WASHINGTON (Reuters) - Verizon Communications Inc (VZ.N) and its Straight Path Communications Inc unit paid a $614 million civil penalty as part of a January 2017 settlement with the U.S. Federal Communications Commission, the agency said on Wednesday.
The telecommunications regulator said the settlement resolved an investigation into allegations that Straight Path failed to use the spectrum it was awarded, and in doing so violated the FCC’s rules in connection with approximately 1,000 licenses.
The settlement required Straight Path to sell those licenses and remit 20 percent of the overall proceeds. Verizon said on Wednesday it had completed its $3.1 billion acquisition of the company it announced in May 2017. The settlement represents the largest civil penalty paid to resolve an FCC investigation.
A Verizon spokesman declined to comment. The settlement resolved conduct from before Verizon’s announced acquisition.
The sales proceeds does not include a separate $15 million penalty that Straight Path paid to the FCC in January 2017.
The licenses are important to emerging 5G technology that will allow for much faster wireless networks and could usher in advances like remote surgical procedures and self-driving vehicles.
The FCC said in January 2017 that Straight Path was “squatting on spectrum licenses” and that was “fundamentally inconsistent with the public good.” The FCC probe was prompted by allegations of fraud in November 2015 by an anonymous short seller of the company’s stock, Reuters reported earlier.
Verizon outbid AT&T Inc (T.N), which made a bid to buy Straight Path in April 2017 valued at $1.6 billion. With the completion of Verizon’s acquisition of Straight Path, the company’s shares were delisted from the New York Stock Exchange on Wednesday.
Reporting by David Shepardson; editing by Grant McCool