The ensuing uncertainty surrounding the status of its wireless licenses has negatively affected the company’s stock price which went from a high of $49.72 in October to a closing at $20.36 on Tuesday (NYSE:STRP).
SPC assured the FCC in license renewal filings in 2011 and 2012, that it was providing service over designated wireless frequencies with transmitters in authorized locations nationwide, often on hotel roofs, reports Bloomberg. But then, someone anonymously questioned whether the equipment was really located where it was authorized.
Straight Path conducted an investigation and found no equipment at the site. A company spokesman told Bloomberg it appears the equipment was in place for a short time, and then removed.
That’s when the FCC got involved. The company is now at risk of losing some or all of its 800 wireless spectrum licenses, according to the account.
Odeon Capital Group LLC analyst Jason Bernstein tells Bloomberg, “Now that there’s a cloud hanging over the company, what’s going to happen to the spectrum?”
Noting that the Commission could impose a range of penalties such as a fine or additional requirements for the licenses, Bernstein adds “anything short of revocation is going to be a big win.”
The company did have a recent victory at the FCC, which voted in July to let Straight Path’s 39 GHz spectrum holdings carry wireless traffic.