MFS, TCG, and Brooks were not the only CLECs who were building metro networks at a frantic pace in the 1990s. Craig McCaw, who made billions in the wireless arena, founded Nextlink in 1994. Like Brooks, their strategy initially focused on 2nd tier markets such as Columbus, Allentown, Las Vegas, Memphis, Salt Lake City, and Spokane. By 1997 they moved into tier one markets such as Los Angeles and Philadelphia.
Nextlink acquired a few fiber networks along the way. Unicom Thermal Technologies, Inc. (”UTT”) in Chicago, Linkatel in Los Angeles, and U.S. Network Inc. in Ohio. Allegiance Telecom, which had some fiber through its smart build approach, was acquired by the company in 2004.
On September 25, 2000, the company changed its name to XO Communications. On June 17, 2002 XO went into bankruptcy. The company emerged from bankruptcy on June 16, 2003. XO, which is a public company but under the effective control of Carl Icahn, is one of the survivors in the consolidation of fiber based telecoms.
Including the spendings of Alliegiance, UTT, Linkatel, and U.S. Network, let’s chalk up $5B for XO/Nextlink’s contribution toward the $85B invested in fiber optic networks. Let’s also make room at the Texas Hold’em Final Table for them. Though they have a lot of chips in front of them, they have been playing a bit wrecklessly as of late–it will be investing to see if they are still around a year from now or if they merge with another player.
Posted by Dan Caruso (May 13, 2008)
May 13th, 2008 at 6:02 am
NEXTLINK is an interesting story one very close to my heart. As one of the very early members of the NEXTLINK family, I can say it was one of the best experiences of my career. What made it different was the company culture. Certainly one of the keys to its downfall was it’s change in focus to “planting flags in a market” from serving customers. A billion for LMDS. A billion for Concentric. Lots of money for Europe. It all started to add up. But I think the real turning point was the change in leadership that brought a dramatic change in culture. Even after going through bankruptcy, wiping out the shareholders and most of the debt, and retaining some the best competitive assets in the industry, it still can not maintain a healthy business. It is probably headed for another round of financial restructuring. What a shame.
May 13th, 2008 at 7:47 am
Thanks for the comment Kent. What are you doing now? What was acquired as part of the Concentric aquisition?
May 13th, 2008 at 11:17 am
Hi Dan.
You are right on top of this blog thing! That was a fast reply. Concentric was one of the early web hosting, data storage, ISP’s, etc. and they were bought by NEXTLINK. Of course that was in the bubble days and NEXTLINK paid a lot for them and never really leveraged the business with its CLEC or integrated it very well.
As for me, I have been around the CLEC business for a dozen years. I joined NEXTLINK before the Telecom Act of 1996 was passed and there were a dozen of us in the house in the country outside Nashville starting the business. Currently I am in a career search for my next opportunity.
Thanks for the reply and take care.
Kent