Nextlink Buying Rest of Internext

Nextlink Communications Inc., a telephone company controlled by cellular entrepreneur Craig McCaw, said it’s buying the half of Internext it doesn’t own for $220 million in stock, gaining control of a venture that’s helping fund a fiber-optic network. Nextlink is buying the stake from closely held Eagle River Investments, its largest shareholder and the holding company for McCaw’s investments. Based on Tuesday’s prices, Kirkland, Wash.-based Eagle River will get 4.1 million Nextlink shares. Eagle River now owns 38 million shares, or 29%, of Nextlink. Nextlink and other McCaw affiliates in 1998 agreed to buy a quarter of the capacity of a fiber-optic network being built by Level 3 Communications Inc. to handle rapid growth in phone traffic spurred by the Internet. The McCaw affiliates agreed to pay $700 million and created Internext to monitor the investment. The $2.2-billion, 16,000-mile network being built by Broomfield, Colo.-based Level 3 will connect almost every major city in the U.S. and Canada. Nextlink, based in McLean, Va., provides voice and data services in 48 U.S. markets.