AT&T said it will spend $1.6 billion to acquire Straight Path Communications in an all-stock deal aimed at bulking up the carrier’s portfolio of millimeter wave spectrum.

Straight Path shareholders will receive $1.25 billion, or $95.63 per share, to be paid in AT&T stock. The transaction has a total value of $1.6 billion including penalties Straight Path owes the FCC.

“The merger of AT&T and Straight Path Communications marks a vital point for us,” Straight Path CEO Davidi Jonas said in a prepared statement (PDF). “Importantly, this merger provides Straight Path shareholders with a compelling return since Straight Path’s spin-off to become an independent public company in 2013, with an initial price per share of $6.40 on July 31, 2013.”

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Straight Path earlier this year reached a $100 million settlement with the FCC, ending an investigation into the company’s failure to deploy wireless services as required under FCC spectrum licensing rules.

The FCC commenced its investigation after an anonymous source in November 2015 alleged that Straight Path obtained renewal of its 39 GHz band licenses from the FCC by submitting filings incorrectly claiming that it had constructed systems that were never built. Straight Path launched an internal investigation itself and concluded in July 2016 that equipment had been deployed for only a short time and that no gear was present at the time of the investigation.

Under the settlement, Straight Path will pay two civil penalties and surrender about 20% of its 5G licenses to the FCC. For the $100 million civil penalty, Straight Path will pay $15 million upfront with $85 million suspended unless Straight Path sells all its remaining licenses or surrenders them to the FCC within 12 months. Also, 20% of any sale proceeds must be paid to the Treasury as an additional civil penalty.

Post-settlement, Straight Path holds an average of 620 MHz in the top 30 U.S. markets and covers the entire nation with 39 GHz spectrum, and it has retained all its 28 GHz spectrum licenses. Straight Path had long been expected to sell its licenses to a wireless or cable network operator.