Speedus.com Inc., formerly CellularVision USA Inc., is
selling spectrum to raise $40 million as part of its survival plan to become a wireless
high-speed Internet-service provider.
Speedus.com will sell about 150 megahertz of its wireless
spectrum to Nextlink Communications Inc. -- a Bellevue, Wash.-based
wireless-communications company founded by cellular-telephone pioneer Craig McCaw -- for
about $20 million.
In addition, Nextlink will buy 2 million shares of
Speedus.com stock for another $20 million, representing about 10 percent of
Speedus.com's outstanding stock.
The deal should be closed in about three weeks.
Nextlink, the largest holder of
local-multipoint-distribution-service licenses in the country, will receive a seat on
Speedus.com's board of directors. Speedus.com also will receive access to
Nextlink's research-and-testing facility in Plano, Texas.
The deal will grow Speedus.com's cash reserves to
about $50 million. The company has about $300,000 in debt.
Nextlink spokesman Todd Wolfenbarger said Nextlink decided
to enter into the deal to fill in some holes in its wireless coverage in New York and to
take advantage of some of Speedus.com's point-to-multipoint technology.
The purchase will double Nextlink's wireless spectrum
in New York to 300 MHz. Wolfenbarger said the company currently offers telephony and data
services to small and midsized businesses in the top 30 markets in the country.
Nextlink is in the middle of building an extensive fiber
optic network in those 30 markets -- it plans to spend about $600 million this year alone
-- and the Speedus.com spectrum will serve as a means to connect those customers directly
to the network, the so-called last mile.
Wolfenbarger added that Nextlink is also migrating toward
offering service to large Fortune 500 companies.
"We serve mostly small to medium-sized business,"
he said. "We're looking to capitalize on our network. Obviously, that will move
upstream. This is a huge business that has been underserved."
CellularVision was a pioneer of LMDS. The company decided
earlier this year to scrap its video-service plans and to concentrate on delivering
high-speed Internet service.