AT&T's bid to acquire Straight Path Communications, Inc. and all the spectrum that they hold has just been soured by Verizon, who outbid them with a massive $1.8 billion bid. AT&T had previously laid $1.6 billion on the line and hoped to acquire Straight Path outright, but Verizon had made mention of being interested in possibly buying out the communications firm. With that interest now materializing in the form of a higher bid, stock prices for Straight Path are on the upswing, and neither analysts nor any companies involved have said whether that could affect the deal. All of the companies involved declined to comment on the matter at this time. AT&T has until next week to submit some sort of response, whether they choose to counter-bid, concede, or find a way to stall for time.
Straight Path controls a huge amount of spectrum, mostly in the 28GHz and 39GHz areas, but serves as an asset holding company, rather than actually doing anything with the spectrum themselves. Thinking long-term, Straight Path has built up a large portfolio of spectrum that could be useful for 5G. To be precise, they've scored 868 different FCC licenses that provide spectrum access in different areas all across the United States. While most other players are all spent out from the recently closed FCC incentive auction, AT&T sat out the auction and decided to jump on Straight Path instead. While AT&T could have simply bought or leased Straight Path's spectrum directly from them, buying up the company themselves not only gives them access to their assets and spectrum holdings, but could be helpful in building their spectrum portfolio in the future. The company was attractive to Verizon for all the same reasons, as they proved with their bid.
Whoever wins Straight Path will be at a decent advantage when it comes to building out a 5G network, especially when using small cells. The spectrum on offer at the FCC's incentive auction was all in and around the 600MHz block, low-frequency spectrum that could travel long distances and pierce buildings and the ground effectively. High-frequency spectrum, like what Straight Path has, is uniquely suited to uses in small cells, fixed wireless, and even 5G base stations, because while its reach and penetration leave something to be desired, the sheer speed and low latency put low-frequency spectrum to shame.