Washington's gridlock is the key concern keeping CEOs from increasing capital spending, AT&T chief Randall Stephenson told CNBC on Wednesday.
"When you have uncertainty in an environment where you're investing billions of dollars of capital, that can do nothing but have a suppressive effect," said the AT&T CEO and chairman of the Business Roundtable, an association of CEOs that represent companies with $7.4 trillion in annual revenues.
The Obama administration and Congress must prioritize reforming the tax code, and the Federal Communications Commission needs to finalize net neutrality rules in order to boost investments and drive the economy, Stephenson said on CNBC's "Squawk Box."
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Until then, AT&T and many other companies may pull back from investments. CEOs' economic outlook fell moderately for the fourth quarter, with declines concentrated in capital spending. "I hope that's not a permanent cessation of investment. Let's understand what the rules are because these are multibillion dollar investments."
"There is general agreement [among government leaders] that our tax code is now uncompetitive. We are the highest tax rate among the OECD countries, and if we want to move the economic growth rate further, we have to change the tax code," he said.
Stephenson expects President Barack Obama to have priorities similar to those of the Roundtable CEOs. "It's going to be interesting to see with a new Congress and the president if something can happen here," he added.
The Roundtable's quarterly CEO Economic Outlook Survey also found that CEOs expect gross domestic product in 2015 to grow 2.4 percent.
"I think all of us as CEOs tend to be conservative when we put plans together, but we are looking at something that's close to 2.4 percent. ... I mean that's actually good relative to the rest of the world," Stephenson said. "We're all apprehensive about doing high-five and declaring victory here when so much more is possible."
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Stephenson, who has been CEO since 2007, said Obama's suggestions on net neutrality rules are outdated and inappropriate.
"What has created the noise and problem is the president … wants to put the Internet into regulation that was written in 1934. These regulations were written for the black rotary dial."
He hopes the Federal Communications Commission will flesh out the rules for the Internet carefully to avoid years of litigation.
"Here is the Internet, which is a phenomenon by any definition. Multiple billions of dollars are being poured into this ecosystem into the technology. So there is some concern about how the Internet will be treated in the future," Stephenson said.