Comment 18 for bug 1588637

I had the same issue as reported here. I noticed at boot that the driver was failing to load its primary firmware choice, falling back to a different version:

[ 3.538299] iwlwifi 0000:04:00.0: Direct firmware load for iwlwifi-7260-17.ucode failed with error -2
[ 3.541299] iwlwifi 0000:04:00.0: loaded firmware version 16.242414.0 op_mode iwlmvm

I checked /lib/firmware and the highest version I had there was iwlwifi-7260-16.ucode, which corresponds to 16.242414.0 in the logs above. I decided to rename iwlwifi-7260-16.ucode to prevent it from being loaded, as this would allow the driver to fall back onto the next best firmware file, iwlwifi-7260-13.ucode. This didn't help.

To fix this problem I looked at https://wireless.wiki.kernel.org/en/users/drivers/iwlwifi#firmware and downloaded iwlwifi-7260-17.ucode (via git) and copied it into /lib/firmware, then rebooted. I haven't had any issue since applying this fix, where previously I'd be getting a firmware crash once every 15-30 minutes.

This new firmware file is not present in linux-firmware 1.157.3 that I have on my Xenial box, but it does seem to be included in linux-firmware 1.161 as part of Yakkety, so I suggest downloading and installing it:
https://launchpad.net/ubuntu/yakkety/amd64/linux-firmware/1.161

It would be great if this update was pushed to Xenial as well in order to mitigate the issues we're seeing.

Judging by the fact that downgrading to a previous firmware version didn't seem to help (so the issue was not caused by a firmware upgrade), but upgrading did help, I suspect that a recent change in iwlwifi or the kernel is causing the wifi to fail unless it is using the new firmware in iwlwifi-7260-17.ucode.