Verizon, Straight Path pay record $614m FCC fine

02 March 2018 | Jason Mcgee-Abe

Verizon Communications and its newly-incorporated Straight Path wireless unit have paid the largest civil penalty ever to the US Treasury to resolve a Commission investigation.

FCC 160x186The $614.3 million penalty, the largest of its kind with the agency, came after the Federal Communications Commission (FCC) alleged that Straight Path Communications failed to use spectrum it was awarded before the Verizon acquisition.

“The settlement resolved an investigation into allegations that Straight Path failed to use the spectrum it was awarded, and thus violated the Commission’s buildout and discontinuance rules in connection with approximately 1,000 licences in certain millimetre wave spectrum bands” an FCC statement read.

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“These high frequency bands have been identified by the Commission for use in the next generation evolution of wireless technology or 5G.”

It was announced in May 2017 that Verizon had succeeded in buying Straight Path Communications, a US company with millimetre wave spectrum, in particular 28GHz and 39GHz, suitable for 5G, after a bidding war with AT&T who had previously announced a definitive agreement. Verizon agreed to pay AT&T $38 million for the privilege of beating it in an auction.

Hans VestbergAt the time, Hans Vestberg, executive vice president and president of global network and technology at Verizon, said: "Verizon now has all of the pieces in place to quickly accelerate the deployment of 5G. Combined with our recent transactions with Corning Incorporated, XO Communications, and Prysmian Group, this is another step to build the next-generation network for our customers."

The penalty is part of a January 2017 FCC settlement, formally known as a Consent Decree, that Straight Path entered into with the Commission’s Enforcement Bureau, prior to the sale and transfer of its licences to Verizon. The settlement required Straight Path to sell its licences and remit 20% of the overall proceeds of the transaction to the US Treasury.

Verizon and Straight Path entered into an agreement on May 11, 2017 to transfer the licences, and on January 18, 2018, the Commission’s Wireless Telecommunications Bureau approved the transfer.

The payment is in addition to $15 million that Straight Path previously paid to the US Treasury, and its earlier relinquishment of 196 —approximately 20%—of its licences to the Commission that were not included in its transaction with Verizon.

The transfer of control order is available here.

Capacity Feb/Mar Issue

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Topics: Verizon, Straight Path, FCC, US, Treasury, fine, wireless, 5G