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In high-speed 5G wireless bid, AT&T buys Straight Path for $1.6B

With an eye toward next-generation 5G wireless cellular connectivity, networking giant AT&T on Monday announced it will purchase Straight Path Communications for $1.6 billion.

The U.S. Federal Communications Commission has approved 28 and 39 gigahertz frequencies for 5G wireless use, and Straight Path is one of the largest holders of that spectrum.

The purchase could give AT&T, which was the original exclusive partner for Apple's iPhone, a leg up on its wireless competitors —  chiefly Verizon, T-Mobile and Sprint.

Straight Path was motivated to sell after a settlement with the FCC earlier this year. According to Bloomberg, the company misrepresented the progress of utilizing the spectrum it owned, and as a result agreed to transfer its spectrum licenses by early next year.

AT&T and its competitors are gearing up to launch fifth-generation networks in the U.S. in the coming years. 5G aims to be the successor to the current 4G LTE standard, and it's likely that future iPhones will include 5G connectivity once the networks are established and appropriate wireless chips are available.

AT&T expects its 5G network to provide speeds between 10 and 100 times faster than an average LTE connection, measuring bandwidth in gigabits rather than megabits. Latency could be as low as 1 to 5 milliseconds.