Cellular spectrum has really become a game of musical chairs in recent years as the Internet of Things expands and companies jockey for control of the airwaves that will help connect the IoT. Indeed, AT&T (News - Alert) has announced two acquisitions in just the space of a few month in an effort to provide the cellular service provider with more spectrum to enable the next iteration of cellular networking: 5G.
A week ago today AT&T announced plans to buy Straight Path Communications for $1.6 billion. That follows by just a few months news that it purchased FiberTower (News - Alert) Corp.
The Straight Path Communications deal, which is expected to close within 12 months, will give AT&T 735 millimeter wave licenses in the 39 gigaHertz band and 133 licenses in the 28 gigaHertz band. These licenses cover the U.S., including all of the nation’s top 40 markets.
According to Bloomberg Intelligence, Straight Path Communications is the third largest holder of 28 gigaHertz spectrum. Bloomberg says Verizon (News - Alert) is the largest, with a nearly 200 billion megahertz POP; next is T-Mobile, with a 97.4 billion megahertz POP, and Straight Path Communications comes in at No. 3, possessing a 39.7 billion megahertz POP.
IDT Corp. (News - Alert) bought the spectrum from wireless service provider now-defunct Winstar Communications Inc. in 2001. Twelve years later IDT spun off the company now known as Straight Path and the spectrum holdings.
But Straight Path Communications recently got into trouble with the Federal Communications Commission for “squatting on spectrum licenses without any meaningful effort to put them to good use in a timely manner,” as Travis LeBlanc, the chief of the FCC’s (News - Alert) Enforcement Bureau, described it.
The FCC bureau in January fined Straight Path Communications $100 million to settle the case. That included an upfront payment of $15 million. But that’s just the tip of the iceberg.
The commission also is requiring Straight Path Communications to transfer its 28 and 39GHz spectrum licenses by January 2018 and give it 20 percent of the proceeds from the sale. If it doesn’t, the FCC said, Straight Path Communications will have to pay an addition $85 million and return its spectrum to the FCC.
That created a great opening for AT&T, which has been amassing spectrum to better compete with other wireless service providers in the future. AT&T in January bought FiberTower Corp., a Dallas company with 24 and 39GHz licenses.
Edited by Alicia Young