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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: Scott H who wrote (631)	3/29/1999 5:15:00 PM
From: Scott H	Respond to of 108040

WIRL. Possible Huge deal with MCI Worldcom This explains it: Dow Jones Newswires -- March 29, 1999 CNBC's FABER REPORT: WCOM's Wireless Cable Play The following report was aired Monday on CNBC-TV by CNBC reporter David Faber: MCI WorldCom Inc. (WCOM) is getting into the wireless cable business, or what was the wireless cable business. Late last week, the giant telecom company spent what traders tell me could have been as much as $300 to $400 million dollars on the purchase of bonds and equity issued by CAI Wireless Systems Inc. (CWSS), and bonds issued by wireless cable companies CS Wireless, People's Choice TV Corp. (PCTV) and Wireless One Inc. (WIRL). WorldCom, trading sources tell me, may now control between 50% and 60% of the bonds of these companies and appears to control much of the equity of CAI Wireless as well. CAI's CFO declined comment. WorldCom purchased the bonds and stock from Merrill Lynch and from Moore Capital. These two firms were widely known as the largest holders of the debt of the wireless cable companies, most of which are still trying to reorganize after failing in their attempt to send cable televsion without a cable. Moore Capital declined comment, citing confidentiality requirements. A Merrill spokesperson has not yet responded to a request for information specifically about the global allocation fund. Each of the wireless cable companies, save CAI, is restucturing, meaning control of the company is in its debt, not its stock. CAI emerged from bankruptcy last October, and Merrill's global allocation fund was both a big holder of its new bonds and its equity as a result of holding the old bonds and providing financing for the company to emerge from bankruptcy. While WorldCom has not yet gotten back to me with a response to my questions, the speculation about its intent here centers on the use of the spectrum controlled by these wireless cable companies. Known as MMDS, the spectrum did not prove effective for transmitting analog video. But, with these companies controlling what is 200 megahertz of broadband spectrum, it is clearly of value to WorldCom. Michael Whelan, PCTV's CFO, believes the company may try to win control of these companies so as to use the spectrum for its UUNet Internet unit. Currently, UUNet pays the Baby Bells for the T One lines that connect it to its customers homes over the so-called last mile. WorldCom pays the Baby Bell for that last mile connection. But if it can bypass that with its own wireless broadband solution, its costs go down. PCTV and CAI alone cover close to 50% of the country with their spectrum. Whelan says his company is currently offering high-speed data transmission to 2000 of its customers. Industry sources tell me WorldCom may have made its move in backhanded way to beat competitor Sprint Corp. (FON) to the punch.