Straight Path settles with FCC over licenses
Reuters
Published Jan 12, 2017 06:58AM ET
Straight Path settles with FCC over licenses
By Liana B. Baker
SAN FRANCISCO (Reuters) - Straight Path Communications Inc (A:STRP), a holder of licenses to wireless spectrum, said it has settled with the U.S. Federal Communications Commission, resolving an investigation into the company.
As part of the settlement, Straight Path will pay $15 million to the FCC and give the regulator a 20 percent cut of any sale of its spectrum licenses, the company said in a statement on Thursday.
The FCC had made inquiries into Straight Path's former parent company IDT Corp (N:IDT) and its spectrum licenses following allegations of fraud that were made against the company by an anonymous shortseller.
Straight Path's main asset is its licenses for airwaves that could be used by wireless operators in emerging 5G technology. Wireless providers such as AT&T Inc (N:T) and Verizon Communications Inc (N:VZ) are hungry for airwaves to help them expand their networks.
In July 2016, the FCC made a rule change that allowed for the 28GHz and 39GHz bands, a major part of Straight Path's spectrum holdings, to be used in mobile communications.
Straight Path is also hiring investment bank Evercore Partners Inc (N:EVR) to help the company explore strategic alternatives.
As part of the consent decree, if Straight Path does not announce the sale of its spectrum licenses in the next 12 months, it will have to pay the FCC $85 million or return its licenses.
"We are pleased that we were able to achieve a comprehensive settlement with the FCC, which allows us to move forward," Chief Executive Davidi Jonas said in the statement.
The settlement may put an end to some of the uncertainty surrounding the company, whose stock seesawed in late 2015 from $50 to less than $8. Besides the anonymous shortseller, it had also been targeted by New York-based Kerrisdale, a $400 million hedge fund that shorts stocks publicly.
Shares in Straight Path closed 5.6 percent lower at $31.41 per share on Wednesday.
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Written By: Reuters
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