Deals Show Mccaw’s New Direction Seattle Billionaire Dials Into New Phone Ventures After Selling Cellular Company

Craig McCaw has become the wild card and kingmaker of telecommunications at a time when the industry is a swirl of big deals, swiftly moving technology and squabbles over regulatory change.

Since he sold McCaw Cellular Communications Inc., the nation’s largest cellular phone company, to AT&T Corp. last fall, many people have wondered what the affable, soft-spoken billionaire from Seattle would do next.

McCaw’s money and experience sets him apart as he explores new technology and companies.

“Anytime you visibly stop doing one thing, people come to you with different ideas,” McCaw said Wednesday after announcing plans to invest up to $1.1 billion in Nextel Communications Inc., a mobile radio firm.

Also on Wednesday, officials with Spokane-based Tel-West Central announced they had sold their local dial-tone operations to Kirkland-based FiberLink, a McCaw-controlled company. Tel-West Central, which serves businesses in the downtown core, is US West’s only competitor for local phone service.

The two investments show that McCaw plans to remain a player in emerging communications technologies, despite the sale of his cellular phone empire.

He will initially invest $300 million in Nextel, which is developing a national digital communications system aimed chiefly at companies with vehicle fleets and mobile workers.

He said he had followed Nextel for years but did not begin to consider an investment until January, when an intermediary approached him about it.

“It seemed like an interesting opportunity was developing and I began to think more about the marketplace and the fact the company had been rebuffed by others,” McCaw said, referring to MCI Communications Corp.’s decision to pull back on a planned $1.3 billion investment in Nextel.

“That usually is a mark of interest of mine, being sort of a counter-cultural type of character,” he said, chuckling as he motioned at the staid conference room in the Waldorf-Astoria Hotel where he was interviewed.

Nextel’s shares have languished in the months since MCI backed away. They jumped 25 percent Wednesday.

“Craig McCaw is one of the visionary leaders in (wireless) technology,” said analyst Howard Anderson, managing director of the Yankee Group, a Boston investment and market research firm. “He recognizes specialized mobile radio can be a strong contender for cellular-like communication.”

McCaw, 45, entered the paging industry in 1974. In 1981, he was awarded a chance to set up a cellular phone system in Minneapolis, which got started in 1984. McCaw Cellular Communications grew out of that initial system in 1987 and grew to 3.3 million subscribers when AT&T bought it.

The AT&T stake, 14 million shares worth more than $700 million, he received in the deal is his largest investment. While he declined to join AT&T’s board to pursue other investments, McCaw said those would more likely be in companies that complement AT&T’s products rather than compete with them.

That became clear during his participation in the government’s recent auction of regional licenses for a nascent wireless service called PCS. McCaw dropped out close to the finish without acquiring anything.

“In the case of our PCS involvement, it was one where we were very fortunate that we could integrate our thoughts with what needs AT&T had in their particular case,” McCaw said.

He said he wouldn’t rule out investments with others.

“When you find those opportunities that someone else has a need and you can fill it and they’re not in a position to do so, we might do that,” McCaw said. “As a result of a long relationship with AT&T, I’m aware of some opportunities better than I’m aware of opportunities with MCI, Sprint and LDDS as well as a host of other places.”