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Verizon has outbid AT&T to buy spectrum-holding company Straight Path Communications for $3.1 billion after “an unusually intense bidding war” between the top two wireless carriers in the US, The Wall Street Journal reported today.
AT&T announced its own $1.6 billion acquisition of the company on April 10, saying that Straight Path “holds a nationwide portfolio of millimeter-wave (mmWave) spectrum, including 39GHz and 28GHz licenses,” and that this spectrum will support development of AT&T’s 5G wireless network. Straight Path’s 735 licenses in the 39GHz band and 133 licenses in the 28GHz band “cover the entire United States, including all of the top 40 markets,” AT&T said last month.announced the acquisition minutes after this story published, saying the deal will close within nine months, pending FCC review. “Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G,” Verizon said.
Straight Path, which had only nine employees as of October, “acquired most of its wireless spectrum more than 15 years ago but was penalized this year by regulators for failing to build a working network,” the Journal wrote.
4G LTE is still the dominant cellular technology in the US, making extensive use of low-band frequencies below 1GHz. The low-band spectrum is highly desirable because of its usefulness in covering long distances and penetrating obstacles such as building walls. But there’s only so much low-band spectrum to go around, and carriers and regulators are turning to higher-frequency bands for new 5G networks that are supposed to dramatically increase data speeds.
The Federal Communications Commission in October 2015 proposed new rules to help carriers use the 28GHz, 39GHz and other high-frequency bands to deliver multi-gigabit speeds at extremely low latencies. International 5G standards are being finalized this year, and carriers are starting to promise 5G networks, but the transition from 4G to 5G will take a few years.
Networks using high frequencies like those owned by Straight Path will have to be designed differently than ones using low-frequency spectrum. Nokia has recommended increased use of small cells, including some indoors, and “very large antenna arrays [that] can be used to effectively compensate for the higher path loss at higher frequency bands.”
But 5G standards can be used in any frequency, both low and high, as T-Mobile USA recently noted. “T-Mobile expects to deploy 5G in its low-band 600MHz spectrum quickly across its existing nationwide macro network, in contrast with the carriers’ millimeter wave spectrum plans, which would require a number of small cells so massive that providing broad coverage would be impossible,” T-Mobile said.