Bankruptcy overhang lifted from AT&T’s FiberTower purchase

A bankruptcy court declined to review FiberTower’s reorganization, an action that appears to remove one of the last overhangs on AT&T’s already-closed purchase of most of the company’s spectrum licenses.

Last week, the U.S. Bankruptcy Court of the Northern District of Texas ruled that FiberTower’s “Chapter 11 Case has been fully administered; and the Court having determined that the relief sought in the Application is in the best interests of the Reorganized Debtor and all parties in interest.” The full filing is available at the end of this article.

The ruling is noteworthy considering some FiberTower shareholders were urging the court to reconsider AT&T’s purchase of FiberTower, claiming that the deal unfairly assigned a value of $0.00 to hundreds of FiberTower spectrum licenses.

The issue appears to bring to a close FiberTower’s long bankruptcy journey. The company initially filed for bankruptcy in 2012, and early last year AT&T revealed that it entered an agreement to acquire FiberTower in one sentence at the bottom of a press release about a largely unrelated technology. Earlier this year, AT&T said it paid just $207 million to complete its acquisition of FiberTower.

However, the full details of AT&T’s purchase of FiberTower have not yet been made public, and therefore AT&T’s final price tag for FiberTower’s licenses may change. Indeed, one legislator estimated earlier this year that AT&T paid roughly $2 billion for the FiberTower licenses, based on the price Verizon paid for Straight Path’s licenses.

An AT&T spokesperson acknowledged that the bankruptcy court closed the case last week, but said the action was not a prerequisite for AT&T’s completion of the acquisition of FiberTower in February.

Nonetheless, the bankruptcy court’s ruling removes yet another overhang on AT&T’s purchase of FiberTower. That’s noteworthy considering Verizon too removed an obstacle to its own purchase of Straight Path’s spectrum licenses. Earlier this month, the FCC’s Wireless Telecommunications Bureau announced it will not stand in the way of Straight Path’s millimeter wave (mmWave) license transfer to Verizon, denying a request from the Competitive Carriers Association (CCA) to stay a Jan. 18 order approving the transfer. The bureau said CCA failed to meet its burden for a “grant of an extraordinary remedy” of a stay.

The CCA and others have raised concerns over Verizon’s Straight Path deal and AT&T’s FiberTower deal in part due to concerns that the transactions would put much of the nation’s available mmWave spectrum licenses in the hands of just two of the nation’s largest wireless operators. CCA and others have also argued that the FCC didn’t follow proper procedure in evaluating and approving the transactions.

AT&T’s purchase of FiberTower’s mmWave spectrum licenses, and Verizon’s purchase of Straight Path’s spectrum licenses, are key elements of the nation’s overall move to 5G network technology. Indeed, that technology was initially designed in part to support superfast transmissions in high-band spectrum. Moreover, demand among wireless operators for such mmWave spectrum appears to be growing, considering the FCC recently announced it's moving forward with a plan to auction 28 GHz mmWave spectrum as early as November.