Straight Path Fined $100M to End FCC 5G Probe (Part One)

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straight-path-logoStraight Path Communications got socked with a $100M+ fine from the FCC for not actually deploying wireless services as required using its Commission licenses, yet allegedly saying it did. The penalty is part of a settlement reached with the Enforcement Bureau to end the investigation.

The Enforcement Bureau looked into allegations that Straight Path violated the Commission’s buildout and discontinuance rules in connection with about 1,000 licenses in the 39 GHz and Local Multipoint Distribution Service GHz spectrum bands, which are used to deploy 5G wireless services. To settle the probe, Straight Path will pay the U.S. Treasury a $100 million civil penalty, surrender to the Commission 196 of its licenses in the 39 GHz spectrum band, sell the remainder of that license portfolio, and remit 20 percent of the proceeds of that sale to the Treasury as an additional civil penalty.  

In November 2015, someone using the pseudonym “Sinclair Upton” published a report alleging that Straight Path obtained FCC renewal of its 39 GHz band licenses by  submitting filings claiming that the company built systems. But according to an internal investigation Straight Path conducted in 2016, that wasn’t true, says the Commission. The equipment had been deployed only for a short time at the original transmitter locations, and was missing from “most of the relevant locations,” according to the FCC. 

Spectrum squatting is a huge no-no for the FCC. The agency requires license holders to use their licensed spectrum and verify that use. “Wireless spectrum is a scarce public resource,” said FCC Enforcement Bureau Chief Travis LeBlanc. “We expect every person or company that receives a spectrum license to put it to productive use.”

For the $100 million civil penalty, Straight Path will pay $15 million upfront. As an incentive to sell or surrender the rest of its 39 GHz licenses within 12 months, $85 million will be forgiven. (Of course, that amount will be reinstated if these actions do not happen within that time.)

The company agreed to surrender 196 licenses (out of 868) by January 18, according to the FCC. The company has licenses to operate on the 28 GHz and 39 GHz bands of the fixed microwave services.

To see part 2 of this story click here.

January 13, 2017

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