Partners Cheer AT&T's Deal For Straight Path As Telecom Giant Pushes Toward 5G


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AT&T partners are applauding its pending acquisition of Straight Path Communications, and one executive said the deal could help push the telecom giant toward its goal of providing high-speed broadband for businesses.

Straight Path is an asset company that buys and holds spectrum licenses for 5G networks. AT&T announced Monday it would acquire 735 millimeter wave (mmWave) spectrum licenses in the 39 GHz band and 133 licenses in the 28 GHz band in the deal. These licenses cover the entire United States, including all of the top 40 markets, according to AT&T.

The deal for Straight Path, based in Glen Allen, Va., complements AT&T's acquisition in January of San Francisco-based FiberTower and adds to its holdings of mmWave spectrum, AT&T said in its statement. 

[RELATED: AT&T Spending $1.6B To Scoop Up Spectrum Holder Straight Path]

Spectrum licenses are assets that are not "easily found these days," said Rob Chamblerin, co-founder and executive vice president of DataXoom, an AT&T partner based in Berkeley, Calif. "I think it's all good news from a partner perspective."

Millimeter wave spectrum allows for high-bandwidth transmissions, making it ideal to carry high-definition video and streaming media. Several companies have been interested in the technology of late. Last year, for instance, Facebook said it achieved a broadband transmission of 20 Gbps that reached more than eight miles using the mmWave.

Rickie Richey, CEO of Altaworx, an AT&T partner based in Fairhope, Ala., called the acquisition of Straight Path "kind of exciting," noting that his company has "invested a lot" in AT&T's wireless and Internet of Things offerings.

"The faster they get their 5G out and get their testing done, the faster they’ll be able to deliver broadband," Richey told CRN. He called the deal "good for everybody."

AT&T said in its statement that the all-stock deal would accelerate the delivery of new experiences for consumers and businesses, such as virtual and augmented reality, telemedicine, autonomous cars and smart cities.

"This transaction gives us enough spectrum at this time to pursue our 5G strategy," AT&T said in a document filed Monday with the Securities and Exchange Commission (SEC).

The transaction is also subject to review by the Federal Communications Commission (FCC), yet the two companies expect to close the deal within 12 months, according to the AT&T statement.

In January, the FCC slapped Straight Path with a fine of over $100 million to resolve an investigation of what the commission said was the company's failure to deploy wireless services as required under its FCC spectrum licenses. The case involved about 1,000 licenses in the 39 GHz and Local Multipoint Distribution Service GHz bands, "high frequency" bands that the FCC identified as "extremely valuable" for use in 5G. 

As part of the settlement, Straight Path agreed to surrender 196 of its 39GHz licenses to the FCC, sell the rest of its license portfolio, and pay 20 percent of the proceeds of that sale to the government, according to an FCC statement.

In a document it filed with the SEC on Monday, AT&T said 20 percent of the purchase price will be redirected by Straight Path stockholders to the FCC to help pay that settlement. AT&T also said the deal does not include the 196 licenses that Straight Path surrendered to the government.

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