Calling it the largest civil penalty every paid to the U.S. Treasury to resolve an FCC investigation, the FCC announced that Straight Path Communication and Verizon Communications have paid about $614 million to settle a spectrum-related investigation.
The announcement came just hours after Verizon, after outbidding AT&T, closed its acquisition of Straight Path, a deal that gives Verizon access to 39-GHz and 28-GHz millimeter wave spectrum that will be used for coming 5G networks.
The probe stems from a January 2017 settlement that Straight Path stuck with the FCC's Enforcement Bureau -- prior to its sale and transfer of licenses to Verizon -- over claims that Straight Path violated the FCC’s buildout and discountenance rules related to about 1,000 licenses in the millimeter weave spectrum bands.
The settlement, the FCC added, required Straight Path to sell its licenses and remit 20% of the overall proceeds of the transaction to the U.S. Treasury.
Verizon and Straight Path inked a deal on May 11, 2017, to transfer the licenses, and on Jan. 18 the FCC’s Wireless Telecommunications Bureau approved the transfer, the agency said.
Under the deal, Verizon agreed to acquire Straight Path for $184 per share, an all-stock deal that represents an enterprise value of about $3.1 billion.
The $614 million is in addition to the $15 million that Straight Path previously paid to the U.S. Treasury, and its earlier relinquishment of 196, or 20%, of its licenses to the FCC that were not included in the Verizon deal.