Short Takes On High Yields


The Federal Communications Commission celebrated a small victory in the wake of NextWave Telecom Inc.'s defeat last week in the Second Circuit Court of Appeals. In a statement released last week, FCC Chairman William Kennard said, "Today's decision is a big win for the American public. The decision brings us another step closer to auctioning this spectrum to give consumers more choice in advanced wireless communications, including greater and faster access to the Internet. These valuable licenses have lain fallow far too long." The Second Circuit ruled that the U.S. Bankruptcy Court did not have the authority to tell the FCC that it had overstepped its bounds in revoking the company's licenses. The FCC sought to take back the licenses in the aftermath of Nextwave's bankruptcy, so that the license could be re-auctioned. An auction is scheduled for July 26 (HYR 02/14/2000)...

Satellite television companies got some help last week from a group that is not often in the high yield spotlight: the House Agricultural Committee. The Congressional committee approved a $1.25 billion loan guarantee program that is designed to help alleviate the financial burden for satellite companies serving rural areas. Satellite broadcasters have long faced a situation where the urban areas are more profitable than the rural regions, and consequently, some rural customers have not had access to the full services...

Qwest Communications International inked a deal with Jato Communications Corp., a high speed digital subscriber line Internet access company, that provides Jato access to Qwest's network and, in turn, supplements Qwest's nationwide DSL coverage. Under the agreement, Qwest will receive about $25 million from Jato for network services and it will invest $10 million in the other company, with an additional $2.5 million investment in the near future...

Meanwhile, Qwest announced its completion of a 1,000-mile expansion of its high-speed broadband Internet network, bringing its total North American network to 25,500 miles. The new Denver/Dallas route, which comes from an exchange of fiber-optic capacity, will enable Qwest to realize greater cost savings and improved network transmission, the company said in a release...

High yield bellwether Nextlink Communications saw its fourth quarter loss increase due to higher spending required to expand its network and to connect to more customers. The fourth quarter loss was $192.1 million, or $1.57 a share, compared to a loss of $96.5 million, or $1.03 a share in the year-ago period. Revenue, however, more than doubled to $90 million from $43.3 million. The latest loss included a $30.9 million non-recurring charge related to the relocation of its headquarters to McLean, Va. from Bellevue, Wash...

Donald Erickson recently stepped up as senior vice president and controller at Comcast Cable Communications Inc. In this position, Erickson will oversee accounting and financial analysis for all of Comcast's cable operations. He joined the company in 1990 as director of internal audit and most recently served as vice president...

High yield radio broadcaster AMFM Inc. said last week that Vice Chairman James De Castro will resign. The issuer, the second-largest radio broadcaster in the U.S., is being acquired by rival Clear Channel Communications Inc. The resignation was slated to take effect last Friday, Feb. 18. Clear Channel is close to buying AMFM for $23.5 billion in stock and assumed debt, creating the largest radio company in the country with more than 800 stations...

Park Place Entertainment's largest institutional shareholder - hedge fund Highfields Capital Management - has called for the resignation of Chairman Stephen Bollenbach. That came after Bollenbach sold three million shares of the company that he owned, which represented about 75% of his options...

Williams Communications said it is formalizing a strategy for bandwidth trading and optimization under the leadership of Sharon Crow, a newly appointed vice president of bandwidth markets. She will be responsible for working with the broadband industry to identify and implement new market opportunities and develop standards...

Globalstar de Mexico and cellular provider Nuevo Grupo Iusacell S.A. announced an alliance in which Iusacell will market Globalstar mobile satellite telephone products and services in Mexico. Under the agreement, Iusacell will offer existing and potential customers a combined service that uses its own land-based technology within its coverage areas, and Globalstar's satellite technology where cellular service is unavailable...

Primus Telecommunications Group Inc. will make a $250 million convertible debt private placement of subordinated notes due 2007. Proceeds will be used to fund the build-out of the company's ATM-IP broadband network and potential future acquisitions. The notes will be convertible into Primus common stock. No word on when the offering will take place...

VoiceStream Wireless Corp.'s $1.7 billion acquisition of Omnipoint Corp. was finally approved by the Federal Communications Commission last week. Washington-based VoiceStream has major operations in the West, while Maryland-based Omnipoint's major customer base is on the East Coast. And, once VoiceStream completes its plans to buy Aerial Communications Corp. for $1.8 billion, the company will control a wireless network that covers nearly the entire U.S. The FCC will give VoiceStream and Omnipoint 90 days to divest wireless licenses in the 18 markets where both companies already had a presence.