Verizon will pay $3.1 billion for wireless spectrum holder Straight Path Communications, it confirmed today, giving it access to the kind of frequencies it could build a 5G network around. The communications giant beat out rival AT&T, The Wall Street Journal says, which had offered to buy Straight Path for $1.6 billion in stock.
The news that AT&T was aiming to buy the Glen Allen, VA-based Straight Path was first reported last month, prompting a bidding war between the carriers that the WSJ describes as “unusually intense.” Straight Path’s purchase gives Verizon access to millimeter wave frequencies that are set to be used by 5G networks across the United States, making it a useful purchase from the start. Experts have also noted that the company’s owner may also be afforded even more spectrum in future auctions with the FCC, potentially giving Verizon access to the entire 39GHz band down the line.
Straight Path Communications secured a significant chunk of its wireless spectrum more than 15 years ago, but still only had nine employees as of October last year, having failed to build a working network off the back of its access. The FCC fined Straight Path for its inaction while sitting on the valuable spectrum, hitting with a $100 million fine that would be reduced to $15 million (plus 20 percent from sales of licenses) if the company could find a buyer.