Big Nextel bid wins Worldcom wireless assets

Nextel Communications, once nearly acquired by Worldcom during that carrier's pre-scandal, merger-happy period in the late 1990s, is now in line to acquire Worldcom's fixed wireless properties through bankruptcy auction.

In a surprising development, Nextel apparently has out-bid BellSouth for WorldCom's MMDS properties, agreeing to pay $144 million. BellSouth had bid $65 million.

A bankruptcy court hearing focused on the proposed deal will be held early next week.

Though the deal could be worth more than twice what Worldcom would have gotten from BellSouth, the price pales in comparison to the $1-billion-plus that Worldcom spent to acquire several small MMDS carriers and license holders in the late 1990s.

Several weeks ago, BellSouth and Worldcom were reportedly so close to a deal that they had agreed on a $1.4 million break-up fee and $520,000 expense reimbursement for BellSouth if the deal fell through. At that time, analysts had speculated that BellSouth could have combined the MMDS properties with Wireless Communications Services spectrum rights to become a dominant U.S. broadband wireless player.

None of the companies involved could be reached for comment.

Though the idea of Nextel acquiring fixed wireless rights appears confusing, a source familiar with spectrum issues told Telephony the same properties likely could be used to provide mobile services.

“It’s extremely likely they are not limited to fixed wireless use,” the source said, adding that Nextel probably pursued the deal because its hopes of being awarded new wireless spectrum by the FCC as part of a spectrum re-allocation proposal are dwindling.