Prop and Circumstance

Our vote for the smartest wireless company in the industry goes to NextWave Telecom, a firm with no customers and only the scant beginnings of a network.

Many people in the wireless industry hate NextWave. So do we, though it's nothing personal. We're tired of the disruption its litigation with the FCC has continued to cause. We're tired of hearing about a company with executives who've never done anything of substance beyond walking up the steps of a courthouse (at least until recently). We're tired of the way the courts and the FCC are being naively led around by a company that has no customers and not much of a network but has been around the block many more times than our regulators and judges.

There are plenty of reasons to be skeptical about NextWave's true intentions. The company went bankrupt before it could start building a network, and despite claims that it was planning a buildout last fall, not many were surprised when it pursued a cash settlement for its licenses in November. What may be more surprising is that NextWave finally did launch a network build just a few weeks ago.

Does that mean NextWave is ready to make good on the promise it portended six years ago? Hardly.

As it faces the likelihood of being taken to the Supreme Court by the FCC, NextWave's network construction is scaffolding without a structure. The company is seemingly intent on building a network because it believes that will help its chances to be acquired before it's called to the Supreme Court. Now that a settlement has crumbled, NextWave knows the only way it can make good for investors is to give another company something else to buy besides its licenses. It even has shifted its business plan away from the carriers' carrier model, of which so many people were critical, and toward a buzz-worthy but risky retail data play — all the better to make NextWave seem like a firm that's actually trying to compete.

NextWave is the smartest company around because it is doing what it has to do to cash in and make money for its investors. It's smart because it has never admitted — and probably never will admit — that this is the plan. It's smart because it knows that a company without a known brand can't survive only on data services. It's smart because it knows how much B.S. the industry is willing to swallow, and it knows the limit has just about been reached.