BY DENISE PAPPALARDO
 Craig McCaw's Nextlink Communications was not exactly revolutionary when it started out five years ago. Instead, the firm took a nice safe road as a competitive local exchange carrier (CLEC) to small metropolitan areas such as Spokane, Wash., and Lancaster, Pa.
But it has thrown safety out the window. Now the company is thinking big and taking risks, such as investing $833 million in the still unproven Local Multipoint Distribution Services (LMDS) wireless spectrum.
Earlier this year, Nextlink spent $542 million to buy WNP Communications, which held 40 LMDS licenses. (It also paid the Federal Communications Commission $153 million in related license fees.)
In addition, Nextlink dished out $138 million to get partial ownership of 42 LMDS licenses from another McCaw business, Nextband Communications.
All these licenses could help Nextlink quickly offer local services in new markets because LMDS eliminates the need for the company to buy or build its own network, or strike deals with the sometimes uncooperative incumbent LECs. The downside of LMDS is that it is relatively new, and carrier-class equipment is still being developed. Unruffled, Nextlink plans to have LMDS equipment trials underway by year-end.
Fiber backup
If LMDS fails, Nextlink still has 16,000 route fiber miles.
In addition, Nextlink is part of a joint venture company, Internext Communications, building a $700 million fiber-optic network that should be working by next year. The Internext network will connect Nextlink's 22 facilities-based local networks and support Nextlink's frame relay and ATM services due later this year.
In Nextlink, analysts see a company clearly on the move. The company, in fact, makes its debut on the Network World 200. It ranks 128.
"In the last six to 12 months, Nextlink has made fundamental changes in its business plan," says Michael Smith, managing director at Stratecast Partners, a Mountain View, Calif., consulting firm. "Nextlink is good at offering business users local dial-tone services, but it is now trying to evolve into a much broader company with a grander vision."
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