Verizon announced today that it is acquiring Straight Path Communications, a major holder of 5G spectrum licenses, for $3.1 billion. That’s a little unexpected, because AT&T announced last month that it was acquiring Straight Path for $1.25 billion.

Either 5G spectrum became a lot more valuable in the last 30 days, or AT&T and Verizon just played each other.

As it transpires, Verizon and AT&T have spent the last month bidding against each other for the right to acquire Straight Path. AT&T opened with the initial $1.25 billion bid, and was all set to walk off into the sunset until Verizon made a counter-offer. The two companies have been engaged in a bidding war for the last month, and it appears that Verizon has finally won.

Why does everyone want to buy Straight Path, a company you’ve almost definitely never heard of? It all has to do with spectrum licenses that Straight Path holds to millimeter-wave spectrum. Those give it the right to use high-band spectrum for telecommunications, most likely as part of some future 5G network.

Millimeter-wave spectrum works over much shorter distances than the spectrum currently used for mobile networks, but also has a far higher data capacity. Verizon and AT&T are both rumored to be interested in using millimeter-wave bands to deliver internet to homes. It’s a much cheaper and more attractive way of getting gigabit speeds to houses, compared to the current norm of digging up roads to bury expensive fiber-optic cable.

Straight Path has owned licenses to much of the millimeter-wave spectrum in the country for over a decade, but it’s never managed to get the capital to do anything with it. Now that those spectrum licenses belong to Verizon, which has a keen interest in 5G, we might finally see something done with them.

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