## AT&T to acquire Straight Path in $1.6B deal to support development of 5G technologies ##### 11 April 2017 AT&T plans to acquire Straight Path Communications in an all-stock merger intended to qualify as a tax-free reorganization. The transaction has a total value of$1.6 billion which includes liabilities and amounts to be remitted to the FCC per the terms of Straight Path’s January 2017 consent decree. Straight Path shareholders will receive $1.25 billion ($95.63 per share), which will be paid using AT&T stock.

Straight Path is one of the largest holders of 28 GHz and 39 GHz millimeter wave spectrum. The transaction, which was approved by the Board of Directors of both companies, complements AT&T’s January acquisition of FiberTower and augments the company’s holdings of mmWave spectrum. The acquisition will support AT&T’s development of 5G, which will accelerate the delivery of new experiences for consumers and businesses such as virtual and augmented reality, telemedicine, autonomous cars, smart cities and more.

 Straight path spectrum maps: 39 GHz (top) and 28 GHz (bottom). Click to enlarge.

In January, Straight Path announced a comprehensive settlement with the Federal Communications Commission (FCC) related to the company’s wireless spectrum licenses. As part of the agreement, the FCC terminated its investigation of Straight Path, enabling Straight Path to move forward with the vast majority of its nationwide 39 GHz spectrum fully intact, and its 28 GHz spectrum unchanged.

Both of these spectrum bands, 28 and 39 GHz, were the recent beneficiaries of a significant rule change instituted in July 2016 by the FCC’s Spectrum Frontiers Report & Order. The change allows these bands to be used for mobile wireless and is central to the industry-wide push to 5G, in order to provide higher speeds to hundreds of millions of consumers and businesses throughout the US.

Unlike 4G, 5G technology relies on uncongested spectrum bands such as 28 GHz and 39 GHz that are free of interference. Compared to today’s 4G networks, 5G could allow wireless carriers to deliver data to users at speeds 10 times as fast, and with only 1 millisecond of delay. The International Telecommunications Union has said theoretical peak speeds for standards-based 5G in the mmWave band can eventually reach up to 10 Gbps in the uplink and up to 20 Gbps in the downlink.

Straight Path Communications has been a leader in championing the use of these bands to unlock the potential of 5G technology. The company is a contributing member of ATIS 3GPP, the leading standard-setting body for 5G, and worked closely with the FCC to help adopt “Spectrum Frontiers” rules that open up new spectrum bands, including 28 GHz and 39 GHz, for flexible mobile and fixed-use wireless broadband.

In October 2016, AT&T and Ericsson conducted the first known demonstration of 5G technology, illustrating the possibilities of mmWave radio access technology for the networks of the future. In February 2017, AT&T and Nokia reached a critical milestone, delivering DIRECTV NOW over a fixed wireless 5G connection using 39 GHZ mmWave technology.

AT&T will acquire 735 mmWave licenses in the 39 GHz band and 133 licenses in the 28 GHz band. These licenses cover the entire United States, including all of the top 40 markets.

The transaction is subject to FCC review, and the two companies expect to close within 12 months.