"I have confidence the 'fiscal cliff' will be dealt with," the AT&T executive said. "It's required, it's not one of these issues that's a matter of choice."
That hasn't stopped companies from pulling back. "We definitely saw the reins get pulled in in business in May," Stephenson said. "People are concerned about the sequester, they're very concerned about where tax rates are going so they've stopped hiring and they've stopped investing." (Read More: Fitch: No Fiscal Honeymoon for President Obama.)
But once the so-called fiscal cliff gets sorted out, the county has "wonderful upside," he said.
"If we could get this fiscal situation addressed, get a tax code that is more modern and competitive with the rest of the world, I think that with what's happening with energy in this country and what people are prepared to invest in technology I think we ride a wave in this country for three or four years that's going to be very exciting," Stephenson said.
On Wednesday, AT&T announced plans to increase investment by as much as 16 percent to $22 billion a year for the next three years to upgrade its mobile and broadband infrastructure as it continues to compete hard with Verizon Communications and Sprint Nextel. (Read More: Softbank to Buy 70 Percent Stake in Sprint.)
"We happen to believe mobile broadband and fixed broadband have been the core underlying drivers of what you've seen in Silicon Valley mobile applications and the whole dynamic around smartphones," Stephenson told CNBC.
AT&T also squashed concerns about the costs of Apple iPhone subsidies.
"Before the smartphone revolution took off we were a 33 percent margin company, and data revenues were nascent," Stephenson noted. "Five years later we're 40 percent margin business, our data revenue is a $26 billion business and it's still growing 20 percent year over year."