NextLink Eyes LMDS Rollout Using Nortel Networks Gear

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NextLink Communications Inc. is finally comfortable with
wireless broadband as a platform for mission-critical services, signaling that the
long-awaited surge in domestic deployments of LMDS and other spectrum categories is at
hand.

NextLink, the largest holder of
local-multipoint-distribution service spectrum, has chosen Nortel Networks to supply its
first wave of rollouts across the country, targeting 25 markets by year's end.

Point-to-multipoint service deployments will start with
Nortel's FDMA (frequency-division multiple-access) system in the next few months and
move later in the year toward more advanced TDMA (time-division multiple-access)
capabilities over the same installed base of transmitters, officials said.

"Nortel had the most stable point-to-multipoint (PMP)
equipment, along with the highest level of functionality and best cost parameters in a
stable system at the present time, which are the primary things we're looking
for," said Doug Carter, CTO at NextLink. "There are other vendor options with
very appealing architectures and better cost points that we're looking at, with the
expectation that we'll choose a second PMP vendor and another point-to-point supplier
before the year is out."

NextLink has offered PMP services on a limited basis in Los
Angeles and Dallas using gear supplied by SpectraPoint Waveless, a joint venture between
Motorola Inc. Corp. and Cisco Systems Inc. with Motorola as the majority owner. But
NextLink has been unable to move ahead with PMP LMDS deployments because of problems with
reliability among all the vendor systems the operator has been testing.

"We've had a real problem with basic reliability,
things like signals fading or dropping out for three to five seconds, including with the
Nortel equipment until they passed the latest burn-in test," Carter said.

NextLink, which started as a wireline CLEC focusing on the
delivery of high-volume voice links to businesses over fiber rings in major metro areas,
is now positioning itself to be a big player in commercial data services, Carter noted.

FDMA systems offer a robust means of delivering separate
channel streams of voice and data. But the future belongs to TDMA systems that can support
dynamic allocations of bandwidth and the mixing of data and traditional digital-voice
signals within a single channel to serve multiple end users in a targeted building, he
said.

"Now we're pushing ahead with true broadband
services, and LMDS is becoming more of a linchpin to our service strategy," Carter
noted. "Data is going to be a big piece of our business going into the second half,
once we close the deal with Concentric [Networks]."

That deal, which involves the acquisition of a leading
nationwide ISP, will give NextLink service provisioning and management skills that go
beyond pure transport to all varieties of hosted applications and support for
business-to-business, as well as the electronic-commerce services that are the hot buttons
in today's commercial marketplace.

In NextLink's strategy, PMP LMDS is ideally suited for
customers looking for broadband services in the 10 megabit-per-second range. The firm is
using DSL, or digital-subscriber line, as its primary mode for serving customers at 2 mbps
or lower speeds and point-to-point LMDS for high-end customers looking for connectivity at
the 100-mbps level, Carter said.

Nortel, like other wireless-broadband vendors, points to
initial rollouts of TDMA systems in other countries as proof that the technology has
become "hardened" for commercial deployment.

"We're selling a lot of TDMA systems, including
one in Portugal and one in Argentina which we can talk about publicly and many more that
are to be announced," said John Skoro, marketing director for broadband wireless
access at Nortel.

"We moved the bar ahead by creating a system that
allows carriers to deploy either FDMA or TDMA on the same radio using different carriers
for each," Skoro said. The TDMA bandwidth-management and media-access-control
functions are based on cable's Data Over Cable Service Interface Specification, which
is becoming increasingly popular as a core element of advanced wireless-broadband systems.

The two companies said they plan to extend their
relationship in an initiative designed to expand the use of wireless broadband in a wide
area Internet Protocol end-to-end network between several major metropolitan regions. This
will help NextLink create a virtual Ethernet network that can be centrally managed across
a vast base of potential customers, officials noted.

NextLink, founded by cellular pioneer Craig McCaw and
various partners, currently offers services in 49 markets and holds LMDS licenses that
cover 95 percent of the population in the top 30 U.S. markets.

The company is also acquiring exclusive rights to fiber
links in building an IP-centric backbone that will connect over 50 cities in the U.S. and
Canada by the end of 2001, with various segments coming on line over the next two years,
officials said.

Teligent Inc., one of NextLink's major competitors
among wireless-broadband providers, is also about to break out of what has been a limited
use of PMP technology in several markets to a nationwide rollout, using licenses at the 24
GHz spectrum tier.

The company hopes to begin that phase in the second
quarter, said Steve White, vice president of sales for the company's operations in
Texas and Louisianna.

"Right now, that's the plan, but we won't
know for sure until things get rolling," White said. "There's still a lot
of testing going on in the vendor selection process."

With only 4 percent of 760,000 office buildings nationwide
now connected to fiber, the opportunity to deliver broadband access via wireless networks
remains huge, White said. "We see revenues from fixed wireless services going from
$.3 billion in '99 to over $5 billion in 2003," he noted.

After years of intensive efforts to overcome the barriers
to delivering mission-critical services over cost-effective PMP networks in the
high-frequency zones used by NextLink, Teligent and other providers, vendors have high
expectations that their moment for a payoff has arrived.

"Prior to this generation of broadband-wireless access
technology, the industry didn't have the technology platform it needed to deliver
voice as well as data, which is what the market wants," said Cynthia Hillery, vice
president of marketing at Netro Corp., a San Jose-based supplier of PMP access equipment.
"Now we've stepped beyond those limitations and are seeing preparations for
service launches underway worldwide, including in the U.S."

Netro, with eight commercial pilot launches and more than
30 trials of PMP systems in play outside the U.S., uses a combination of TDMA multiplexing
of signals into asynchronous transfer mode cells and a proprietary media-access control
layer system for dynamic allocation of bandwidth, Hillery said.

"TDMA is a hardened technology that is winning market
confidence worldwide," she said, adding, "The year 2000 is the year of
broadband-wireless access."

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