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.

Chris Mills has loved tinkering with technology ever since he worked out how to defeat the parental controls on his parents' internet. He's blogged his way through Apple events and SpaceX launches ever since, and still keeps a bizarre fondness for the Palm Pre.