Agreement suspended for one year
Joint News Release: Bell Atlantic, NYNEX, CAI Wireless
Systems Suspend Business Agreement For One Year
PR Newswire - December 13, 1996 08:36
FINANCIAL BEL NYN CAWS TLS V%PRN P%PRN
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CAI Provided with Option to Repurchase Bell Atlantic, NYNEX Investment in CAI
Securities
Changing Market Conditions, Full Service Network Buildouts Lead to Re-
Evaluation Of Plans for Digital Wireless Video Strategy
NEW YORK, PHILADELPHIA and ALBANY, N.Y., Dec. 13 /PRNewswire/ -- Bell
Atlantic (NYSE: BEL), NYNEX (NYSE: NYN) and CAI Wireless Systems, Inc.
(Nasdaq: CAWS) are suspending a 1995 business agreement for one year and
providing CAI with the option to repurchase a $100 million investment in CAI
securities made by Bell Atlantic and NYNEX.
Under a new agreement signed yesterday, the way has been cleared for CAI
to develop a more flexible approach to the use of its MMDS spectrum, including
the provision of video, voice and data services in Northeast and mid-Atlantic
markets.
Bell Atlantic and NYNEX said they were re-evaluating their decision to use
CAI's MMDS (Multichannel Multipoint Distribution Service) transport systems as
an early-to-market video strategy due to a number of factors, including
changing market conditions for entertainment services, the technical
availability of fiber-based Full Service Networks and CAI's desire to expand
its use of spectrum beyond video transport.
As a result, the companies have re-negotiated a 1995 agreement to develop
and deploy wireless video networks and have also suspended plans to jointly
launch wireless video services in Hampton Roads, Va., and Boston, Mass., in
1997.
Under the terms of the agreement announced today, CAI will be given an
option for up to one year to purchase Bell Atlantic and NYNEX's interest in
the company. The agreement also enables CAI to expand the markets in which it
may seek FCC approval for mixed use of MMDS spectrum.
Bell Atlantic and NYNEX added that they continue to view the marketplace
for broadband services such as video and high speed data connectivity over the
Full Service Network as an attractive long term growth strategy. Therefore,
they are still evaluating a variety of delivery systems for video and
entertainment services.
Bell Atlantic is currently providing video programming over its fiber
network in Toms River, N.J., and recently announced deployment plans to deploy
switched digital video in the Philadelphia market.
NYNEX also has selected switched digital technology as part of the
company's plan to deliver the next generation of network technology to its
customers. In October, NYNEX signed a multi-year agreement with General
Instrument that includes one million lines of transport electronics to be
deployed in metropolitan Boston and New York City areas, as well as parts of
Long Island and Westchester County, N.Y. The first installation of this new
technology, initially for voice applications, will begin in metropolitan
Boston early next year.
"CAI is anxious to test the versatility of its considerable MMDS spectrum
in new endeavors that combine video, voice and data transmission," said Jared
E. Abbruzzese, chairman and CEO of CAI. "We have learned much from building
digital wireless systems during this trial. We appreciate that they have
given us the opportunity to charter a different destiny for our company, and
we hope to aggressively press the regulatory envelope for full flexible use of
MMDS spectrum."
CAI has been exploring mixed use of MMDS spectrum in markets not covered
by the original agreement with Bell Atlantic and NYNEX, such as Rochester,
N.Y., where the FCC has granted the company authority for a market trial with
500 users. The company has also requested FCC approval for a two-way
flexible-use MMDS trial in Hartford, Conn.
Through CS Wireless Systems, Inc., CAI's majority-owned joint venture with
Heartland Wireless Communications, Inc., the company plans in 1997 to roll out
a high speed Internet access service combined with digital subscription
television service in Dallas.
Bell Atlantic Corporation is at the forefront of the new communications,
entertainment and information industry. In the mid-Atlantic region, the
company is the premier provider of local telecommunications and advanced
services. Globally, it is one of the largest investors in the high-growth
wireless communication marketplace. Bell Atlantic also owns a substantial
interest in Telecom Corporation of New Zealand and is actively developing
high-growth national and international business opportunities in all phases of
the industry.
INTERNET USERS: Bell Atlantic news releases, executive speeches, news
media contacts and other useful information are available on Bell Atlantic's
media relations World Wide Web site (http://www.ba.com), or by gopher
(gopher://ba.com). To receive news releases via e-mail send a message to
lists@bell-atl.com.
NYNEX is a global communications and media corporation that provides a
full range of services in the northeastern United States and high growth
markets around the world, including the United Kingdom, Thailand, Gibraltar,
Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic.
The corporation is a leader in telecommunications, wireless communications,
directory publishing and video and entertainment services. NYNEX is also
managing sponsor of FLAG -- Fiberoptic Link Around the Globe -- the world's
longest undersea fiber optic communications cable.
NYNEX news releases are now available on the Internet at
nynex.com. You can also receive fax copies of recent NYNEX news
releases free of charge, 24 hours a day. Call 1-800-331-1214, and follow the
automated system instructions.
CAI, based in Albany, N.Y., operates analog-based wireless systems in New
York City, Rochester and Albany, Philadelphia, Washington, D.C., and
Norfolk/Virginia Beach, Va., and has a portfolio of wireless cable channel
rights in eight additional markets, including Long Island, Buffalo and
Syracuse, N.Y., Providence, R.I., Hartford, Conn., Boston, Baltimore and
Pittsburgh.
CAI is also conducting market trials of wireless Internet access service
in its Rochester market and has been granted authority to test such service in
New York City. In addition, CAI owns approximately 52 per cent of CS Wireless
Systems, Inc., which is jointly owned by Heartland Wireless Communications,
Inc. CS Wireless has, on a pro forma basis for announced transactions,
approximately 7.2 million line-of-sight (LOS) households and 77,550
subscribers in 17 markets located primarily in the Midwest and the Southwest
regions of the United States. |
