ephony,

and broadband wasn't even a product or a concept th at

anybody had even conceived of at that time. You pi ck your

head up today and those two capabilities and produc t lines

basically underpin or represent 75% of our $125 bil lion

revenue stream today.

We were largely a voice telephony company. Obvious ly,

over the 1980s, the 1990s, mobility took off and we

invested ourselves very, very heavily in that. But really

mobility -- if you think about it, it took 25 years for the

mobile voice capability to really scale and become a

national capability. Over that 25 years, that beca me

somewhere around a $40 billion revenue stream.

We started the mobile broadband business in earnest

literally in 2007. In that period of time, our mob ile data

business, our mobile broadband business is now in e xcess of

the voice business. It's growing at a 20% clip yea r over

year. The volumes from the mobile broadband busine ss

because of apps and iPhones and tablets and so fort h, over

the last four years, the volumes on these networks have

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 4 grown 8,000%. That has been obviously a logistical effort

to try to stay ahead of those kinds of volumes.

I tell people that 8,000% doesn't sound like a lot,

but try to just conceive if JFK had traffic increas ed by

8,000% in a 4-year period of time, what would be in volved

in trying to get that kind of infrastructure deploy ed in

such a short period of time. But it's been an amaz ing

period. Just the last 4 years have been as amazing a

growth time as I experienced the first 26 years. I mean

really it has dwarfed what we saw the first 26 year s.

I am convinced -- you mentioned it -- that with the

next generation of mobile networks -- we call it LT E.

You've probably read about that and the cloud. I t hink the

next five are going to make the last four look inno cent, to

be quite candid. I'm expecting a period of we like to call

it controlled chaos, but we think it's going to be a

chaotic time in our industry. It's going to be a v ery

exciting time.

NORM PEARLSTINE: So given your size with 260,000

employees, annual revenues of about $125 billion ro ughly,

why do you need to spend $39 billion to go buy T-Mo bile's

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 5 US wireless operations? What can they do that you can't do

yourself?

RANDALL L. STEPHENSON: So if I will go back, this

8,000% growth in mobile data traffic that we've exp erienced

over the last four years, that requires an incredib le

amount of capacity if you think about, as I just sa id,

where this is going. Consider this 8,000% growth h as been

driven by smart phones. It's been iPhones and Andr oid

phones. Tablets are really just beginning.

But when we go to the next technology and you begin to

take all the content that we all carry around on th ese

smart phones and our tablets, when you talk about t he

cloud, think about all this content being put up in to the

infrastructure layer of the network. So now when y ou go to

play a song, when you go to access your address boo k,

you're going to be going across that network. Thin k about

what that's going to do to traffic.

We purchased in 2007 -- one of the first things I d id

in my job is we went out and bought a lot of spectr um. In

our business, that capacity is represented by airwa ves.

You have to own a lot of airwaves and a lot of cell towers

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 6 to accommodate that kind of capacity. We spent $9 billion

just on airwaves to accommodate this growth.

We're sitting at a place right now, New York City

being an example, where we can now see an exhaust s ituation

of this spectrum, meaning we're out of capacity. A nd the

government is working very diligently trying to get

capacity online. They're going to have to find cap acity,

clear it, put it in the marketplace. My view is if this

government were operating at peak efficiency, which I do

not believe our congress is operating at peak effic iency

right now, but if it were, it's going to be at leas t six

years before more of this spectrum or capacity come s

online. Therefore, T-Mobile.

T-Mobile, the German -- Deutsche Telecom, the Germa n

telephone company, owns T-Mobile USA. They are

experiencing in Europe what we're experiencing here in the

United States. They came out last year and said, " We

cannot fund this capacity in the US and in Europe. We're

leading the US." So it looked like an opportunity for us.

We put their spectrum of networks with ours. It

basically results in about a 30% to 40% lift in cap acity.

And so for me, this is what I lay awake at night wo rrying

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 7 about, is how to bring more capacity online. Here is a

terrific opportunity to lift capacity, give ourselv es more

headroom before we hit these capacity walls, and ho pefully

the government brings spectrum to bear in the inter im.

NORM PEARLSTINE: Well, the government has taken a

somewhat jaundiced view of this deal.

RANDALL L. STEPHENSON: Do you really think so?

[LAUGHTER]

NORM PEARLSTINE: Well, I could be wrong. It's not

easy to understand the FCC or the Justice Departmen t, but

it seems like the Justice Department wants to go to trial

with you in February over this. When the FCC wante d

hearings, you decided to withdraw your application there.

Is there a way that you think you can find common g round?

Is there a way to pull this off? Or is it somethin g where

you just have to prove to the courts that it's not going to

be anti-competitive?

RANDALL L. STEPHENSON: We have to be prepared to d o

both. We've said that we're preparing to go to tri al. We

actually think we have a very good case to take to trial.

If you look at the Department of Justice and the wa y they

define the market, they define the market very narr owly,

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 8 that there are only a handful of competitors. They say

there are basically four competitors, and by taking T-

Mobile out of the equation, that you're going to ac tually

reduce the number of competitors and therefore have the

ability to price up services and cause prices to go up.

That's a terrific theory, and in most antitrust cas es

that theory hangs together quite nicely. This is a

situation that is so counter to that theory. What is

transpiring? You're actually going to put two comp anies

together with one goal in mind, and that is to lift

capacity. In our industry that’s highly competitiv e, you

lift capacity. You increase capacity in a competit ive

environment. Prices will go only one direction. T hey will

go down.

In fact, you look over the last 10 years. This

industry has experienced unprecedented consolidatio ns.

There have been a number of consolidations. And st ill any

market in the US, you can still choose between five

providers. Over that 10-year period of time, voice pricing

has dropped by 50%. If you look at data pricing ov er the

last four years, just since these products really h it the

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 9 market, data pricing in that four-year period of ti me, a

megabyte of data to buy it has gone down 90%.

So we feel very strongly that the case is real stro ng

that this is a transaction that will not result in upward

pricing pressure. In fact, we think it will result in

higher capacity and lower prices. Indeed, my premi se is in

our industry, you hit a place where you run out of

capacity, you have one of two options. You raise p rices or

you let quality deteriorate. And so we think there is an

inevitable conclusion to our transaction not gettin g done.

We will run out of capacity, which will result in h igher

prices, not the opposite.

NORM PEARLSTINE: Will T-Mobile stay in the market, do

you think, if you can't do a deal with them?

RANDALL L. STEPHENSON: You know, I can only go by

what they have said publicly. What they have said publicly

is they're not going to invest in the US anymore. The

business is going to have to stand on its own. Wha tever

cash flows it generates is what it will invest in t he

business. T-Mobile USA is in a difficult situation . They

do not have sufficient spectrum to make the next te chnology

change, so we're all moving to fourth generation mo bile

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 10 broadband, LTE. To do that requires big blocks of this

spectrum.

So the $9 billion we invested in spectrum a couple of

years ago, that's where we're deploying that techno logy.

T-Mobile doesn't have this spectrum. They have no path to

get to the next wave of technology. In our industr y, if

you miss a technology revolution, you probably don' t do

quite well for the next 5 to 10 years. It is that costly

in our industry to miss the technology wave. They' re in a

situation where they don't have the capacity to get to the

next technology wave.

NORM PEARLSTINE: How important is video going to b e

going forward for smart phones?

RANDALL L. STEPHENSON: It is the next major acute app

for mobile communications. I think it's going to b e very

important for smart phones. We're all probably usi ng video

on smart phones now. It's a good experience. It's not a

great experience. Where I believe video is going t o be

significant is going to be in the tablet environmen t, the

personal computing. So your tablets, your iPads, y our

Android tablets. That's where I believe video is g oing to

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 11 play a really critical role and people will consume a lot

of video.

Video is the greatest driver of these capacity

requirements that we're experiencing. In fact, the re are

periods of time when you look at our mobile broadba nd

network, and Netflix will represent 30% of the tota l

traffic on our network, so video is a huge driver o f

traffic.

NORM PEARLSTINE: Can you regulate that at all with

price to reduce its use, or that's not the game you want to

play?

RANDALL L. STEPHENSON: No. Actually looking at th e

capacity situation that we have, if you go back to midyear

last year, 2010, we made the first in the industry to make

a move on pricing. What we have traditionally done in this

industry with data is we price it like a buffet. I t's

basically $30 and it's all you can eat. As a resul t, you

get a lot of people who consume a significant amoun t of

data and they're effectively being subsidized by pe ople who

don't consume a lot of data.

So we made a move to make our pricing more variable in

nature. If you consume a lot, you pay more. If yo u

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 12 consume a little, you pay very little. That is don e to

make sure that the cost-causer is paying the freigh t, and

also to help begin to influence the behavior of peo ple on

these devices.

What happens when you start to charge people when t hey

consume certain levels of data, these are all WiFi enabled.

We see people suddenly when they get into their hom e or

their office make sure that these are connected to WiFi so

they're not running up big bills on data.

NORM PEARLSTINE: You said if this deal goes throug h,

you would bring back about 5,000 jobs from India to the US.

For what purpose, and why is one contingent upon th e other?

RANDALL L. STEPHENSON: So you look at what has

transpired in our industry over time. A lot of com panies

who have customer care type functions, for cost rea sons a

lot of those jobs have been moved overseas. When w e look

at this particular transaction, you put the two com panies

together and a lot of the synergies come by you're not

going to need as many people doing customer care.

We're in a situation in this country where we looke d

at it and we said, "This is probably not a time to be

rationalizing your cost structure by doing a lot of

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 13 layoffs." A lot of these jobs for care are positio ned

overseas. So we said the commitment, first of all, what we

want to do is get the synergies by the centers that are

offshored, make sure we don't affect US employment.

And as we began to look at it, we said, "If you rea lly

wanted to right-size this care function and take a customer

service level to best in class, you actually would need to

add 5,000 more jobs here in the US." So take the c are in

the overseas down, add 5,000 jobs here. The net ef fect on

US employment would be a growth of 5,000 jobs. So the

transaction gives it the opportunity to take those kinds of

actions.

NORM PEARLSTINE: In what ways are you a leading

indicator for the economy in terms of demand for yo ur

products? Are you completely in a different world, or does

the economy make a difference? You've met in a tim e when

we'll be lucky if we get growth of 2% this year. Y ou're

growing significantly faster than that. Is that a

temporary phenomenon where over time you track the economy,

or do you think that telecom can outperform it -- c ontinue

to going forward?


RANDALL L. STEPHENSON: It's interesting. I’m goin g

to stay focused on the mobility side of the house. We have

a broad portfolio of businesses, a lot of multinati onal

corporations that we do a lot of business with.

NORM PEARLSTINE: Then you have some fixed line --

RANDALL L. STEPHENSON: Fixed line telephone servic e,

and so those kind of have their own dynamics. But if I

could just stay focused on the main driver of our b usiness,

mobility, for a moment -- it's fascinating to consi der what

has happened since 2008. If you think about 2008, we have

gone through, since I have been alive, probably one of the

most difficult economic situations that we've exper ienced

in this country. And significant unemployment, sig nificant

reductions of capital investment in this country, a nd our

particular industry over that timeframe, 2008 throu gh 2011

-- and this will continue into 2012 -- has invested at

record levels throughout the entire timeframe.

In fact, we have invested just in pure capital

expenditures $20 billion per year. We're investing more in

the United States this year and last year than any other

company in the United States. These are record lev els.

That doesn't include the $9 billion that we put out for

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 15 spectrum and acquisitions that we've done to try to augment

capacity.

So here is an industry that during one of the work

economic cycles we've been through in this country has done

nothing but invest and grow. And while we've been

investing and growing and building this infrastruct ure

layer, there has been an entire ecosystem that's be en

investing at a very hyper pace. So think of this d evice.

I mean, Apple. Apple has really grown up and becom e a

major -- the largest company in the world by market cap

over that same time horizon by virtue of this same

infrastructure capability.

Think about Google developing an Android operating

system. That's a phenomenal feat to develop someth ing that

sophisticated in such a short period of time over t he same

time horizon. And now think about the applications and the

application ecosystem that has developed. There is an

entire economy that has been built on top of all of this

throughout this timeframe.

And so is it countercyclical? Yeah, you can say it 's

countercyclical. I believe actually it is serving to prop

up the economy. It will serve as an infrastructure layer

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 16 that will drive this economy I believe the next few years

as much as maybe the combustion engine did back in the

early 1900s. I think it's really that important.

NORM PEARLSTINE: You've had a close and sometimes

complicated relationship with Apple over the years as the

first big carrier to use the iPhone and so forth. Did you

-- did you get involved in direct negotiations with Steve

Jobs while he was alive and running the company? I f so, do

you see changes in the company going forward?

RANDALL L. STEPHENSON: I've had the privilege of

working directly with Steve over that timeframe. I 'm

trying to remember. It was 2005, I believe, when w hat we

owned was a 50% interest in Singular wireless. I w as

chairman of the board of Cingular wireless at the t ime, and

the guy we had running Cingular, Stan Sigman, came in and

said, "We've got this interesting idea. It's a pho ne that

is being developed by Apple," and they tried to des cribe

this. I said, "Well, let me see it." He said, "It doesn't

exist yet." And what exactly is it going to do?

Well, we talked about some of the basic functionali ty,

but the more we talked about it, we were just in th e early

throes of building this third generation mobile bro adband

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 17 network, and the more we talked about it, the more you

began to think about an environment where just in a very

simplistic user interface, you begin to access data on the

internet over one of these devices. We got really, really

excited about it. So we said, "Let's go try to do this."

Well, as you might well guess, Apple -- nothing is

quite like it normally is with Apple. To do this

particular deal required us to fundamentally change our

business model, how we distributed, how we priced. It was

just the whole model for how we deal with handset

manufacturers.

We were so convicted of this that we made a major

shift in our business model to do the deal. To Ste ve Job's

credit, when you become a partner with him, if you take a

risk on him, he'll take a risk on you. So it creat ed a

very unique relationship over that four-year time h orizon.

I like to -- I really believe that scaling this

device, I mean, it put a lot of stress on us and it really

tested our ability to build a mobile network to han dle

these types of volumes. But it's been a very produ ctive

relationship with us. You asked how will it change Apple

with Steve being gone. He has -- I believe he has built

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 18 his DNA into that organization. This is an organiz ation

that is built around innovation. It's built around the

customer experience. They are as focused on the cu stomer

experience as any organization I have ever seen.

Tim Cook is an incredibly gifted executive, so I am of

a mindset that it's going to be -- this is so ingra ined in

their DNA, they're going to be very successful for a long

time.

NORM PEARLSTINE: I was surprised to see that in th e

US we are now selling almost as many smart phones u sing

Android as you are Apples. So you presumably deal pretty

closely with the Google folks as well. How would y ou

compare those two companies? One is much more open -sourced

than the other.

RANDALL L. STEPHENSON: That's really the main

difference, right? I mean, Apple is a controlled u ser

experience. People talk about control like it's a dirty

word, but they're doing it for one purpose. They w ant that

user experience to be unequivocal, right? They wan t it to

be a very unique experience.

The Google experience, they're very much concerned

about the user experience, but it's open and let ot her

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 19 developers come in and develop their own capabiliti es in an

Android environment, and I'll be honest with you. When

they first announced they were going to develop an Android,

I was skeptical.

Developing an OS may sound like an easy thing to do .

It is complex. It is a very difficult thing to do. Many

have tried. Most have failed. It is a tribute to the

Google innovation and technical capabilities to do what

they have done with Android. They're a very impres sive

company.

NORM PEARLSTINE: Do you see their sales overtaking

those of Apple in the near future for you?

RANDALL L. STEPHENSON: Android devices -- oh, in o ur

particular channel?

NORM PEARLSTINE: Yeah.

RANDALL L. STEPHENSON: You know, we have built an

incredible franchise around the Apple products. We have

millions of Apple customers that are very, very loy al.

They do not churn in our industry, meaning they don 't leave

us and go to other carriers. And so it's such a ma jor

franchise that it would take a long time before ano ther OS

overtook Apple in our particular lineup.


That said, and you said it earlier, in the third

quarter we were kind of 50% Apple, 50% non-Apple. And

largely the non-Apple was Android. I mean, it was the

overwhelming majority of the non-Apple. Fourth qua rter,

you saw the numbers we released yesterday. We're j ust

having a blowout holiday season, and that holiday s eason is

being driven by the new iPhone. I suspect that the fourth

quarter, Apple will have a dominant share in our ch annel.

NORM PEARLSTINE: Can you talk a little bit about

global competition, not only in terms of Samsung ve rsus

Apple, but also about the United States and its pos ition

vis-à-vis other countries, especially when it comes to

commitment to digital technology? Are there places that we

ought to be paying attention to that we can learn f rom and

do you see the growth of smart phone utilization in China,

where we're just seeing some extraordinary numbers,

suggestive to the commitment to the technology itse lf in

ways that might create big competition?

RANDALL L. STEPHENSON: I'll start with the US in

terms of where we are in broadband investment and

innovation and being on the edge of the innovation cycle

and mobility and mobile broadband capabilities. Ap ple,

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 21 Google, any of your key application developers, the key

hardware manufacturers, whether it be Cisco, whethe r it be

Alcatel Lucent, Ericsson, Wahway? What is the numb er one

place they work to put in place innovation first? It's

always in the US.

In mobile broadband, the US is by far leading the

charge in terms of mobile broadband technology.

NORM PEARLSTINE: But not in terms of speeds.

RANDALL L. STEPHENSON: So you're going to have som e

places like South Korea where they have better mobi le

broadband speeds. But put this into context, right ? South

Korea, there are 50 million people all in a place a bout the

size of Indiana. So building a mobile broadband ne twork

with great speeds on that type of footprint versus the US

is a very different proposition.

I will also say what is the main input for mobile

broadband and mobile broadband speeds and performan ce? I

go back to its wireless spectrum. And in South Kor ea where

they have done a lot, they're not yet hard going do wn the

path of LTE. That's being led in the US. But what they

have done in South Korea, there are three competito rs in

South Korea. Those competitors have spectrum posit ions

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 22 that are about ten times what the carriers in the U nited

States have, what we have in the United States.

You can't get the performance, the speed and the

throughput in this industry if you don't have the r eally

robust spectrum position. If you're exhausting spe ctrum,

you're just inherently going to be at a disadvantag e. So I

kind of -- south Korea, they've done a great job. I think

their spectrum policy has obviously been very good.

They've freed up a lot of spectrum. They have not been

intimidated by the fact that three/four competitors is

probably a good, healthy marketplace.

What do you see? Their innovation is running on pa r

with the US, a little behind. But they're doing we ll. But

the US is leading the charge, and when you think ab out

going to LTE the next generation, the US is by itse lf.

Now how will this change? I think we're at a place as

a country where we have to recognize that we have d rawn the

focus of innovation. We have drawn the focus of R& D. We

have drawn the focus of the Ciscos, the Alcatel Luc ents and

so forth. But what's happening today, you said it. China.

China Mobile has 500 million subscribers just by th emselves

and China Telecom, the Indians have -- I believe th eir

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 23 latest number, they're well over half a billion

subscribers. I think they're actually closing in o n a

billion.

So if you're the innovation drivers, where are you

going to begin to look in the future? I worry abou t they

begin to look where the volume and the scale is, an d so we

in the US are going to have to, I think, get our ac t

together. We're going to have to make sure that ou r

spectrum policies are right so that we can lead the

innovation curves. Without the spectrum, you're no t going

to be the focus of the innovation and the advanceme nt.

NORM PEARLSTINE: Can you talk a little bit about,

just to come back to the question regarding the reg ulatory

environment here in the US. Do you have a sense th at the

pushback you're seeing to the proposed merger with T-Mobile

is specific to this deal, or is it, in your mind,

symptomatic of a broader change in government attit udes

toward business, either with this administration or

particularly in the space of telecom?

RANDALL L. STEPHENSON: It's probably a broader

sentiment that's reflective of a mindset towards gr eater

regulation and greater oversight. But I really -- I said

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 24 it's never the regulation. It's generally the regu lator.

But then the root cause is probably not the regulat or. I

believe the root cause in our industry -- and I thi nk this

is pervasive throughout the United States -- is we -- our

Congress has been very lazy in terms of how it has

legislated the role of our regulators. You're seei ng this

begin to play itself out dramatically.

Here is a classic example, our particular transacti on.

To gain approval of this transaction, we have to ge t DOJ

approval and we have to get the FCC's approval. Th e FCC's

jurisdiction is established by Congress because the re is a

transfer of the spectrum licenses. What is the bas is for

approving a spectrum transfer? It has to be in the public

interest -- not defined much more than that by Cong ress.

What is Congress's intent in defining the public in terest?

If you're a regulator and you have that broad of a

requirement to establish a licensed transfer, then the

personality of the regulators, the ideals of the

regulators, the ideology of the regulators, the opi nions of

the regulators become very important in a process l ike this

and so you tend to get wild swings based on who is sitting

in particular chairs at any point in time.


My challenge really is one to congress. Congress

needs to be more specific on what their intent is w hen they

write legislation. There is a healthcare bill came out

last year. We still don't know how to implement th e

healthcare bill because the legislation was very br oad. It

wasn't prescriptive. So we have regulators now try ing to

figure out what was the intent. How do we want thi s

implemented? And so most of us industry are sittin g here

waiting and waiting to implement legislation that h as been

passed a year ago. So I just think that it's proba bly

symptomatic of a legislative issue more than it is a

regulatory issue.

NORM PEARLSTINE: Does it reflect in any way a kind of

broad consumer concern, not only about price, but a bout the

whole relationship to the industry, whether it's is sues of

privacy or issues of quality of service, or anythin g else

that suggests just a few of having too much power

concentrated in any one or two companies?

RANDALL L. STEPHENSON: I won't say that it's a fea r

of too much concentration, although some of the FCC 's paper

they put out our deal and the DOJ's complaint talk about

market concentration. But it's -- you read the com plaints

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 26 or you read the FCC's paper and it's interesting be cause

they lay out very specifically that our transaction doesn't

fit the model that they see for the industry.

There is -- it's actually very interesting to see t his

paper that was put out last week because the FCC sa ys in

the paper that absent an independent T-Mobile, T-Mo bile

standing on its own, the cable operators who own a big

block of spectrum, do not have any basis to get int o the

wireless business.

So they said basically the review is T-Mobile and t he

cable guys need to get together and T-Mobile will b e the

basis for the cable industry to get into the wirele ss

business. They put that paper out last week. Lite rally

two days later it's announced that Verizon is buyin g the

spectrum from the cable operators and is offering t he cable

operators their service to sell to their customers. The

cable guys two days later are in the wireless busin ess by

virtue of another operator that was not anticipated by the

FCC.

It's just an indication. This is a dynamic, it's a

fast-changing business. It's a hugely capital-inte nsive

business. The capital reallocates itself very quic kly by

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 27 virtue of deals, by virtue of sales of assets and s o forth,

and a regulator trying to stay ahead of that in an industry

like this, it just cannot anticipate all the change s in an

industry like this.

NORM PEARLSTINE: Talk a little bit about the AT&T of

today and the AT&T you went to work for. That was a

company which in addition to having much more of a New

York/New Jersey focus in terms of headquarters, ins tead of

Dallas, had Bell Labs, had a commitment to pure res earch,

had tremendous power of pricing because it really w as a

regulated monopoly. If we had not broken up AT&T a nd just

left things as they were, would we be in better or worse

shape today, do you think?

RANDALL L. STEPHENSON: Better or worse shape? I

think the industry would be far less dynamic than i t is

today. Think about it. The AT&T that owned that w ireless

spectrum for a long time -- when AT&T was broken up by

Judge Green, the spectrum actually went to the baby Bells.

The baby Bells, in the mid-80s is when they began d eploying

wireless technology. That's when we deployed our f irst

cell tower in Dallas, Texas.


The necessity is the mother of invention. The baby

Bells were looking for new growth opportunities. H ere is

this wireless spectrum, and all of a sudden here co mes

wireless. Then wireless becomes a competitive entr ée

against the traditional voice businesses. I think the

breakup served to actually accelerate the innovatio n cycles

in this country. I think that was all healthy. I think

without the breakup you probably would have gotten here

because the rest of the globe would have gotten her e, but

we wouldn’t have gotten here first, and the US has led the

charge.

NORM PEARLSTINE: If you're going to be able to go

ahead though to continue this consolidation, then

presumably other industries come in and compete wit h you.

Would that be cable or satellite? Where is the com petition

going to come from?

RANDALL L. STEPHENSON: Oh my. The competitive

invariably in this industry comes from places you n ever

anticipated. You know, I'll be honest with you. W hen I

sit and think about competition, I obviously think a lot

about Verizon. I spend a lot of time thinking about those

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 29 guys. I think a lot about Comcast and Time Warner.

They're going head to head with us. But more and m ore --

NORM PEARLSTINE: Is that Time Warner Cable or --

RANDALL L. STEPHENSON: Time Warner Cable. Excuse me.

But more and more of my time and my staff's time an d our

strategic planning is focused on substitution of pr oduct.

It happens so quick in this industry, so think abou t

building these high-speed mobile broadband networks . So

now this becomes a 10-15 meg device.

Well, what happened when you put that kind of

bandwidth in the fixed line environment? New appli cations

came that displaced other products, like voiceover IP.

Voiceover IP will be here. In fact, Microsoft just bought

Skype. Why? They want a voice client to put over these

devices. They don't need to own a device. They do n't need

to own a network. They can sell voice by virtue of Skype

on these devices.

How about Facebook? I mean, Facebook, they have th is

huge base of users and the social network. How abo ut

texting among all those social users? It's just an IP

service. Texting is a major revenue stream for a c ompany

like AT&T. So our view and our focus has become mo re out

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 30 here in these areas. You know, that's the place wh ere

competition is coming from as well.

It's a very dynamic industry. Competition always

comes from the least expected places.

NORM PEARLSTINE: Where as a society are we going t o

get the kind of research that Bell Labs in its prot ected

environment used to be able to provide, or Xerox Pa rc or

other companies that now are much more focused on a pplied?

RANDALL L. STEPHENSON: I would say virtually all o f

us. I'm aware of very few companies that do what I would

call just core, base research, and some of the thin gs that

we used to see come out of Bell Labs. Most of our research

is applied research, application research. How do we apply

technologies, but not just the core science researc h; a lot

of that we drive out of our vendor communities.

LTE, we basically spend a lot of time working with our

vendors on how do we get to the next place of effic iencies

and speed. So what drives that? Spectrum is a lim ited

resource? Why are we going to LTE? Because it's 3 0% more

efficient at utilizing this spectrum.

Now being 30% more efficient means it's 30% faster, so

people are going to consume more of it. But it's o ur

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 31 vendor community and us working together that's dri ving the

research and development for the new capabilities t hat we

see, but just core research. You know, Bell Labs w as one

of the first to identify the big bang. I have read books

in some of our own archives. I have read about thi s and

it's fascinating.

You are not seeing us do a lot of big-bang research in

our labs anymore. It's all applied research.

NORM PEARLSTINE: And who is doing it? Is it at th e

universities?

RANDALL L. STEPHENSON: It's the universities, yeah .

And it's going to have to be --

NORM PEARLSTINE: Or will it be offshore too?

RANDALL L. STEPHENSON: Obviously, you're seeing th at

type of research done in China. But in the US, it tends to

be the academia and then obviously government-spons ored

research is an important part of this.

NORM PEARLSTINE: What have you learned about your

relationship with the consumer since coming into th is job?

You had a lot of issues when the sale of the iPhone took

off in terms of trying to keep up with that demand. You

have been putting 4G into major metro markets. It' s 70

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 32 million homes you have to have it in by the end of the

year. How do you see consumer demands changing, an d how do

you keep up with that?

RANDALL L. STEPHENSON: We talk to our customers a lot

to try to understand how they relate to and think a bout the

technology that we're putting in their hands and in front

of them. As recently as two years ago, when you ta lked to

our customers about this stuff, these devices, thes e

capabilities and so forth, and tablets and smart ph ones,

our customers were a bit overwhelmed. Many of them were a

bit frustrated by the technology. There was an ave rsion.

It was kind of interesting.

That was two years ago and so that was a lot of our

focus. How do we get our customers past that? Lit erally

in two years, we just finished our latest round of focus

groups working with our customers. What our custom ers tell

us now is this is part of me. This is my identity. This

makes my life better. This makes my life simpler. This

makes my life more efficient. It becomes part of h ow I

socialize.

People honestly, they're at a place where they can' t

conceive of not having this technology in their liv es, so

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 33 it's gone in a very short period of time from a pla ce where

it was intimidating and frustrating to a place toda y where

it's indispensable in how they live and work.

NORM PEARLSTINE: Let me just throw one more questi on

to you. Then I would love to get some questions fr om the

audience, if we could. How do you see this technol ogy

impacting some traditional businesses, books, newsp apers,

magazines, for example? With the advent of the tab let, is

that a savoir or is that something that will contin ue to

put pressure on traditional --

RANDALL L. STEPHENSON: It's going to make traditio nal

media -- it's going to make the market far more eff icient,

and I believe what we saw play out in the music ind ustry is

just a glimpse of what you're going to see play out in all

other forms of media. In the music industry, what

happened? People don't buy full CDs or albums anym ore.

They buy what it is they want. So the market has g otten

very efficient. I don't spent $10. I spend $2 on the

music that I want out of that album.

I believe in books, even textbooks, you will see --

and in fact, you're starting to see this now -- pro fessors

who their kids -- their students don't necessarily need an

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 34 entire textbook. They need particular chapters of a

textbook. Well, the market gets so efficient that you'll

be able to actually extract and buy only what you w ant out

of a textbook.

I suspect -- I know what my behavior is. There are

certain editorialists, op-ed writers and journalist s that I

like. I want to read their piece, but I may not wa nt the

entire publication where they print themselves. So it's

going to be a far more efficient market in terms of how

people access your types of media as well.

We're all going to fight it. You know, we all want to

bundle. We want to bundle wireless with fixed line and so

forth. Why? Because our yields are better and it' s a way

you want to do marketing. But just like the custom er is

always trying to get the most efficient access to o ur

technology, this technology is going to facilitate them

getting the most efficient access to your content a s well.

And so I think it's going to change how all of us i nteract

with media and so forth.

NORM PEARLSTINE: We found the tablets a particular ly

good medium for us in terms of migrating print. I' m happy

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 35 to note we received the mobile industry's award for best

app for news and business information today.

RANDALL L. STEPHENSON: I have used it.

NORM PEARLSTINE: I was particularly happy to see

that.

RANDALL L. STEPHENSON: Congratulations.

NORM PEARLSTINE: Do we have some questions that

anyone can bring up for me? Thank you. What are y our

international plans?

RANDALL L. STEPHENSON: I have worked and traveled all

over the world trying to find an entrée to take thi s

platform that we've built in the US and can you lev erage

that outside the US. It's very, very difficult to do, to

acquire assets and do that. But that said, we have a very,

very impressive position with multinational compani es. A

classic example would be IBM where they have their own

needs to deliver data and services all over the glo be.

Asia is really important to them and Europe. They have

huge network requirements.

Well, there aren't many companies who have the scal e

and the breadth that can deliver all of IBM's traff ic

around the globe. We do that. We do it with a lot of

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 36 partnering and so forth, but we have been working v ery

aggressively to give ourselves a unique position to deliver

traffic all over the globe.

We have a partner. We own a significant portion of

American Movil, a massive Pan-Latin American presen ce from

Brazil all the way up through Central America and M exico.

If you're Bloomberg and you need to deliver traffic video

capabilities and so forth down into Latin America, your CIO

won't know whether it's on the AT&T network or anyb ody

else's.

It's on our infrastructure. We're using Latin Amer ica

as a partner to do that. We just did a deal that w e

announced last week with China Telecom where we're doing

the exact same thing into China. We have some sign ificant

and important assets in Europe. So our key interna tional

strategy is IBM, the JPMorgan Chases, the General M otors,

Royal Dutch Shell. They basically just hand us all their

data requirements and we deliver those around the g lobe and

it's a very important business to us. It's growing very

nicely.

NORM PEARLSTINE: From a consumer point of view, yo u

also -- your smart phones or many more of them are capable

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 37 of being used internationally, I think, more than a nyone

else.

RANDALL L. STEPHENSON: It was a -- in the United

States, we all took directions about 2006, I guess, on what

technology platform were you going to go to. We ch ose to

go down a path that's GSM, but it's a technology pl atform

that's utilized in China, all over Asia, all over E urope,

all over Latin America. It was very important to u s for

exactly the reason you just said because we believe over

time, people like probably most of you in this room will be

doing extensive travel outside the US and we want t his

device to work seamlessly wherever you go. So 97% of the

globe, I believe, your phone will work if you're an AT&T

customer.

NORM PEARLSTINE: When will LTE come to New York?

RANDALL L. STEPHENSON: It's here now. It's up and

running today. It's in throughout most of Manhatta n.

We're expanding it and we're going to other borough s and so

forth, but we have turned it up and it's up and liv e in New

York today.

NORM PEARLSTINE: Will the efficiency of the networ k

grow faster than the consumer's aversion to pay?


RANDALL L. STEPHENSON: [LAUGHS] It has so far.

Again, the traffic on these networks in four years is up

8,000%. I can assure you our revenues are not up 8 ,000% on

these networks. So the efficiencies -- basically w hat

happens is that the efficiencies of the new technol ogy,

those are one of the things that allow you to keep prices

in check, and that's one of the reasons T-Mobile is so

important. It's just a big driver of efficiencies

absented, again -- you know, we're just within line of

sight of having to just do one thing and that's beg in to

move price.

NORM PEARLSTINE: With mobile LTE innovation in ful l

swing, what's the next chapter of the innovative cy cle of

AT&T?

RANDALL L. STEPHENSON: I mentioned it briefly a

moment ago. But with LTE, think of just significan t

throughputs. I mean, really high bandwidth capabil ities

with low latency. LTE, what's unique about it is t he

latency. You hit an app and you're live. The app is up

and it's moving and it's going. It's kind of a per vasive,

persistent experience when you're using an app.


Think about that type of capability combined with t he

cloud, where the content is all in an infrastructur e layer

up here, and what that will accommodate. I mean, s uddenly

I become a little more agnostic about device. But whatever

device I am on, whether it's my tablet, whether it' s my

iPhone, my smart phone, whether it's my TV, whether it's my

PC, what is coming and coming quickly is -- and my car.

All of my content, whether it's my music, my contac ts or

whatnot, when I get into my car and it's LTE-enable d, and

it will be, then the music that you have on your iP hone or

on your PC, that music is in your automobile. Your

content, whatever it is that's important to you, yo ur

weather, your maps, whatever it is, that is in your

automobile. It's on your TV. It's pervasively exi stent

wherever you happen to be. That world is not so fa r away

and that world is coming. It's coming very soon.

Begin to think about other applications with these

kind of capabilities. I mean, let your mind wander where

the medical profession goes with these kind of

capabilities. Your records and everything pervasiv ely

available. Think about medical imaging with those kinds of

speeds and emergency medical treatments and so fort h. With

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 40 photography the way it is, you begin to diagnose an d treat

people in a very different way.

The insurance industry is going to radically change .

Think about claims adjustors, whether it be homes o r

whether it be automobiles. I can sit here and go o n and

on, but it is going to fundamentally change busines s. I do

not talk to a single CEO who is not working very

aggressively on how do I change my business model t o

recognize where this is all going. It's going to c hange

everybody's business model. Yours is going to be r adical.

NORM PEARLSTINE: For sure. [LAUGHTER] It's good to

be part of a company with a core terminal whose gro wth is

probably something even you would envy. What type of

consolidation do you foresee with telcos and MSOs? Are

telcos and MSOs dumb pipe companies? [LAUGHTER]

[SIDE B]

RANDALL L. STEPHENSON: You saw it with the

announcement last week of Verizon. The cable compa nies

want into the wireless business. What do they do? They

deliver video. They're bandwidth companies, and so where

is video and bandwidth going? It's going mobile. Every

time we have made prognostications, whether you're in our

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 41 industry or outside of it, in terms of what -- how

applications will go mobile, we always undershoot i t.

I remember this day. It was 1986 doing my first

forecast in a business planning role on what percen tage of

voice traffic would be mobile within a 10-year time

horizon. Internally at our company, we all thought that

forecast is crazy. We missed it by a mile because the

percentage of voice minutes that went mobile in tha t 10

years by far exceeded what the expectations were.

Think about when the first Blackberry came along an d

e-mail went mobile. I mean, mobile e-mail has exce eded

everybody's expectations. The iPhone comes, intern et

capabilities being mobile, it has exceeded everybod y's

expectations. Video will do the same thing. Video on a

mobile environment will exceed what all of us are

anticipating, and so obviously the cable guys have an

interest in being involved and connected to the mob ile

world. That's what the Verizon deal was about, and you're

going to see more of those kind of deals.

The technologies converged. The business models ar e

going to have to change, and you're going to see mo vement.

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 42 Will there be consolidation? I don't know. I susp ect you

will see that at some point. They've tried it.

Cox, one of the best-run cable companies in the Uni ted

States, built a wireless network. They just announ ced

they're shutting it down. I mean, it's hard, right ? They

have their core competencies. Mobile guys have the irs.

But I think you're going to see it done more throug h

partnership than you will through just business

combination.

NORM PEARLSTINE: Speaking of partners, do you see

your company doing more partnering globally? If so , what

part of the world most interests you?

RANDALL L. STEPHENSON: Yes we will. I talked abou t

it already. America Movil, we own a large stake. We're

very close to Carlos Slim and his company down in L atin

America. It's a very tight partnership. That's ho w we

access --

NORM PEARLSTINE: Did that grow out of your time in

Mexico City?

RANDALL L. STEPHENSON: Yes, it did. It's been a

very, very important partnership for both of us. A nd I

just mentioned China. China is hugely important. If I had

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 43 to after Latin America identify the one place that' s most

important to us globally, it is China. Third would be

India. We were the first non-Indian company licens ed to

produce telecom in India. So we have been there ac tive

since 2007. It's a very nice business for us and i t's

growing well.

NORM PEARLSTINE: An LTE iPhone is inevitable. Whe n

that happens, what would you say is the key reason to buy

it from you over Verizon?

RANDALL L. STEPHENSON: This is all going to be in the

new world, the data world. It's going to be from a

customer standpoint a speed and throughput. That's what

will define the experience. We're both going at th is very

aggressively.

I would tell you one of the biggest infrastructure

projects we have today -- and it's been huge for us in 2011

-- is running fiber to our sale sites. So we have this

massive fiber bill, but it's not fiber to the home. It's

fiber to the sell site. And then new technology, E thernet

technology being the access medium to these cell si tes.

Why? Because we're putting all this great bandwidt h out

into the air, the on-air interface so that you can do a ton

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 44 over the air. We can't have the pipe clogged down where

you take it off the cell site and pump it out to th e IP

cloud.

So massive infrastructure investment in fiber and

fiber deployment to these. Also what's really crit ical

will be cell site density in a data world. So the more

dense your cell site grid, the more important and t he more

impressive your data throughputs will be. T-Mobile is

critical to us. We have 50,000 cell sites in the U S. T-

Mobile has 50,000 cell sites. That grid also gives you

capacity but improved performance. So why would yo u buy

AT&T LTE? I hope we get T-Mobile done and it's jus t going

to be a much better data experience.

But that's going to be the contest. That's going t o

be the excitement of the industry. This industry w ill

continue to attract billions and billions of dollar s of

investment because that is the customer differentia tion

point, the customer experience. We're all going to be

investing aggressively to get there.

NORM PEARLSTINE: You have continued AT&T's history

with regard to increasing its dividend. But the qu estion

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 45 we have here is, "Do you anticipate a revenue drop and

consequent dividend cut?"

RANDALL L. STEPHENSON: I do not anticipate a reven ue

drop. We have now -- we have been a public company , what,

27 years going on 28. We have increased our divide nd every

year over that time horizon. So I won't give any

definitive statements for obvious reasons, SEC reas ons, you

know our board actually meets this month to decide on the

dividend.

NORM PEARLSTINE: You can give us a statement here.

We'll get it out for you. [LAUGHTER]

RANDALL L. STEPHENSON: I'll give you this statemen t.

We have increased our dividend every year for the l ast 27

years. We're very proud of that history.

NORM PEARLSTINE: You have been at this now as CEO for

three years, four years?

RANDALL L. STEPHENSON: Yeah. It feels like 15

minutes underwater.

NORM PEARLSTINE: How much longer do you see yourse lf

doing this? Is there something -- anything else th at

excites you, public service, serious fishing? [LAU GHTER]


RANDALL L. STEPHENSON: I would say I would love to

retire and go play golf, but I'm such a bad golfer, it

would be really frustrating. But I love what I do. I love

this industry. I honestly can't fathom going to an

industry -- a different industry because in this pa rticular

industry -- and I tell people that are new in our c ompany

this all the time. You get to deal with everything in a

business environment. As frustrating as the regula tion and

the legal and the legislative environment is, you k now,

it's a very important part of our business. You ha ve to

deal with it.

You have to deal with the largest organized labor

union -- full-time labor union in the United States . So

you get to deal with big labor issues. You get to deal

with technology -- running on technological obsoles cence

curves like I can't fathom. I mean, it is unbeliev able

what's happening to technology and how fast it's ch anging.

Our depreciation schedules, the old bean counter in me

just thinks about this, are literally a fraction of what

they were when I started in this company. You miss one

technological innovation cycle in this industry and you're

dead. You cannot sit still. You have to keep movi ng. You

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 47 have to keep investing. It's just, I think, one of the

most exciting industries you could ever want to wor k in.

I love it. I couldn't imagine doing anything

different for the foreseeable future, but that's up to my

board to decide probably, not for me.

NORM PEARLSTINE: What about, given some of the

frustrations you expressed about Congress, about pu blic

office or going to Washington and doing something t here?

RANDALL L. STEPHENSON: Me personally going to

Washington and doing something about it?

NORM PEARLSTINE: Sure.

RANDALL L. STEPHENSON: I couldn’t fathom me operat ing

in that. The pace that things get done there is ma ddening

to me. That said, I do worry that there are a lot of

people -- I wouldn't say that I'm the most qualifie d, but

there are a lot of people who are inherently qualif ied that

because of the process and the way we do vetting an d so

forth, are averse to going and engaging in it. I d o worry

about that. I hope we can get to a place where peo ple of

prominence and good intellect and good thinkers and big

thinkers would entertain going into public office a nd

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 48 public service. But you see a lot of people runnin g from

it now.

NORM PEARLSTINE: Do you feel the same way about

education? I know your daughter is involved with - -

RANDALL L. STEPHENSON: I think that's the issue of

our times. I worry a lot about education. In fact , AT&T -

- when I took this job, we do a lot of philanthropy . When

I took the job, I grabbed our foundation people and I said,

"Stop. No more grants until we decide where are we going

to focus our philanthropic giving." The biggest is sue we

as a company and we as a country face is the qualit y of

students that are coming out of our education syste m right

now.

You cannot have a situation where 50% of the Africa n

American, Hispanic and Native Americans are droppin g out of

high school. That is a disaster. It's a social un rest

issue. But a company like ours that is so dependen t upon

the US environment for success, if we don't have go od,

skilled workforce, we don't succeed as a company.

All the stuff that I have been talking about here,

investing in broadband and putting fiber to cell si tes and

hanging antenna arrays all over the country, we go hire a

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 49 lot of people to do that. These tend to be more te chnical

jobs. They're not college education requirement jo bs. We

need good high-school educated people. We're inter viewing

11 to find 1 qualified for these jobs right now. T hat's

about the acceptance rate of Harvard, I believe. T hat's

unacceptable.

I just think we as a country are going to have to d eal

with this. We're going to have to get the educatio n system

improved. We're going to have to get kids through high

school; not just through, but with the right skill sets to

succeed.

NORM PEARLSTINE: Meanwhile, we also have immigrati on

policies for PhDs and send an awful lot of them who came us

from overseas home after getting the benefit of tha t

education.

RANDALL L. STEPHENSON: A lot of people -- I mean, I'm

a bit unique in this regard. A lot of people say, "We've

got to get focused on getting engineers through col lege and

people with really good, great scientific capabilit ies

through college." I'm all for that. That's great. It's

really important. But if you fixed your immigratio n

BLOOMBERG BUSINESSWEEK Captains of Industry Randall L. Stephenson, AT&T December 8, 2011 50 policy, you can fix the supply of engineers and tec hnical

talent.

The harder fix, you cannot import enough people to do

the type of work I'm talking about, the vocational work.

Right? Electricians and the people to deploy these

technologies -- that's the harder thing. So that's why we

are so focused on the high school level and getting people

through high school with good, quality educations.

NORM PEARLSTINE: Well Randall, thanks very much fo r

your time and for joining us tonight.

RANDALL L. STEPHENSON: You're very welcome. Thank

you.

NORM PEARLSTINE: We covered a lot of ground, and I

have appreciated your candor and willingness to add ress all

of these questions.

RANDALL L. STEPHENSON: It's been fun. Thanks Norm an.

NORM PEARLSTINE: Thanks very much, and thank you a ll.

[APPLAUSE]

[END]

bloomberg businessweek captains of industry randall l ...€¦ · randall l. stephenson, at&t...

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