Craig McCaw and his crew at NextLink knew what they were doing, even if the rest of the world wasn’t as sure.
Long characterized as a competitive local exchange carrier, NextLink is just beginning to be recognized for the full scope of its ambitions. In its infancy, the company behaved like a CLEC, providing voice and dial-tone services as a competitive access provider in Spokane, Wash.; Memphis, Tenn.; and central Pennsylvania. But the company’s plans have evolved into something much bigger.
NextLink decided in 1996, with passage of the telecommunications act, that it could compete with the regional Bell operating companies and began offering actual dial-tone services. The strategy compelled the company into building fiber rings in cities throughout the nation. By the end of next year, NextLink plans to have service available in the country’s 30 largest markets.
Todd Wolfenbarger, vice president of corporate communications for the company, said NextLink eventually hopes to compete with the likes of AT&T Corp., MCI WorldCom Inc., the remaining regional Bell companies and any national broadband players that emerge. The company is focused on providing scalable broadband services to small- and medium-sized business customers via a network made up of fiber optic, broadband wireless access and digital subscriber line links to its fiber rings that will be connected to an Internet-based long-distance backbone.
“McCaw’s businesses have historically focused nationally,” said Wolfenbarger. “We have twice revised our business plan since we went public to aggressively go after more cities.
“There’s no question about it,” continued Wolfenbarger. “NextLink is a national move.”
While many companies are focused on the last-mile bottleneck, for which broadband wireless access is highly touted, NextLink takes a more holistic approach to offering broadband services. In the end, the company hopes owning the network from start to finish will allow it the flexibility to win customers either through lower prices or better service offerings.
Wireless last-mile links, both point-to-point and point-to-multipoint, figure prominently into the company’s strategy.
The company participated in the 1998 Federal Communications Commission auction of Local Multipoint Distribution Services licenses as a part of a consortium with Nextel Communications Inc., called NextBand. NextLink later bought out Nextel’s stake in the consortium, which was the second-largest bidder in the auction, pledging a total of $134.7 million for 42 licenses, including large markets such as Chicago, New York and Los Angeles.
NextLink added to its LMDS holdings earlier this year when it acquired the largest LMDS auction winner, WNP Communications Inc.
Despite its position at the top of the LMDS roster, NextLink prefers to reach its customers via fiber links because of fiber’s stability and capacity, said Wolfenbarger.
However, wireless is expected to allow the company to “tease” fiber out from its rings in metro areas. Instead of investing thousands of dollars and months or years deploying fiber to a building outside of one of its fiber rings, NextLink would establish a wireless link to that building and later build fiber to the building after the company secured enough customers to justify the deployment costs, said Wolfenbarger.
Still, not all buildings will be served by fiber, and wireless access will continue to play an important role, said Wolfenbarger. Many buildings are too small or physically too far away from fiber rings to justify the cost. In addition, said Wolfenbarger, some cities have placed moratoria on deploying fiber, making wireless access the only option, at least for now, in those markets.
“There will be many, many customers whose business connection is just through broadband wireless and will be forevermore,” said Wolfenbarger. “Wireless allows us to take broadband communications to the business masses.”
The company plans to begin launching BWA service this year and have service available in 25 of the top 30 markets by the end of next year.
Wolfenbarger said NextLink is fortunate to have McCaw and other wireless industry veterans at the helm.
“They saw that there was going to be a real bandwidth opportunity going forward, and that people who could provide networks that could carry enormous amounts of bandwidth would win,” he said. “We’re very fortunate to have as our founder, and our lead strategist … Craig McCaw who has had a really unique ability to be ahead of the game in a lot of industries.”
