NEXTLINK COMMUNICATIONS INC / DE
S-3, 1999-05-05
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
Previous: MERISTAR HOSPITALITY CORP, S-3/A, 1999-05-05
Next: NEXTLINK COMMUNICATIONS INC / DE, S-3/A, 1999-05-05



<PAGE>
      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1999
 
                                                   REGISTRATION NO. 333-[ ]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
 
                         NEXTLINK COMMUNICATIONS, INC.
             (Exact Name of Registrant as Specified in its Charter)
 
<TABLE>
<S>                               <C>                               <C>
            DELAWARE                            4813                           91-1738221
(State or Other Jurisdiction of     (Primary Standard Industrial            (I.R.S. Employer
 Incorporation or Organization)     Classification Code Number)           Identification No.)
</TABLE>
 
                            ------------------------
 
 500 108TH AVENUE N.E., SUITE 2200, BELLEVUE, WASHINGTON 98004, (425) 519-8900
  (Address, including ZIP code, and telephone number, including area code, of
                 the Registrant's principal executive offices)
                            ------------------------
 
                           R. BRUCE EASTER JR., ESQ.
                       500 108TH AVENUE N.E., SUITE 2200
                           BELLEVUE, WASHINGTON 98004
                                 (425) 519-8900
 (Name, address, including ZIP code, and telephone number, including area code,
                             of agent for service)
                            ------------------------
 
                                   COPIES TO:
 
<TABLE>
<S>                                         <C>
           BRUCE R. KRAUS, ESQ.                      ROBERT E. BUCKHOLZ, ESQ.
         WILLKIE FARR & GALLAGHER                      SULLIVAN & CROMWELL
            787 SEVENTH AVENUE                           125 BROAD STREET
         NEW YORK, NEW YORK 10019                    NEW YORK, NEW YORK 10004
              (212) 728-8000                              (212) 558-4000
</TABLE>
 
                            ------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED OFFER TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
 
    If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
 
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.  / / ______
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                                                                PROPOSED
                                                         AMOUNT             PROPOSED            MAXIMUM            AMOUNT OF
        TITLE OF EACH CLASS OF SECURITIES                TO BE          MAXIMUM OFFERING       AGGREGATE          REGISTRATION
               TO BE REGISTERED(1)                     REGISTERED           PRICE(1)         OFFERING PRICE           FEE
<S>                                                <C>                 <C>                 <C>                 <C>
  % Senior Notes Due 2009........................     $500,000,000            100%
  % Senior Discount Notes Due 2009...............     $432,125,000          57.854%        $  750,000,000      $    208,500
</TABLE>
 
(1) Estimated solely for the purpose of calculating the registration fee.
                            ------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                       SUBJECT TO COMPLETION, MAY 5, 1999
 
    PROSPECTUS
 
                                                  [LOGO]
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT OFFER THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
                          $750,000,000 GROSS PROCEEDS
                         NEXTLINK COMMUNICATIONS, INC.
 
                              % SENIOR NOTES DUE 2009
 
                          % SENIOR DISCOUNT NOTES DUE 2009
                                   ---------
 
    NEXTLINK Communications, Inc. intends to raise gross proceeds of
$750,000,000 through this offering of senior notes and senior discount notes.
 
    Interest on the senior notes is payable semi-annually on June and December
each year, beginning December   , 1999.
 
    The senior discount notes, which will be sold at a price, which we refer to
as their "initial accreted value," representing a substantial discount to their
principal amount, will not pay interest until the fifth anniversary of their
issuance. The accreted value of the senior discount notes will increase, or
accrete, at a rate of    % per annum, compounded semi-annually, until June   ,
2004, when it will reach 100% of the senior discount notes' principal amount.
Thereafter, interest on the senior discount notes will be payable semi-annually
on June   and December   of each year, beginning on December   , 2004.
 
    We may redeem all or a portion of either or both series of notes at any time
on or after June   , 2004 at the redemption prices set forth in this prospectus,
plus accrued and unpaid interest. Upon a change of control, you will have the
right to require us to repurchase senior notes at a price equal to 101% of the
principal amount thereof, or senior discount notes at a price equal to 101% of
the accreted value, in each case plus accrued and unpaid interest, if any, to
the date of repurchase.
 
    Neither series of notes will trade on any established exchange.
                                 --------------
 
      INVESTING IN THE NOTES INVOLVES RISKS DESCRIBED BEGINNING ON PAGE 5.
 
Neither the Securities and Exchange Commission nor any state securities
commission has approved these securities or determined that this prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
                                 --------------
 
<TABLE>
<CAPTION>
                                                                          SENIOR NOTES          SENIOR DISCOUNT NOTES
                                                                    -------------------------  ------------------------
                                                                      PER SENIOR                PER SENIOR
                                                                         NOTE         TOTAL    DISCOUNT NOTE    TOTAL
                                                                    --------------  ---------  -------------  ---------
<S>                                                                 <C>             <C>        <C>            <C>
Public Offering Price.............................................              %   $                     %   $
Underwriting Discount.............................................              %   $                     %   $
Proceeds to NEXTLINK (before expenses)............................              %   $                     %   $
</TABLE>
 
    We expect to deliver the notes in New York, New York, on or about       ,
1999.
                                 --------------
SALOMON SMITH BARNEY
         GOLDMAN, SACHS & CO.
                  BEAR, STEARNS & CO. INC.
                           CREDIT SUISSE FIRST BOSTON
                                     CHASE SECURITIES INC.
<PAGE>
    [Graphic: Map of United States and southern Canada showing NEXTLINK's local
networks, broadband spectrum licenses and route of national fiber optic network
now under construction.]
 
    In connection with this offering, the underwriters may engage in
transactions that stabilize, maintain, or otherwise affect the price of the
notes, including over-allotment, bidding for or purchasing such securities to
stabilize their market price, purchasing such securities to cover some or all of
a short position in such securities maintained by the underwriters, and the
imposition of penalty bids. For a description of these activities, see
"Underwriting".
<PAGE>
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                -----
<S>                                                                                                          <C>
Prospectus Summary.........................................................................................           1
 
Risk Factors...............................................................................................           5
 
Use of Proceeds............................................................................................          12
 
Capitalization.............................................................................................          13
 
Selected Historical Consolidated Financial and Operating Data..............................................          14
 
Management's Discussion and Analysis of Financial Condition and Results of Operations......................          17
 
Business...................................................................................................          22
 
Regulation.................................................................................................          30
 
Description of the Notes...................................................................................          32
 
Material United States Federal Income Tax Consequences.....................................................          67
 
Description of Other Material Indebtedness.................................................................          69
 
Underwriting...............................................................................................          75
 
Validity of the Notes......................................................................................          77
 
Experts....................................................................................................          77
 
Where You Can Find More Information........................................................................          77
</TABLE>
 
    You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information or to make any
representation to you that is not contained in this prospectus. This prospectus
is not an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted. You should not under any circumstances assume that the
information in this prospectus is correct on any date after the date of this
prospectus.
<PAGE>
                               PROSPECTUS SUMMARY
 
    YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS
INCORPORATED BY REFERENCE FROM OUR 1998 FORM 10-K, DATED MARCH 29, 1999.
 
OUR BUSINESS
 
    Since 1996, NEXTLINK has provided high-quality telecommunications services
to the rapidly growing business market. We believe that increasing usage of both
telephone service and newer data and information services will continue to
increase demand for telecommunications capacity, or bandwidth, and for new
telecommunications services and applications.
 
    To serve our customers' broad and expanding telecommunications needs, we
have assembled a unique collection of high-bandwidth, local and national network
assets. We intend to integrate these assets with advanced communications
technologies and services in order to become one of the nation's leading
providers of comprehensive end-to-end telecommunications services.
 
    To accomplish this:
 
    - we have built 23 high-bandwidth, or broadband, local networks in 14
      states, generally located in the central business districts of the cities
      we serve, and we are continuing to build additional networks;
 
    - we have become the nation's largest holder of broadband fixed wireless
      spectrum, with FCC licenses covering 95% of the population of the 30
      largest U.S. cities, which we will use to extend the reach of our networks
      to additional customers; and
 
    - we have acquired exclusive interests in a national broadband network now
      being built to traverse over 16,000 miles and to connect more than 50
      cities, including all of the largest cities that our current and planned
      local networks serve.
 
    As our networks become increasingly optimized for data transmission, we plan
to offer our customers high-speed Internet access and additional services, such
as Internet web hosting and support for e-commerce. By web hosting, we mean
support for customers' web sites at our central offices, running either on their
computers or on ours, together with website design and maintenance services. We
also plan to build on our existing expertise in communicating customized
information to mass-market customers and automated order fulfillment to serve
clients with e-commerce businesses, that is, businesses conducting high volume
retail transactions over the Internet.
 
    We are now operating local networks in 38 cities. We provided nearly 225,000
business telephone lines to our customers as of March 31, 1999, of which more
than 50,000 were installed in the first quarter of 1999. We are currently
building additional networks, and plan to have operational networks in most of
the 30 largest U.S. cities by the end of 2000.
 
    Our local and national networks employ fiber optic technology, which uses
light waves to transmit signals over cables consisting of many glass fiber
strands. Each strand in these fiber optic cables has enough capacity to carry
over 100,000 times more traffic than a strand of traditionally-configured copper
wire. Rings of our fiber optic cables typically encircle a city's central
business district and connect to our central offices. These central offices
contain the switches and routers that direct calls and data traffic to their
destinations, and have space to house the additional equipment necessary for
future telecommunications services. Wherever we can, we build and own these
networks ourselves. This enables us to deliver higher quality services and will
enable us to deliver new services that we expect will increase our operating
margins.
 
<PAGE>
    Our goal is to provide our customers with complete voice and data network
solutions for all of their communications needs, using our own fiber, switches
and other facilities to the greatest extent possible. Today, however, we
frequently lease the existing copper telephone wires from the dominant local
telephone company to make the physical connection for the short distance -which
we refer to as the "first mile"- between our customers and our fiber optic
networks.
 
    To reduce our reliance on first mile connections leased from the dominant
carrier, we intend to increase the number of customers connected directly to our
networks. In some cases, we will construct a new fiber optic extension from our
network to the customer's premises. In other cases, we will deploy a
high-bandwidth wireless connection between an antenna on the roof of the
customer's premises and an antenna attached to our fiber rings. These wireless
connections offer high-quality broadband capacity and often cost less than fiber
to install. We expect to deploy wireless first mile extensions in 25 markets by
the end of 2000.
 
    We are also deploying a technology called Digital Subscriber Line, or DSL,
to meet the high bandwidth needs of those customers whose first mile connection
remains over copper wire. DSL increases the effective capacity of existing
copper telephone wires. We are installing our own DSL equipment to provide these
services ourselves, and also resell another provider's DSL services.
 
    Our networks support a variety of communications technologies, which permits
us to offer customers a set of technology options to meet their changing needs,
and introduce new technologies as they become available. For example, we have
begun to add new technologies to our networks including Internet Protocol, or
IP, routers and switches, and Asynchronous Transfer Mode, or ATM switches. ATM
switches will enable us to meet the demands of large, high-volume customers,
while IP routers and switches will enable us to carry Internet traffic more
efficiently and to provide more services.
 
    As IP technology evolves and matures, we believe it will gradually replace
ATM, and we therefore intend to invest heavily in optimizing our networks for
present and future IP implementations. We anticipate that future IP technologies
will enable the high-bandwidth, end-to-end national network we are building to
carry data, voice and video. Such a network should also enable us to offer our
customers entirely new classes of IP services. We intend to remain flexible in
our technology choices, to serve our customers' present needs and to take
advantage of the future opportunities that technological advances may bring.
 
                                       2
<PAGE>
                                  THE OFFERING
 
<TABLE>
<S>                               <C>
Securities Offered..............  $         principal amount of    % senior notes due 2009.
 
                                  $         aggregate principal amount at stated maturity of
                                     % senior discount notes due 2009.
 
                                  We will issue the senior notes and senior discount notes
                                  under separate indentures, and sometimes refer to both
                                  issues of notes collectively as the "notes."
 
Issuer..........................  NEXTLINK Communications, Inc.
 
Issue Price.....................  % for the senior notes.
 
                                  % for the senior discount notes.
 
Maturity........................  June   , 2009 for both the senior notes and the senior
                                  discount notes.
 
Interest and Accretion..........  Interest on the senior notes will accrue from June   ,
                                  1999 at the rate of    % per year, payable semi-annually
                                  on each June   and December   , beginning on December   ,
                                  1999.
 
                                  No cash interest will accrue on the senior discount notes
                                  until June   , 2004. From the date these notes are issued
                                  through June   , 2004, the aggregate accreted value of the
                                  senior discount notes will increase from $      million at
                                  a rate of    % per year, compounded semi-annually, to
                                  their aggregate principal amount at stated maturity of
                                  $   million. After that date, cash interest on the senior
                                  discount notes will accrue at the rate of   % per year,
                                  payable semi-annually on June    and December    of each
                                  year, beginning on December   , 2004.
 
Ranking.........................  The notes will be unsecured and not guaranteed by any of
                                  our operating subsidiaries.
 
Optional Redemption.............  On or after June  , 2004, we will have the right to redeem
                                  any or all of the notes at their principal amount at
                                  maturity plus accrued interest and a premium initially
                                  equal to   %, in the case of the senior notes and    % in
                                  the case of the senior discount notes, and declining
                                  annually after that date.
 
                                  In addition, before June  , 2002, we have the right to use
                                  the net cash proceeds of qualifying equity offerings to
                                  redeem:
 
                                  - up to   % of the senior notes originally outstanding at
                                    their principal amount plus accrued interest, provided,
                                    that senior notes in an aggregate principal amount of at
                                    least $   million remain outstanding after the
                                    redemption; and
 
                                  - up to   % of the senior discount notes at a redemption
                                    price equal to    % of their accreted value, provided
                                    that senior discount notes in an aggregate principal
                                    amount of at least $    million remain outstanding after
                                    the redemption.
 
Tax Consequences of Holding
  Senior Discount Notes.........  The accretion of the senior discount notes from their
                                  issue price to their principal amount will produce taxable
                                  ordinary interest income in the amount of the accretion
                                  for holders of the senior discount notes during the
                                  accretion period. The Internal Revenue Code calls this
                                  original issue discount, or OID.
</TABLE>
 
                                       3
<PAGE>
 
<TABLE>
<S>                               <C>
Change of Control...............  If an event treated as a change of control occurs, we must
                                  make an offer to purchase any and all of the notes then
                                  outstanding at the following prices:
 
                                  - Senior notes: 101% of their aggregate principal amount,
                                    plus accrued and unpaid interest, if any, to the date of
                                    purchase
 
                                  - Senior discount notes: 101% of their accreted value (if
                                    prior to June   , 2004) or 101% of the aggregate
                                    principal amount, plus accrued interest (if on or after
                                    June   , 2004).
 
Covenants.......................  The indentures under which the senior notes and senior
                                  discount notes are being issued contain covenants for your
                                  benefit which, among other things and subject to important
                                  exceptions, restrict our ability and the ability of our
                                  subsidiaries to:
 
                                  - borrow money;
 
                                  - pay dividends on stock or purchase stock;
 
                                  - make investments;
 
                                  - use assets as security in other transactions; and
 
                                  - sell certain assets or merge with or into other
                                    companies.
 
                                  Each indenture allows modification and amendment of these
                                  and other covenants by a vote of holders of a majority in
                                  aggregate principal amount of the notes issued under that
                                  indenture, subject to exceptions described in the
                                  indentures. Also, holders of a majority in aggregate
                                  principal amount of the notes issued under an indenture
                                  may waive our compliance with certain other restrictive
                                  covenants in that indenture.
 
Concurrent Equity Offering......  We are offering, under a separate prospectus, 4,982,050
                                  shares of our Class A common stock, from which we expect
                                  to receive net proceeds of approximately $343.8 million,
                                  at an assumed public offering price of $73.25 per share.
                                  This debt offering is not conditioned on the closing of
                                  the concurrent equity offering and if this offering closes
                                  before the concurrent equity offering does, you should not
                                  assume that the equity offering will necessarily close on
                                  these terms, if at all.
 
Use of Proceeds.................  We intend to use substantially all of the net proceeds
                                  from this debt offering and the concurrent equity offering
                                  to expand our networks and services, introduce new
                                  technologies and to fund operating losses, working capital
                                  and possible acquisitions.
</TABLE>
 
    For additional information regarding the notes, see "Description of the
Notes" and "Material United States Federal Income Tax Consequences."
 
RISK FACTORS
 
    See "Risk Factors" beginning on page 5 for a discussion of risks relating to
the senior and senior discount notes.
 
                                       4
<PAGE>
                                  RISK FACTORS
 
    You should consider carefully the following risks before you decide to buy
our senior or senior discount notes.
 
WE HAVE SUBSTANTIAL EXISTING DEBT AND WILL INCUR SUBSTANTIAL ADDITIONAL DEBT, SO
  WE MAY BE UNABLE TO PAY INTEREST ON THE NOTES BEING OFFERED
 
    As of March 31, 1999, NEXTLINK had outstanding five issues of senior notes
totaling $2,023.0 million in principal amount, or $2,773.0 million on a pro
forma basis to include the effect of this debt offering, and approximately $73.2
million in miscellaneous debt obligations of our subsidiaries. Because we have
these substantial obligations, we may be unable to pay interest or principal on
any or all of these outstanding notes and the notes being offered.
 
    For each period since our inception, we have had substantial and increasing
net losses and negative cash flow from operations. Consequently, we do not
currently generate cash flows from which we can make payments on our outstanding
notes. We cannot assure you that we will ever establish an adequate revenue base
or generate enough positive cash flow to provide future capital expenditures and
repayment of debt.
 
    Our indentures permit us to incur substantial additional debt, and we fully
expect to borrow substantial additional funds in the next several years. This
additional indebtedness will further increase the risk of a default unless we
can establish an adequate revenue base and generate sufficient cash flow to
repay our indebtedness.
 
SIGNIFICANT CAPITAL EXPENDITURES WILL DIVERT FUNDS WHICH COULD BE USED TO MAKE
  PAYMENTS ON THE NOTES
 
    We expect to make significant capital expenditures in the future. These
expenditures will divert funds which could be used to make payments on the
notes. In addition to the expenditures required to implement our strategy
discussed under "Business," additional expenditures are likely to include the
potential acquisition of other telecommunications companies and the continued
development and implementation of a comprehensive information technology
platform.
 
IF WE ARE NOT SUCCESSFUL IN RAISING ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO
  BUILD AND MAINTAIN OUR NETWORKS
 
    Building our business will require substantial additional capital spending.
Our capital spending plans have increased dramatically over time, as our
strategy has evolved and our planned network has grown larger and more robust.
Because our anticipated future capital requirements will exceed the $1,244.4
million in cash and marketable securities we had on hand as of March 31, 1999,
the $732.6 million net proceeds we expect to receive from this debt offering and
the $343.8 million in net proceeds we expect to receive from the concurrent
equity offering, we will be required to raise additional capital. If we fail to
raise sufficient capital, we may be required to delay or abandon some of our
planned future expansion or expenditures, which could have a material adverse
effect on our growth and our ability to compete in the telecommunications
services industry and could even result in a payment default on our existing
debt.
 
BECAUSE THE NOTES WILL BE STRUCTURALLY SUBORDINATED TO THE OBLIGATIONS OF OUR
  SUBSIDIARIES, YOU MAY NOT BE FULLY REPAID IF WE BECOME INSOLVENT
 
    Because our cash flows from operations arise at the subsidiary level, all of
our senior notes are structurally subordinated to the debts of our subsidiaries.
Creditors of any NEXTLINK subsidiary, including trade creditors, have and will
have claims that will be senior to the notes with respect to the assets of that
subsidiary. In addition, some of our subsidiaries are subject to capital and
other lease obligations.
 
                                       5
<PAGE>
OUR SUBSIDIARIES MUST MAKE PAYMENTS TO US IN ORDER FOR US TO MAKE PAYMENTS ON
  THE NOTES
 
    We depend upon cash payments from our subsidiaries to meet our fixed-charge
payment obligations, including our obligation to pay you as a holder of notes.
We cannot assure you that our subsidiaries will have sufficient cash to make any
payments to us, as their cash flows from operations are currently negative. Our
indentures generally permit us to invest proceeds from the sale of our debt
securities in subsidiaries and joint ventures that we manage.
 
BECAUSE THE NOTES WILL NOT BE SECURED, YOU MAY NOT BE FULLY REPAID IF WE BECOME
  INSOLVENT
 
    The notes will not be secured by any of the assets of NEXTLINK or its
subsidiaries. Therefore, you may not be fully repaid if we become insolvent.
Moreover, our indentures permit us to incur secured debt. If we were to incur
secured debt and we become insolvent, the holders of the secured debt would
receive payments from the assets used as security before you receive payments.
 
IF WE CANNOT QUICKLY AND EFFICIENTLY INSTALL OUR HARDWARE, WE WILL BE UNABLE TO
  GENERATE REVENUE
 
    Each of our networks consists of many different pieces of hardware,
including switches, routers, fiber optic cables, electronics, and combination
radio transmitter/receivers, known as transceivers, and associated equipment,
which are difficult to install. If we cannot install this hardware quickly, the
time in which customers can be connected to our network and we can begin to
generate revenue from our network will be delayed. You should be aware that the
construction of our national fiber optic network is not under our control, but
is under the control of Level 3 Communications. We cannot assure you that the
Level 3 network will be completed, that it will be placed in service within the
expected time frame or that it will contain the contemplated number of fibers
and conduits throughout the entire network. Failure of Level 3 to complete its
network in a timely manner would delay implementation of our strategy of linking
our local networks to one another and creating an end-to-end national network.
 
IP TECHNOLOGY HAS NOT YET BEEN PERFECTED FOR FULL SERVICE NETWORKS LIKE OURS
 
    We plan to rely on IP technology as the basis for our planned end-to-end
network. Although IP technology is used throughout the Internet, its extension
to support other telecommunications applications, such as voice and video, has
not yet been perfected, and currently has several deficiencies, including poor
reliability and quality. Integrating these technologies into our network may
prove difficult and may be subject to delays. We cannot assure you that these
improvements will become available in a timely fashion or at reasonable cost, if
at all, or that the technology choices we make will prove to be cost effective
and correct.
 
WE MAY NOT BE ABLE TO CONNECT OUR NETWORK TO THE INCUMBENT CARRIER'S NETWORK OR
  TO THE INTERNET ON FAVORABLE TERMS
 
    We require interconnection agreements with the dominant local telephone
company to connect calls between our customers and non-customers. Congress and
our industry refer to this dominant local carrier as the incumbent local
exchange carrier, or the incumbent carrier. We cannot assure you that we will be
able to negotiate or renegotiate interconnection agreements in all of our
markets on favorable terms.
 
    To become an Internet service provider, or ISP, we will require peering
arrangements with other ISPs, particularly the large, national ISPs. While we
anticipate that we will enter into the agreements necessary to become an ISP,
the terms and conditions of these so-called peering agreements are becoming more
restrictive as Internet service becomes increasingly commercialized, and we
cannot be sure that our peering arrangements will be on favorable terms.
 
                                       6
<PAGE>
THE REQUIREMENT THAT WE OBTAIN PERMITS AND RIGHTS-OF-WAY INCREASES OUR COST OF
  DOING BUSINESS
 
    In order for us to acquire and develop our fiber networks, we must obtain
local franchises and other permits, as well as rights-of-way and fiber capacity
from entities such as incumbent carriers and other utilities, railroads, long
distance companies, state highway authorities, local governments and transit
authorities. You should be aware that the process of obtaining these permits and
rights-of-way increases our cost of doing business.
 
    We cannot assure you that we will be able to maintain our existing
franchises, permits and rights-of-way that we need to implement our business.
Nor can we assure you that we will be able to obtain and maintain the other
franchises, permits and rights that we require. A sustained and material failure
to obtain or maintain these rights could materially adversely affect our
business in the affected metropolitan area.
 
OUR DEPLOYMENT OF WIRELESS FIRST MILE CONNECTIONS COULD BE DELAYED BY A LACK OF
  ACCEPTABLE EQUIPMENT AND BY INSTALLATION RISKS
 
    The FCC licensed our broadband wireless spectrum in what it calls the Local
Multipoint Distribution Services, or LMDS. LMDS is a newly-authorized service,
and equipment vendors are only beginning to offer radios, transceivers and
related equipment designed to work at its frequencies. We are testing several
vendors' equipment, but can't be certain that any equipment meeting our
standards will be available in time to meet our development schedule.
 
    LMDS first mile connections require us to obtain access to rooftops from
building owners and to satisfy local construction and zoning rules for antennas
and transmitters. The need to obtain these authorizations could be an additional
source of delay.
 
WE CANNOT ACCURATELY PREDICT THE TOTAL COST OF OUR WIRELESS FIRST MILE
  DEPLOYMENT
 
    Since we have not negotiated final contracts to purchase any LMDS equipment,
we don't know precisely how much the equipment we will need will cost.
Installation costs will vary greatly, depending on the particular
characteristics of the locations to be served. After initial installation, we
expect to incur additional costs to reconfigure, redeploy and upgrade our
wireless first mile as technologies improve.
 
IN LOCAL MARKETS, WE COMPETE AGAINST THE INCUMBENT CARRIER, WHO HAS A VESTED
  INTEREST IN MAKING IT DIFFICULT FOR US TO CONNECT CUSTOMERS TO OUR NETWORK
 
    In each of the local markets served by our networks, we compete principally
with the incumbent carrier in that market.
 
    The incumbent carriers are already established providers of local telephone
services to all or virtually all telephone subscribers within their respective
service areas. The incumbent carriers have begun to provide data services and
are seeking to provide service using DSL technology. Their physical connections
from their premises to those of their customers are expensive and difficult to
duplicate. In addition, they have long-standing relationships with regulatory
authorities at the federal and state levels.
 
    It is expensive and difficult for us to switch a new customer to our network
because:
 
    - a potential customer faces switching costs if it decides to become our
      customer, and
 
    - we require cooperation from the incumbent carrier.
 
    Due to our competitor's advantages, we cannot assure you that we will be
able to compete successfully with the incumbent carriers.
 
                                       7
<PAGE>
WE FACE COMPETITION IN LOCAL MARKETS FROM OTHER CARRIERS, PUTTING DOWNWARD
  PRESSURE ON PRICES
 
    We also face competition from recent and potential market entrants,
including long distance carriers seeking to enter, reenter or expand entry into
the local exchange marketplace such as AT&T, MCI WorldCom and Sprint. This
places downward pressure on prices for local telephone service and for data
services and makes it more difficult for us to achieve positive operating cash
flow. In addition, we expect competition from other companies, such as cable
television companies, electric utilities, microwave carriers, wireless telephone
system operators and private networks built by large end-users. We cannot assure
you that we will be able to compete effectively with these industry
participants.
 
WE FACE COMPETITION IN LONG DISTANCE MARKETS, PUTTING DOWNWARD PRESSURE ON
  PRICES
 
    We also face intense competition from long distance carriers in the
provision of long distance services, which places downward pressure on prices
for long distance service, including both voice and data services, and makes it
difficult for us to achieve positive operating cash flow. Although the long
distance market is dominated by three major competitors, AT&T, MCI WorldCom and
Sprint, hundreds of other companies also compete in the long distance
marketplace. We also anticipate that the incumbent carriers will be competing in
the long distance market in the near future. We cannot assure you that we will
be able to effectively compete with any of these industry participants.
 
WE ALSO FACE COMPETITION IN CREATING A NATIONAL BROADBAND NETWORK
 
    Several of our competitors, such as Qwest, Level 3, IXC and Williams, have
announced an intention to create end-to-end broadband networks that would
compete directly with the network we are building. In addition, the major
long-distance and incumbent local carriers have the ability to do so as well. We
cannot assure you that we will be able to successfully compete with these
service providers.
 
OUR COMPETITION MAY HAVE SUPERIOR RESOURCES, PLACING US AT A COST AND PRICE
  DISADVANTAGE
 
    Many of our current and potential competitors have financial, personnel and
other resources, including brand name recognition substantially greater than
those of NEXTLINK. As a result, some of our competitors can raise capital at a
lower cost than we can. Also, our competitors' greater name recognition may
require us to price our services at lower levels in order to win business.
Finally, our competitors' cost advantages give them the ability to reduce their
prices for an extended period of time if they so choose.
 
OUR COMPANY AND INDUSTRY ARE HIGHLY REGULATED, IMPOSING SUBSTANTIAL COMPLIANCE
  COSTS AND RESTRICTING OUR ABILITY TO COMPETE IN OUR TARGET MARKETS
 
    We are subject to varying degrees of federal, state and local regulation.
This regulation imposes substantial compliance costs on us. It also restricts
our ability to compete. For example, in each state in which we desire to offer
our services, we are required to obtain authorization from the appropriate state
commission. We cannot assure you that we will receive authorization for markets
to be launched in the future.
 
    The NEXTBAND LMDS licenses, described in more detail in "Management's
Discussion and Analysis of Financial Condition and Results of Operations," are
subject to a petition for reconsideration filed by another auction participant.
The petition asks the FCC to revoke and reauction NEXTBAND's licenses. Because
the matter remains pending, we cannot assure you that the FCC will not grant the
petitions and relief sought.
 
THE TECHNOLOGIES THAT WE USE MAY BECOME OBSOLETE, WHICH WOULD LIMIT OUR ABILITY
  TO COMPETE EFFECTIVELY
 
    The telecommunications industry is subject to rapid and significant changes
in technology. If we do not replace or upgrade technology and equipment that
becomes obsolete, we will be unable to compete effectively because we will not
be able to meet the expectations of our customers.
 
                                       8
<PAGE>
    The following technologies and equipment that we use or will use are subject
to obsolescence: wireline and wireless transmission technologies, circuit and
packet switching technologies and data transmission technologies, including the
Nortel DMS 500 switches, DSL, ATM and IP technologies. In addition, we cannot
assure you that the technologies that we choose to invest in will lead to
successful implementation of our business plan.
 
WE MAY BE REQUIRED TO PAY PATENT LICENSING FEES, WHICH WILL DIVERT FUNDS WHICH
  COULD BE USED FOR OTHER PURPOSES
 
    From time to time we receive requests to consider licensing certain patents
held by third parties that may have bearing on our interactive voice response,
other enhanced, or data services. Should we be required to pay license fees in
the future, such payments, if substantial, could have a material adverse effect
on our results of operations.
 
IF WE LOSE KEY PERSONNEL AND QUALIFIED TECHNICAL STAFF, OUR ABILITY TO MANAGE
  THE DAY-TO-DAY ASPECTS OF OUR COMPLEX NETWORK WILL BE WEAKENED
 
    We believe that a critical component for our success will be the attraction
and retention of qualified professional and technical personnel. If we lose key
personnel and qualified technical staff, or are unable to recruit qualified
personnel, our ability to manage the day-to-day aspects of our complex network
will be weakened. You should be aware that we face significant competition in
the attraction and retention of personnel who possess the skill sets that we
seek.
 
    In addition, we must also develop and retain a large and sophisticated sales
force. If we fail to do so, there will be an adverse effect on our ability to
generate revenue and, consequently, our operating cash flow.
 
CRAIG O. MCCAW, WHO WILL CONTROL APPROXIMATELY 57% OF NEXTLINK'S VOTING POWER
  AFTER THE CONCURRENT EQUITY OFFERING, MAY HAVE INTERESTS WHICH ARE ADVERSE TO
  YOUR INTERESTS
 
    Craig O. McCaw, primarily through his majority ownership and control of
Eagle River Investments, LLC, will control approximately 57% of NEXTLINK's total
voting power after giving effect to the additional shares that are expected to
be issued in the concurrent equity offering. Because Mr. McCaw has the ability
to control the direction and future operations of NEXTLINK and has interests in
other companies that may compete with NEXTLINK, he may make decisions which are
adverse to your interests.
 
    In addition to his investment in NEXTLINK through Eagle River, Mr. McCaw has
significant investments in other communications companies, including Nextel
Communications, Teledesic Corporation and INTERNEXT, some of which could compete
with us or act as one of our suppliers of certain telecommunications services.
You should be aware that we do not have a noncompetition agreement with either
Mr. McCaw or Eagle River. Mr. McCaw is not bound by any contracts with NEXTLINK
restricting his future sales of our common stock.
 
WE MAY FACE ADDITIONAL COSTS AND OTHER ADVERSE EFFECTS DUE TO YEAR 2000 ISSUES
 
    To ensure that our computer systems and applications will function properly
beyond 1999, we have implemented a year 2000 program. As part of this program,
we conducted an inventory of network equipment and enterprise systems that
execute primary business processes, such as accounting, service assurance,
service delivery, customer service and billing. We cannot be sure that mission
critical equipment has not been overlooked.
 
    Our determinations whether any systems or applications require modification
or replacement are based in part on statements made to us by vendors used by us
as to the year 2000 compliance of the systems and applications used by us. We
will not be able to independently confirm the accuracy or completeness of these
vendor representations.
 
                                       9
<PAGE>
    Telecommunications and data traffic between our customers who are directly
connected to one of our networks and parties who are not customers of ours are
routed over networks that we do not control. In addition, many of our customers
are connected to one of our networks through facilities of the incumbent
carrier. Consequently, our customers may not be able to complete calls or data
transmissions if the computer, telecommunications and other systems of outside
entities, including local and interexchange carriers and Internet service
providers that interchange traffic, are not year 2000 compliant. A failure by
some or all of these entities to make their systems year 2000 compliant could
create substantial disruptions, which in turn could have a material adverse
effect on our operations.
 
    For further discussion on our year 2000 program, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Impact
of Year 2000" in our Annual Report on Form 10-K for 1998.
 
THIS PROSPECTUS INCLUDES FORWARD-LOOKING STATEMENTS, BUT ACTUAL RESULTS MAY
  DIFFER SIGNIFICANTLY
 
    Some statements and information contained in this prospectus are not
historical facts, but are "forward-looking statements", as such term is defined
in the Private Securities Litigation Reform Act of 1995. We wish to caution you
that these forward-looking statements are only predictions, and actual events or
results may differ materially as a result of risks that we face, including those
set forth herein under "Risk Factors." These forward-looking statements can be
identified by the use of forward-looking terminology such as "believes",
"expects", "plans", "may", "will", "would," "could," "should", or "anticipates"
or the negative of these words or other variations of these words or other
comparable words, or by discussions of strategy that involve risks and
uncertainties. Such forward-looking statements include, but are not limited to:
 
    - the number of markets we expect to serve, the expected number of
      addressable business lines in markets in which we currently provide
      service and the markets in which we expect to provide service;
 
    - our expectations regarding our ability to attract and retain customers;
 
    - our beliefs regarding certain competitive advantages, including that of
      our management structure and provisioning processes and systems;
 
    - our expectation regarding the size of our sales and customer care forces;
 
    - our belief regarding traffic flow over our networks and the effects and
      benefits of high capacity networks with broad coverage based on a uniform
      technology platform;
 
    - our plans to install additional switches, data networking capabilities
      such as IP and ATM facilities and high speed technologies such as DSL;
 
    - our plans to implement wireless first mile connections;
 
    - our ability to maintain technological flexibility;
 
    - our expectation regarding the development of a national network and the
      implementation of a national network end-to-end strategy;
 
    - our anticipated capital expenditures, funding thereof and levels of
      indebtedness and our expectations regarding additional indebtedness; and
 
    - statements with respect to our Year 2000 project.
 
                                       10
<PAGE>
                                USE OF PROCEEDS
 
    We estimate that the net proceeds from the sale of the notes will be
approximately $732.6 million, after deducting the estimated underwriting
discounts and offering expenses.
 
    In the concurrent equity offering, we are offering 4,982,050 shares of Class
A common stock, from which we anticipate net proceeds of approximately $343.8
million, at an assumed offering price of $73.25 per share, after deducting
estimated expenses. This debt offering, however, is not contingent upon
completion of the concurrent equity offering.
 
    We plan to use the net proceeds from this offering, together with our cash
on hand and the net proceeds from the concurrent equity offering, to expand our
existing networks and services, to provide new communications and data services
and implement new technologies, to provide electronics and equipment for our
national network, develop and acquire new networks and services, to potentially
acquire other communications and data services companies. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
 
                                       11
<PAGE>
                                 CAPITALIZATION
           (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
 
    The following table sets forth as of March 31, 1999, the actual
capitalization of NEXTLINK and the capitalization of NEXTLINK as adjusted to
reflect NEXTLINK's sale of notes in this offering, the acquisitions of WNP and
the 50% interest in NEXTBAND that we do not already own, and the concurrent
equity offering. This debt offering is not conditioned on the completion of our
concurrent equity offering.
 
    This table should be read in conjunction with the Selected Historical
Consolidated Financial and Operating Data included elsewhere in this prospectus,
and the audited Consolidated Financial Statements and notes thereto included in
our 1998 Form 10-K, which is incorporated herein by reference.
 
<TABLE>
<CAPTION>
                                                                      AS OF MARCH 31, 1999
                                               ------------------------------------------------------------------
<S>                                            <C>                 <C>             <C>             <C>
                                                                                                    AS ADJUSTED
                                                                                    AS ADJUSTED         FOR
                                                                                        FOR         THE DEBT AND
                                                                                      THE DEBT         EQUITY
                                                                    AS ADJUSTED     OFFERING AND   OFFERINGS, AND
                                                                        FOR         THE WNP AND     THE WNP AND
                                                                      THE DEBT        NEXTBAND        NEXTBAND
                                                     ACTUAL           OFFERING     TRANSACTIONS(3) TRANSACTIONS(3)
                                               ------------------  --------------  --------------  --------------
Cash, cash equivalents and marketable
  securities.................................      $1,244,406       $  1,976,981    $  1,491,489    $  1,835,301
Pledged securities(1)........................          21,821             21,821          21,821          21,821
                                               ------------------  --------------  --------------  --------------
  Total......................................      $1,266,227       $  1,998,802    $  1,513,310    $  1,857,122
                                               ------------------  --------------  --------------  --------------
                                               ------------------  --------------  --------------  --------------
Current portion of long-term obligations.....      $    2,760       $      2,760    $      2,760    $      2,760
Other long-term liabilities..................          16,304             16,304          16,304          16,304
12 1/2% Senior Notes due 2006................         350,000            350,000         350,000         350,000
9 5/8% Senior Notes due 2007.................         400,000            400,000         400,000         400,000
9% Senior Notes due 2008.....................         334,396            334,396         334,396         334,396
9.45% Senior Discount Notes due 2008.........         438,636            438,636         438,636         438,636
10 3/4% Senior Notes due 2008................         500,000            500,000         500,000         500,000
    % Senior Notes due 2009..................              --
    % Senior Discount Notes due 2009.........              --
                                               ------------------  --------------  --------------  --------------
  Total debt.................................       2,042,096          2,792,096       2,792,096       2,792,096
Redeemable Preferred Stock, par value $0.01
  per share, 25,000,000 shares authorized,
  net of issuance costs:
    14% Preferred Shares, 7,508,588 shares
      issued and outstanding.................         375,177            375,177         375,177         375,177
    6 1/2% Cumulative Convertible Preferred
      Stock, 4,000,000 shares issued and
      outstanding............................         194,341            194,341         194,341         194,341
Shareholders' equity (deficit):
  Common stock, par value $.02 per share,
    stated at amounts paid in; Class A,
    110,334,000 shares authorized, 25,712,771
    issued and outstanding (31,428,602 as
    adjusted to reflect the acquisition of
    WNP, and 36,410,652 as further adjusted
    to reflect the sale of common stock in
    the concurrent equity offering); Class B,
    44,133,600 shares authorized, 29,184,372
    shares issued and outstanding(2).........         360,213            360,213         710,651       1,054,463
  Deferred compensation......................         (10,399)           (10,399)        (10,399)        (10,399)
  Accumulated other comprehensive income.....         119,844            119,844         119,844         119,844
  Accumulated deficit........................        (708,504)          (708,504)       (708,504)       (708,504)
                                               ------------------  --------------  --------------  --------------
  Total shareholders' equity (deficit).......        (238,846)          (238,846)        111,592         455,404
                                               ------------------  --------------  --------------  --------------
  Total capitalization.......................      $2,372,768       $  3,122,768    $  3,473,206    $  3,817,018
                                               ------------------  --------------  --------------  --------------
                                               ------------------  --------------  --------------  --------------
</TABLE>
 
- ------------------------------
 
(1) Pledged U.S. Treasury securities, which represent funds sufficient to
    provide for payment in full of interest through April 15, 1999 on NEXTLINK's
    12 1/2% Senior Notes due April 15, 2006.
 
(2) Issued and outstanding does not include 11,582,405 and 654,858 shares of
    Class A common stock and Class B common stock, respectively, issuable upon
    exercise of outstanding options as of March 31, 1999.
 
(3) The acquisition of WNP closed on April 26, 1999. We expect the NEXTBAND
    transaction to close shortly after the closing of the concurrent equity
    offering.
 
                                       12
<PAGE>
         SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
    The summary historical consolidated financial data below as of March 31,
1999 and for the three-month periods ended March 31, 1998 and 1999 have been
derived from our unaudited interim consolidated financial statements. In
management's opinion, the unaudited interim consolidated financial statements
have been prepared on the same basis as the audited financial statements and
include all adjustments, which consist only of normal recurring adjustments,
necessary for a fair presentation of our financial position and results of
operations. Operating results for the three-month period ended March 31, 1999
are not necessarily indicative of the results that may be expected for the full
year ended December 31, 1999.
 
<TABLE>
<CAPTION>
                                                                                                     THREE MONTHS ENDED MARCH
                                                           YEAR ENDED DECEMBER 31,                             31,
                                          ---------------------------------------------------------  ------------------------
<S>                                       <C>        <C>        <C>        <C>          <C>          <C>          <C>
                                            1994       1995       1996        1997         1998         1998         1999
                                          ---------  ---------  ---------  -----------  -----------  -----------  -----------
CONSOLIDATED STATEMENT OF OPERATIONS
  DATA:
Revenue.................................  $      --  $   7,552  $  25,686  $    57,579  $   139,667  $    26,545  $    48,586
Costs and expenses:
  Operating.............................        106      6,618     25,094       54,031      123,675       24,550       43,699
  Selling, general and administrative...        232      9,563     31,353       75,732      156,929       31,957       52,334
  Deferred compensation.................         --        375      9,914        3,247        4,993          624        1,059
  Depreciation and amortization.........         14      3,458     10,340       27,190       60,254       10,183       22,853
                                          ---------  ---------  ---------  -----------  -----------  -----------  -----------
Loss from operations....................       (352)   (12,462)   (51,015)    (102,621)    (206,184)     (40,769)     (71,359)
Interest expense, net...................          3       (269)   (20,086)     (26,383)     (72,156)     (11,543)     (30,927)
                                          ---------  ---------  ---------  -----------  -----------  -----------  -----------
Net loss................................  $    (349) $ (12,731) $ (71,101) $  (129,004) $  (278,340) $   (52,312) $  (102,286)
                                          ---------  ---------  ---------  -----------  -----------  -----------  -----------
                                          ---------  ---------  ---------  -----------  -----------  -----------  -----------
Net loss applicable to common shares....  $    (349) $ (12,731) $ (71,101) $  (168,324) $  (337,113) $   (63,863) $  (118,886)
                                          ---------  ---------  ---------  -----------  -----------  -----------  -----------
                                          ---------  ---------  ---------  -----------  -----------  -----------  -----------
Net loss per share......................                        $   (1.81) $     (3.91) $     (6.26) $     (1.19) $     (2.17)
                                                                ---------  -----------  -----------  -----------  -----------
                                                                ---------  -----------  -----------  -----------  -----------
 
OTHER DATA:
Ratio of earnings to fixed charges(1)...         --         --         --           --           --           --           --
EBITDA(2)...............................  $    (338) $  (8,629) $ (30,761) $   (72,184) $  (140,937) $   (29,962) $   (47,447)
Capital expenditures, including
  acquisitions of businesses (net of
  cash acquired) and investments in
  affiliates (3)........................  $     600  $  49,230  $  85,872  $   232,069  $   416,445  $    44,501  $   112,051
</TABLE>
 
                                       13
<PAGE>
<TABLE>
<CAPTION>
                                                                                              AS OF MARCH 31, 1999
                                                                                   -------------------------------------------
                                                                                                                 AS ADJUSTED
                                                                                                                 FOR THE DEBT
                                                                                                                 OFFERING AND
                                                                                                                 THE WNP AND
                                           AS OF DECEMBER 31,                                    AS ADJUSTED       NEXTBAND
                        ---------------------------------------------------------                FOR THE DEBT    TRANSACTIONS
                          1994       1995       1996        1997         1998        ACTUAL        OFFERING          (5)
                        ---------  ---------  ---------  -----------  -----------  -----------  --------------  --------------
<S>                     <C>        <C>        <C>        <C>          <C>          <C>          <C>             <C>
CONSOLIDATED BALANCE
  SHEET DATA:
Cash, cash equivalents
  and marketable
  securities..........  $      25  $   1,350  $ 124,520  $   742,357  $ 1,478,062  $ 1,244,406   $  1,976,981    $  1,491,489
Pledged
  securities(4).......         --         --    101,438       62,610       21,500       21,821         21,821          21,821
Working capital.......         14     (6,232)   137,227      744,510    1,408,501    1,195,396      1,927,971       1,442,479
Property and
  equipment, net......        134     29,664     97,784      253,653      594,408      701,546        701,546         701,546
Total assets..........        690     53,461    390,683    1,219,978    2,483,106    2,506,678      3,256,678       3,607,116
Long-term debt........         --      1,590    356,262      750,000    2,013,192    2,023,032      2,773,032       2,773,032
Redeemable preferred
  stock, net of
  issuance costs......         --         --         --      313,319      556,168      569,518        569,518         569,518
Equity units subject
  to redemption.......         --         --      4,950           --           --           --             --              --
Class B common stock
  subject to
  redemption..........         --         --         --        4,950           --           --             --              --
Total stockholders'
  equity (deficit)....        672     36,719    (18,654)      71,285     (246,463)    (238,846)      (238,846)        111,592
 
<CAPTION>
 
                         AS ADJUSTED
                         FOR THE DEBT
                          AND EQUITY
                        OFFERINGS, AND
                         THE WNP AND
                           NEXTBAND
                         TRANSACTIONS
                             (5)
                        --------------
<S>                     <C>
CONSOLIDATED BALANCE
  SHEET DATA:
Cash, cash equivalents
  and marketable
  securities..........   $  1,835,301
Pledged
  securities(4).......         21,821
Working capital.......      1,786,291
Property and
  equipment, net......        701,546
Total assets..........      3,950,928
Long-term debt........      2,773,032
Redeemable preferred
  stock, net of
  issuance costs......        569,518
Equity units subject
  to redemption.......             --
Class B common stock
  subject to
  redemption..........             --
Total stockholders'
  equity (deficit)....        455,404
</TABLE>
 
- --------------------------
 
(1) For the years ended December 31, 1994, 1995, 1996, 1997 and 1998, and for
    the three-month periods ended March 31, 1998 and 1999, earnings were
    insufficient to cover fixed charges during the periods presented by the net
    loss amounts of $349, $12,731, $71,101, $129,004, $278,340, $52,312 and
    $102,286, respectively.
 
(2) EBITDA consists of net loss before net interest expense, depreciation,
    amortization and deferred compensation expense. EBITDA is commonly used to
    analyze companies on the basis of operating performance, leverage and
    liquidity. While EBITDA should not be construed as a substitute for
    operating income or a better measure of liquidity than cash flow from
    operating activities, which are determined in accordance with generally
    accepted accounting principles, it is included herein to provide additional
    information with respect to our anticipated ability to meet future debt
    service, capital expenditures and working capital requirements.
 
(3) Total capital expenditures, acquisitions, and investments in affiliates were
    funded as follows:
 
<TABLE>
<CAPTION>
                                                                                                   THREE MONTHS ENDED
                                                          YEAR ENDED DECEMBER 31,                      MARCH 31,
                                           -----------------------------------------------------  --------------------
<S>                                        <C>        <C>        <C>        <C>        <C>        <C>        <C>
                                             1994       1995       1996       1997       1998       1998       1999
                                           ---------  ---------  ---------  ---------  ---------  ---------  ---------
    Cash expended........................  $     600  $  35,417  $  72,042  $ 210,545  $ 416,445  $  44,501  $ 112,051
    Debt issued and assumed..............         --      6,554      8,228      5,000         --         --         --
    Equity issued........................         --      7,259      5,602     16,524         --         --         --
                                           ---------  ---------  ---------  ---------  ---------  ---------  ---------
    Total................................  $     600  $  49,230  $  85,872  $ 232,069  $ 416,445  $  44,501  $ 112,051
                                           ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                           ---------  ---------  ---------  ---------  ---------  ---------  ---------
</TABLE>
 
(4) Pledged U.S. Treasury securities, which represent funds sufficient to
    provide for payment in full of interest through April 15, 1999 on our
    12 1/2% Senior Notes.
 
(5) The acquisition of WNP closed on April 26, 1999. We expect the NEXTBAND
    transaction to close shortly after the closing of the concurrent equity
    offering.
 
                                       14
<PAGE>
    The operating data contained in the table below includes the statistics of
our Las Vegas network, which we manage and in which we have a 40% membership
interest. Terms used in this table are defined as follows:
 
    A "route mile" measures the expansiveness of our network, and is equal to
the number of physical miles along which we have installed or leased fiber optic
cable.
 
    A "fiber strand" is an advanced fiber optic line which can carry a large
volume of data transmissions and voice communications. The number of "fiber
miles" that we have installed is equal to our estimate of the number of fiber
strands that we have installed along our network, multiplied by the number of
route miles covered by our network. It is a measure of our carrying capacity of
large volumes of data transmissions and voice communications.
 
    "On-net buildings connected" means buildings physically connected to our
network, excluding those buildings which are connected to our network by
facilities leased from the incumbent telephone company. "Off-net buildings
connected" are those buildings connected to our network by facilities leased
from the incumbent or other carriers.
 
    "Switches" are electronic devices that route data transmissions and voice
communications to their final destination. All switch counts include two long
distance switches acquired in 1996 as well as the switch installed in NEXTLAB,
our telecommunications and data testing facility.
 
    An "access line" is a telephone connection between a customer purchasing
local telephone services and our facilities. This definition of access lines is
adjusted to reflect the fact that some high performance connections, known as
primary rate interface, can carry comparatively larger volumes of data and voice
communications. Lines over which primary rate interface service is provided are
counted as 23 access lines. The number of "access lines installed" represents
the number of access lines for which NEXTLINK is billing services. This number
includes access lines that are provisioned through the resale of services. We
serviced 2,894 resold access lines as of March 31, 1999.
 
<TABLE>
<CAPTION>
                                                   AS OF       AS OF         AS OF         AS OF        AS OF
                                                 MARCH 31,    JUNE 30,   SEPTEMBER 30,  DECEMBER 31,  MARCH 31,
                                                    1998        1998         1998           1998         1999
                                                 ----------  ----------  -------------  ------------  ----------
<S>                                              <C>         <C>         <C>            <C>           <C>
OPERATING DATA:
Route miles....................................       2,036       2,099         2,150         2,477        2,897
Fiber miles....................................     141,788     152,225       158,987       195,531      223,463
On-net buildings connected.....................         571         658           736           801          854
Off-net buildings connected....................       5,947       8,448         9,688        13,443       13,950
Switches installed.............................          14          17            18            21           22
Access lines installed.........................      72,834     102,887       134,107       174,182      224,713
Employees......................................       1,499       1,756         2,065         2,299        2,539
</TABLE>
 
                                       15
<PAGE>
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
 
RESULTS OF OPERATIONS
 
    THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THREE MONTHS ENDED MARCH 31,
     1998
 
    For the three months ended March 31, 1999, total revenue was $48.6 million,
an 83% increase over the $26.5 million in revenue reported in the first quarter
of 1998.
 
    NEXTLINK's core services revenue, which consists of bundled local and long
distance and dedicated services, rose 217% over the same period in 1998 to $34.9
million in the first quarter of 1999.
 
    The increase in core services revenue was driven by the increasing number of
access lines installed during the first quarter. NEXTLINK installed 50,531
access lines during the first quarter of 1999, compared to 22,703 access lines
added during the first quarter of 1998. Total access lines installed was 224,713
as of March 31, 1999.
 
    YEAR ENDED DECEMBER 31, 1998 COMPARED WITH YEAR ENDED DECEMBER 31, 1997
 
    Revenue increased 143% to $139.7 million in 1998 from $57.6 million in 1997.
The increase was driven by 277% growth in revenues from bundled local and long
distance services and dedicated services. The acquisitions of Start
Technologies, a shared tenant services provider, and Chadwick
Telecommunications, a switch-based long distance service reseller, in the fourth
quarter of 1997, also contributed to this increase. Revenue reported consisted
of the following components (in thousands):
 
<TABLE>
<CAPTION>
                                                                            1998       1997
                                                                         ----------  ---------
<S>                                                                      <C>         <C>
Bundled local and long distance services and dedicated services........  $   76,654  $  20,342
Shared tenant services.................................................      12,781      2,018
Long distance telephone services.......................................      26,937     16,478
Enhanced services......................................................      23,295     18,741
                                                                         ----------  ---------
                                                                         $  139,667  $  57,579
                                                                         ----------  ---------
                                                                         ----------  ---------
</TABLE>
 
Enhanced services revenue consists primarily of revenue generated from our
interactive voice response services.
 
    We began offering switched local and long distance services in our first
seven markets in July 1996, in 18 markets during 1997 and 12 additional markets
during 1998. In addition, since January 1995 we have offered private, leased
line, or dedicated services.
 
    Our quarterly installation rate of customer access lines increased from
19,187 in the fourth quarter of 1997 to 40,075 during the fourth quarter of
1998. At December 31, 1998, we had 174,182 access lines in service, compared to
50,131 as of December 31, 1997.
 
    Operating expenses consist of costs directly related to providing
facilities-based network and enhanced communications services and also include
salaries and benefits and related costs of operations and engineering personnel.
Operating expenses increased 129% in 1998 to $123.7 million, an increase of
$69.6 million over the same period in 1997. These increases primarily resulted
from:
 
    - increased network costs related to provisioning higher volumes of local,
      long distance and enhanced communications services;
 
    - an increase in the number of our employees; and
 
                                       16
<PAGE>
    - an increase in other related costs primarily to expand our switched local
      and long distance service businesses in our existing and planned markets.
 
To a lesser extent, the acquisitions of Start and Chadwick in the fourth quarter
of 1997 also contributed to the increase in operating costs over those in 1997.
 
    Selling, general and administrative expenses include salaries and related
personnel costs, facilities expenses, sales and marketing, information systems
costs, consulting and legal fees and equity in losses of affiliates. Selling,
general and administrative expenses increased 107% for the year ended December
31, 1998 as compared to the corresponding period in 1997. The increase was
primarily due to an increase in the number of our employees, as well as other
costs associated with the expansion of our switched local and long distance
service businesses in our existing and planned markets.
 
    We recorded deferred compensation expense in connection with options granted
under our Equity Option Plan until April 1997, and our Stock Option Plan, which
replaced the Equity Option Plan, subsequent to April 1997. The stock options
granted under the Equity Option Plan were considered compensatory and we
accounted for them on a basis similar to that used for stock appreciation
rights. All options outstanding under the Equity Option Plan were regranted
under the Stock Option Plan with terms and conditions substantially the same as
under the Equity Option Plan. As a result, we continue to record deferred
compensation expense for the compensatory stock options issued under both plans
over their vesting periods, based on the excess of the fair value at the date of
grant over their exercise prices.
 
    Depreciation expense increased primarily due to placement in service of
additional telecommunications network assets, including switches, fiber optic
cable, network electronics and related equipment. We expect depreciation expense
to continue to increase as we expand our networks and install additional
switches and related equipment. Amortization of intangible assets increased
primarily as a result of the Start and Chadwick acquisitions in the fourth
quarter of 1997.
 
    Interest expense increased 165% in 1998 over the prior year due to an
increase in our average outstanding indebtedness over this period. Interest
expense will increase in future periods as a result of our issuing $500.0
million in aggregate principal amount of 10 3/4% Senior Notes in November 1998.
Statement of Financial Accounting Standards No. 34 requires us to capitalize a
portion of our interest costs as part of the construction cost of our
communications networks. Capitalized interest during 1998 totaled $4.3 million.
Our interest income resulted from investment of excess cash and certain
securities pledged as collateral to secure repayment of our 12 1/2% Senior
Notes. The increase in interest income in 1998 over 1997 corresponded to the
increase in our average outstanding cash balances.
 
    YEAR ENDED DECEMBER 31, 1997 COMPARED WITH YEAR ENDED DECEMBER 31, 1996
 
    Revenue increased 124% to $57.6 million in 1997 from $25.7 million in the
same period in 1996. The increase was primarily due to 45% growth in our local
and long distance services (both switched and resale), dedicated services and
enhanced communications services. The increase was also attributable to the fact
that we recorded a full year's revenue from ITC, a switch-based long distance
reseller we acquired in December 1996. To a lesser extent, our acquisitions of
Start and Chadwick in the fourth quarter of 1997 also contributed to the
increase in revenue. Revenues reported in 1997 included $38.9 million derived
from local and long distance, competitive access, dedicated line services and
shared tenant services and $18.7 million derived from enhanced communications
services. Our interactive voice response subsidiary contributed 27% and 52% of
our revenues during 1997 and 1996, respectively.
 
    Our quarterly rate for installing customer access lines increased from 1,604
in the fourth quarter of 1996 to 19,187 during the fourth quarter of 1997. As of
December 31, 1997, we had 50,131 access lines
 
                                       17
<PAGE>
in service, compared to 8,511 as of December 31, 1996. Access lines in service
includes lines provided through resale of Centrex services.
 
    Operating expenses increased 115% in 1997 to $54.0 million, an increase of
$28.9 million over the same period in 1996. This increase resulted primarily
from:
 
    - an increase in network costs related to the provision of increased volumes
      of local, long distance and enhanced communications services;
 
    - an increase in the number of our employees; and
 
    - an increase in other related costs primarily to expand our switched local
      and long distance service businesses in our existing and planned markets.
 
Additionally, the effects of the ITC acquisition in December 1996 and the Start
and Chadwick acquisitions in the fourth quarter of 1997 further contributed to
the increase in 1997 operating expenses over those of the prior year.
 
    Selling, general and administrative expenses increased 142% for the year
ended December 31, 1997 as compared to the corresponding period in 1996. The
increase was primarily due to:
 
    - an increase in the number of our employees;
 
    - other costs associated with the expansion of our switched local and long
      distance service businesses in our existing and planned markets; and
 
    - the ITC acquisition.
 
    We recorded deferred compensation expense in connection with options granted
under our Equity Option Plan until April 1997, and our Stock Option Plan, which
replaced the Equity Option Plan, subsequent to April 1997. All options
outstanding under the Equity Option Plan were regranted under the Stock Option
Plan with terms and conditions substantially the same as under the Equity Option
Plan. The stock options granted under the Equity Option Plan were compensatory
and were accounted for on a basis similar to that used for stock appreciation
rights. As a result, we continued to record deferred compensation expense for
the compensatory stock options issued under both plans over their vesting
periods, based on the excess of the fair value at the date of grant over their
exercise price.
 
    Depreciation expense increased primarily due to placement in service of
additional telecommunications network assets, including switches, fiber optic
cable, network electronics and related equipment. Amortization of intangible
assets increased primarily as a result of the ITC acquisition in December 1996,
as well as our acquisitions of Start, Chadwick and Linkatel Pacific in 1997.
Linkatel Pacific owned and operated a fiber optic network that provided
communication services to customers in portions of Orange and Los Angeles
counties.
 
    Interest expense increased 76% in 1997 over the prior year due to an
increase in our average outstanding indebtedness over the respective periods,
primarily relating to the 12 1/2% and 9 5/8% senior notes we issued in April
1996 and October 1997, respectively. Statement of Financial Accounting Standards
No. 34 requires us to capitalize a portion of our interest costs as part of the
construction cost of our communications networks. Capitalized interest during
1997 totaled $1.8 million. Our interest income resulted from investment of
excess cash as well as certain securities that have been pledged as collateral
to secure repayment of our 12 1/2% Senior Notes. The increase in interest income
in 1997 over 1996 corresponded to the increase in our average outstanding cash
balances.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Our business is capital intensive and, as such, has required and will
continue to require substantial capital investment. We build high capacity
networks with broad market coverage, a strategy that initially
 
                                       18
<PAGE>
increases our level of capital expenditures and operating losses and requires us
to make a substantial portion of our capital investment before we realize any
revenue from them. These capital expenditures, together with the associated
early operating expenses, will continue to result in negative cash flow unless
and until we are able to establish an adequate customer base. We believe,
however, that over the long term this strategy will enhance our financial
performance by increasing the traffic flow over our networks.
 
    During 1998, we used $174.5 million in cash for operating activities,
compared to $97.3 million used in 1997 and $40.6 million used in 1996. The
increase was primarily due to a substantial increase in our activities
associated with the continued development and expansion of switched local and
long distance service operations. In addition, during 1998, we invested an
additional $508.4 million in property and equipment, acquisitions of
telecommunications assets and equity investments in telecommunications
businesses. During 1997 and 1996, we invested $210.5 million and $78.0 million,
respectively, in property and equipment, acquisitions of telecommunications
assets and businesses and equity investments in telecommunications businesses.
 
    Our current 1999 and 2000 plans call for approximately $2,000 million in
total capital expenditures (including the commitments of the INTERNEXT joint
venture described below), of which $112.1 million was spent in the first quarter
of 1999. Our actual capital spending may be higher or lower than these amounts.
We expect to make substantial capital expenditures relating to our existing and
planned network development and operations. These expenditures include:
 
    - the purchase and installation of switches, routers, servers and other
      data-related equipment and related electronics in existing networks and in
      networks to be constructed or acquired in new or adjacent markets;
 
    - the purchase and installation of fiber optic cable and electronics to
      expand existing networks and develop new networks, including the
      connection of new buildings;
 
    - the development of our comprehensive information technology platform;
 
    - the purchase and installation of equipment associated with the deployment
      of LMDS using our LMDS spectrum;
 
    - funding of the INTERNEXT venture described below, and related expenses we
      expect to incur in building our national network; and
 
    - the purchase and installation of equipment associated to deployment of
      DSL.
 
    - the funding of operating losses and working capital.
 
    Our strategic plan calls also for expansion into additional market areas.
This expansion will require significant additional capital for:
 
    - potential acquisitions of businesses or assets;
 
    - design, development and construction of new networks; and
 
    - the funding of operating losses and working capital during the start-up
      phase of each market.
 
    As of March 31, 1999, we had unrestricted cash and investments of $1,244.4
million, $1,977.0 million on a pro forma basis after giving effect to this debt
offering, and $2,320.8 million on a pro forma basis after giving effect to this
debt offering and the concurrent equity offering.
 
    In April 1999, we acquired WNP Communications, Inc. for $698.2 million. Of
this amount, $157.7 million was paid in cash to the FCC for license fees,
including interest. The remainder was paid to stockholders of WNP, and consisted
of $190.1 million cash and 5,715,831 shares of Class A common stock. In this
transaction, we acquired 39 A block LMDS wireless licenses covering an area
where
 
                                       19
<PAGE>
approximately 98 million people live and work and one B block LMDS wireless
license covering an area where approximately 16 million people live or work. We
plan to use the fixed wireless licenses acquired in the WNP transaction to
extend the reach of our fiber networks and to connect additional customers
directly to our fiber networks. Deploying the technologies associated with our
LMDS strategy will require additional capital expenditures.
 
    In January 1998, we formed NEXTBAND, a joint venture that is owned 50% each
by us and Nextel. NEXTBAND owns LMDS licenses in 42 markets throughout the U.S.
On March 30, 1999, we entered into a definitive agreement to acquire Nextel's
50% interest in NEXTBAND for approximately $137.7 million, consisting of at
least $68.9 million in cash, with the remainder payable at our election in cash
or shares of Class A common stock. The purchase price was determined based on a
formula derived from the purchase price paid in the WNP merger. The minimum cash
consideration will increase by an amount equal to 25% of the proceeds NEXTLINK
receives in the concurrent equity offering up to the amount of the total
purchase price.
 
    In January 1999, we entered into a strategic agreement with Covad
Communications Group, Inc., a leading provider of high-speed digital
communications services using DSL technology. Pursuant to this agreement, we
will become a preferred provider to Covad for local transport and colocation
services for Covad's regional data centers. We also invested $20.0 million in
Covad under this agreement, and Covad will become a preferred provider to us of
DSL services, where we elect not to provide such services ourselves.
 
    In July 1998, we formed INTERNEXT L.L.C., which is beneficially owned 50%
each by us and Eagle River Investments L.L.C., and is managed by us. INTERNEXT
entered into an agreement with Level 3 Communications, Inc. Level 3 is
constructing a national fiber optic network that is expected to cover more than
16,000 route miles with six or more conduits and connect 50 cities in the United
States and Canada. Pursuant to this agreement, INTERNEXT will receive an
exclusive interest in 24 fibers in a shared, filled conduit, one entire empty
conduit and the right to 25% of the fibers pulled through the sixth and any
additional conduits in the network. INTERNEXT will pay $700.0 million in
exchange for these rights, the majority of which will be payable as segments of
the network are completed and accepted by INTERNEXT, which is expected to occur
substantially during 2000 and 2001. NEXTLINK has guaranteed 50% of the financial
obligations of INTERNEXT under this agreement and, together with Eagle River,
has also guaranteed the performance of certain other obligations of INTERNEXT.
 
    In addition, our operating flexibility with respect to certain business
matters is, and will continue to be, limited by covenants associated with our
outstanding senior notes. Among other things, these covenants limit the ability
of us and our subsidiaries to incur additional indebtedness, create liens upon
assets, apply the proceeds from the disposal of assets, make dividend payments
and other distributions on capital stock and redeem capital stock. A covenant in
the indenture for the 10 3/4% senior notes, requires us to use the net proceeds
from the sale of those notes to fund not more than 80% of the cost of
expenditures relating to the construction, improvement and acquisition of new
and existing networks and services and direct or indirect investments in certain
joint ventures, including NEXTBAND and INTERNEXT, and to fund similar
expenditures. We expect to fund the remainder of these costs with the proceeds
of equity offerings.
 
    In addition, the terms of our 14% Senior Exchangeable Redeemable Preferred
Stock contain covenants that may limit our flexibility in incurring additional
indebtedness and issuing additional preferred shares. We were in compliance with
all covenants associated with our notes and the 14% preferred stock as of March
31, 1999.
 
                                       20
<PAGE>
                                    BUSINESS
 
    Since 1996, NEXTLINK has provided high-quality telecommunications services
to the rapidly growing business market. To serve our customers' broad and
expanding telecommunications needs, we have assembled a unique collection of
high-bandwidth, local and national network assets.
 
    These assets include:
 
    - 23 broadband local networks operating in 14 states, the number of which is
      increasing as we continue to build additional networks;
 
    - high-capacity fixed broadband spectrum covering 52 cities including 95% of
      the population of the 30 largest U.S. cities; and
 
    - exclusive interests in a national fiber optic network now being built that
      will connect all of the largest cities that our current and planned local
      networks serve.
 
    We intend to integrate these assets into a seamless network that will
support the most advanced communications technologies available, and make us the
provider best positioned to deliver the broad variety of data and voice
applications our customers require.
 
BUSINESS STRATEGY
 
    Our goal is to provide integrated, end-to-end solutions for all of our
customers' communications needs over our own network. We plan to deliver these
solutions primarily through equipment and networks we own and therefore continue
to be a facilities-based carrier. The key components of our strategy to achieve
this goal are to:
 
    - BUILD BROADBAND LOCAL NETWORKS. We build high-bandwidth local networks
      using fiber optic cable bundles, which are capable of carrying high
      volumes of data, voice, video and Internet traffic as well as other high
      bandwidth services. In our newer markets, we install up to 400 fiber
      strands in each network, with built-in capacity for future growth. We plan
      to have completed broadband local networks in most of the nation's 30
      largest cities by the end of 2000.
 
    - INCREASE CUSTOMER FIRST MILE CONNECTIONS. We generally build our networks
      in the central business districts of our markets to permit direct
      connections to a high percentage of the area's commercial buildings. For
      buildings where direct fiber connections to our networks are not economic,
      we will use our wireless spectrum to make broadband first mile connections
      where appropriate.
 
    - CREATE AN INTEGRATED, END-TO-END, FACILITIES-BASED NATIONAL NETWORK. We
      will use our interest in a national fiber optic network now under
      construction to offer end-to-end services over our own facilities, rather
      than lines leased from others. This network will be able to operate at
      very high speeds in order to meet our customers' current and future
      broadband data needs.
 
    - DEPLOY NEW TECHNOLOGY OPTIMIZED FOR IP. We are adding IP and ATM routers
      and switches to our network to meet our customers' growing data needs. We
      believe that future IP technologies will gradually replace ATM and enable
      our network to carry all types of communications traffic: data, voice and
      video.
 
    - INTRODUCE NEW INTERNET SERVICES. In addition to high-speed Internet
      access, we plan to offer customers secure, robust web hosting services at
      our central offices, and provide extensive back-office support for their
      e-commerce operations.
 
    - BUILD ON OUR CUSTOMER BASE, STAFF, AND SYSTEMS TO SUCCEED IN THE DATA
      SERVICES MARKET. We will apply the strategies and skills we have developed
      competing successfully in the local exchange market to the expanding data
      services market. These include a focus on the business customer,
 
                                       21
<PAGE>
      decentralized, local management, close attention to customer care and
      effective, reliable back-office systems.
 
    - ATTRACT AND RETAIN EXPERIENCED MANAGEMENT AT ALL KEY LEVELS. Under the
      leadership of Craig McCaw, we have retained highly-qualified senior
      management. Experienced technology industry executives will lead the
      implementation of our data strategy. Seasoned industry entrepreneurs and
      executives run our regional groups and operating subsidiaries.
 
OUR NETWORK
 
    We have built, and are continuing to build, operational fiber optic networks
with robust capacity in urban centers across the country. Our IP-optimized
national network will connect these local networks to one another. Our fiber
optic and wireless first mile connections will complete our goal of becoming an
end-to-end, facilities-based provider of broadband communications services.
 
    LOCAL FIBER OPTIC NETWORKS
 
    The core of each of our local networks is a ring of fiber optic cable in the
city's central business district that connects to our central offices. These
facilities contain the switches and routers that direct data and voice traffic
to their destinations, and also have the space to house the additional equipment
necessary for future telecommunications services.
 
    We are now operating 23 local networks in 38 cities. We serve larger cities,
such as New York, Los Angeles, Chicago, Atlanta, the San Francisco Bay Area,
Denver, Dallas and Miami, medium-sized markets, such as Salt Lake City and
Nashville, and clusters of smaller markets in Orange County, California and
central Pennsylvania.
 
    Based on our recent successes in operating and expanding our existing
networks, as well as new opportunities in other markets, we are pursuing an
aggressive growth plan. We are currently building additional local networks, and
plan to have operational networks in most of the 30 largest U.S. cities by the
end of 2000. We launched telephone service in San Diego earlier this year, and
the next phase of our expansion plan includes the launch of service in
Washington, D.C. and Seattle in the second quarter of 1999, and in Newark,
Detroit, Boston, Phoenix and Houston by the end of 1999.
 
    We build high capacity networks using a backbone density ranging between 72
and 432 strands of fiber optic cable. Each fiber strand has the capacity, or
bandwidth, to carry over 100,000 times the amount of traffic as a strand of
traditionally-configured copper wire. We believe that installing high-count
fiber strands will allow us to offer a higher volume of broadband and voice
services without incurring significant additional construction costs.
 
    We design wide, expansive networks, rather than a simple core fiber optic
ring in a downtown metropolitan area. This design maximizes the number of
customers that can be connected directly to our networks with fiber strands that
we own. We believe that controlling first mile connections is critical to being
able to meet our customers' complete communications requirements and by
controlling the first mile we enhance our ability to:
 
    - ensure technological support for high bandwidth communications;
 
    - manage and control the quality of services used by our customers;
 
    - meet the varying bandwidth needs of our customers; and
 
    - achieve better operating margins.
 
                                       22
<PAGE>
    BROADBAND WIRELESS SPECTRUM
 
    We intend to reduce our reliance on first mile connections leased from the
incumbent carrier by increasing the number of customers connected directly to
our networks. In some cases, we will construct a new fiber optic extension from
the customer's premises to our network. In other cases, we will deploy a
high-bandwidth wireless connection between an antenna on the roof of the
customer's premises and an antenna attached to our fiber rings. These wireless
connections offer high-quality broadband capacity and often cost less to
install. We expect to deploy wireless first mile extensions in 25 markets by the
end of 2000.
 
    Through a series of auction bids and acquisition transactions, we have
become the largest holder of broadband fixed wireless spectrum in North America.
We hold licenses to 1,150 to 1,300 MHz of LMDS spectrum in 52 cities, covering
areas where 95 percent of the population the 30 largest U.S. cities live or
work. Our spectrum assets are very large in comparison to cellular and PCS
licenses (up to 30 MHz) and to other fixed wireless licenses (80-400 MHz ). Our
licenses also include 150 MHz of LMDS spectrum in 13 smaller cities. We believe
that, for many locations, broadband wireless connections from customer buildings
to our local fiber optic networks will offer a lower cost solution for providing
high-quality broadband services than fiber or copper extensions.
 
    LMDS is a newly authorized fixed broadband service that the license holder
may use to provide high-speed data transfer, wireless local telephone service,
wireless transmission of telephone calls in bulk quantity, video broadcasting
and videoconferencing, in any combination. This spectrum is not suitable for
portable telephones, but can transmit voice, data or video signals from one
fixed antenna to many others. As the word "local" in the local multipoint
distribution service name implies, the radio links provided using LMDS
frequencies are of limited distance, typically of a few miles or less, due to
the degradation of these high-frequency signals over distances greater than a
few miles.
 
    A wireless connection typically consists of paired antennas generally placed
at a distance of approximately 2.5 miles from one another with a direct,
unobstructed line of sight. The antennas are typically installed on rooftops,
towers or windows. Point-to-multipoint technology allows a single hub site
antenna to be used to form multiple paths with antennas located on numerous
customer buildings. As few as four hub site antennas can provide
telecommunications connections to buildings in all directions that have line of
sight visibility.
 
    Wireless local loop technology typically utilizes millimeter wave
transmissions having narrow beam width, reducing the potential for channel
interference and allowing dense deployment and channel re-use. This means that,
like cellular technology, LMDS sites can be split into sectors in order to
increase the available capacity. The large amount of capacity in each channel
permits the simultaneous use of multiple voice and data applications. Properly
deployed, wireless local loop technology can substantially reduce the cost of
connecting customers to a network.
 
    LMDS and other wireless broadband services require a direct line of sight
between two antennas comprising a link and are subject to distance and rain
attenuation. We expect that the average coverage radius of a base station will
be up to approximately 2.5 miles, depending on local conditions, and we expect
that our base stations will utilize power control to increase signal strength
and mitigate the effects of rain attenuation. In areas of heavy rainfall,
transmission links will be engineered for shorter distances and greater power to
maintain transmission quality. This reduction of path link distances to maintain
transmission quality requires more closely spaced transceivers and therefore
tends to increase the cost of service coverage.
 
    Due to line of sight limitations, we currently plan to install our
transceivers and antennas on the rooftops of buildings. Line of sight and
distance limitations generally do not present problems in urban areas, provided
that suitable roof rights can be obtained, due to the existence of unobstructed
structures from which to transmit and the concentration of customers within a
limited area. Line of
 
                                       23
<PAGE>
sight and distance limitations in non-urban areas can arise due to lack of
structures with sufficient height to clear local obstructions. We may have to
plan to construct intermediate links or use other means to resolve line of sight
and distance issues. These limitations, however, may render point-to-multipoint
links uneconomical in certain locations.
 
    In order to obtain the necessary access to install our transceivers and
antennas and connect its intended customers, we must secure roof and other
building access rights, or rights to access other line of sight locations,
including access to conduits and wiring from the owners of each building or
other structure on which we propose to install our equipment, and may require
construction, zoning, franchises or other governmental permits.
 
    LMDS equipment is not in general commercial service at this time, but we are
testing the offerings of several vendors, and expect to begin to deploy LMDS in
1999.
 
    DSL TECHNOLOGY
 
    We are also currently deploying DSL technology to meet the high bandwidth
needs of those customers located less than three miles from the incumbent
carrier's central office and whose first mile connection remains over copper
wire. DSL technology reduces the bottleneck in the transport of information,
particularly for data services, by increasing the data carrying capacity of
copper telephone lines.
 
    We have arrangements with incumbent carriers with respect to more than 150
of their central offices that enable us to make first mile connections to each
business or resident connected to that central office over leased lines. These
arrangements are known in our industry as colocations. We plan to introduce our
own DSL equipment and services at many of our colocation sites to provide our
customers with increased data carrying capacity.
 
    In December of 1998, we also formed a strategic relationship with Covad
Communications, a DSL provider, under which Covad will become a preferred
provider of DSL services to us in locations where we do not provide our own DSL
service. As of January 31, 1999, Covad had established arrangements to maintain
its equipment over 165 incumbent carrier central office spaces.
 
    NATIONAL NETWORK
 
    We are creating a single, end-to-end network by linking our local networks
to one another through the use of a national fiber optic backbone network
currently being constructed by Level 3 Communications. This network is expected
to cover more than 16,000 route miles with six or more conduits and connect 50
cities in the United States and Canada. INTERNEXT L.L.C., a joint venture
managed by us and owned 50% each by us and Eagle River, has entered into a cost
sharing agreement with Level 3 with respect to this network. Under this
agreement, INTERNEXT has:
 
    - an exclusive interest in 24 fibers in a shared, filled conduit throughout
      this network;
 
    - an exclusive interest in one empty conduit, through which we expect to be
      able to pull up to 432 fiber optic strands; and
 
    - the right to 25% of the fibers pulled by Level 3 through the sixth and any
      additional conduits in the network.
 
    INTERNEXT expects the network build-out to occur substantially in years 2000
and 2001. When our system of local city networks is linked together by this
interstate fiber optic network, we will be able to offer our customers
integrated, end-to-end telecommunications services over facilities we control.
 
                                       24
<PAGE>
TECHNOLOGY
 
    The wires, cables and spectrum that comprise the physical layer of our
networks can support a variety of communications technologies. We seek to offer
customers a set of technology options to meet their changing needs, and
introduce new technologies as necessary. Specifically, we believe that a service
platform based on IP will provide us with significant future opportunities,
because it will enable data, voice and video to be carried inexpensively over
our end-to-end, facilities-based network. We have, therefore, begun to
supplement our current data and voice switching technology with Internet
Protocol, or IP, and Asynchronous Transfer Mode, or ATM, equipment.
 
    These technologies will enable us to offer our customers additional
services, such as high-speed Internet access, Internet web hosting, e-commerce
and other Internet services. Because they are more efficient, IP and ATM
technology increase the effective capacity of networks for these types of
applications, and in the future may become the preferred technology for voice
calls and faxes as well.
 
    CIRCUIT SWITCHING VS. PACKET SWITCHING
 
    There are two widely used switching technologies in currently deployed
communications networks: circuit-switching systems and packet-switching systems.
Circuit switch-based communications systems, which currently dominate the public
telephone network, establish a dedicated channel for each communication (such as
a telephone call for voice or fax), maintain the channel for the duration of the
call, and disconnect the channel at the conclusion of the call.
 
    Packet-switch based communications systems, which format the information to
be transmitted into a series of shorter digital messages called "packets," are
the preferred means of data transmission. Each packet consists of a portion of
the complete message plus the addressing information to identify the destination
and return address. A key feature that distinguishes Internet architecture from
the public telephone network is that on the packet-switched Internet, a single
dedicated channel between communication points is not required.
 
    Packet switch-based systems offer several advantages over circuit
switch-based systems, particularly the ability to commingle packets from several
communications sources together simultaneously onto a single channel. For most
communications, particularly those with bursts of information followed by
periods of "silence," the ability to commingle packets provides for superior
network utilization and efficiency, resulting in more information being
transmitted through a given communication channel.
 
    IP technology, an open protocol that allows unrelated computer networks to
exchange data, is the technological basis of the Internet. The Internet's
explosive growth in recent years has focused intensive efforts worldwide on
developing IP-based networks and applications. In contrast to protocols like
ATM, which was the product of elaborate negotiations between the world's
monopoly telephone companies, IP is an open standard, subject to continuous
improvement.
 
    We believe that a form of IP-based switching will eventually replace both
ATM and circuit switched technologies, and will be the foundation of integrated
networks that treat all transmissions -- including voice, fax and video --
simply as forms of data transmission. Current implementations of IP technology
over the Internet lack necessary quality of service to support real-time
applications like voice and fax at commercially acceptable quality levels. We
fully expect that a combination of increased bandwidth and improved technology
will correct these deficiencies.
 
    We are in the process of configuring our network to add packet switch-based
technology to our current circuit switch-based systems. Our goal is to meet the
current demands of our customers for reliable, high-quality switched telephone
connections, while also deploying the facilities, hardware and software
necessary to satisfy their growing demand for high-speed data transmission.
 
                                       25
<PAGE>
    We believe that the IP deployment currently under way on our network will
enable us to implement new services based on current IP technology, and position
us to adopt future IP technology implementations as they evolve to support
fully-integrated communications networks. We anticipate remaining flexible in
our use of technology, however, so that as underlying communications technology
changes, we will have the ability to take advantage of and implement these new
technologies.
 
APPLICATIONS AND SERVICES
 
    VOICE APPLICATIONS AND SERVICES
 
    In each market in which we operate, we currently offer the telephone
services listed below, at prices that are determined and implemented locally in
each market. These prices are generally 10% to 15% lower than the pricing for
comparable local services from the incumbent carrier. Our service offerings
include:
 
    - standard dial tone, including touch tone dialing, 911, and operator
      assisted calling;
 
    - multi-trunk services, including direct inward dialing (DID) and direct
      outward dialing (DOD);
 
    - long distance service, including 1+, 800/888 and operator services;
 
    - voice messaging with personalized greetings, send, transfer, reply and
      remote retrieval capabilities; and
 
    - directory listings and assistance.
 
    In each of our operational markets, we have negotiated and entered into
interconnection agreements with the incumbent carrier, and implemented permanent
local number portability, which allows customers to retain their telephone
numbers when changing telephone service providers.
 
    Additionally, in each of our markets we offer the following services to long
distance carriers and high volume customers, which our customers use as both
primary and back-up circuits:
 
    - special access circuits that connect end users to long distance carriers;
 
    - special access circuits that connect long distance carriers' facilities to
      one another; and
 
    - private line circuits that connect several facilities owned by the same
      end user.
 
    We also provide shared tenant services, which consist of telecommunications
management services we provide to groups of small to medium sized businesses.
This enables business that are too small to justify hiring their own
telecommuinications managers to benefit from efficencies, including volume
discounts, normally available only to larger enterprises.
 
    DATA APPLICATIONS AND SERVICES
 
    We currently offer customers the ability to use our networks for data
services including facsimile and e-mail. Deploying ATM and IP facilities will
enable us to offer our customers extensive bandwidth capacity with increased
speed and reliability. This will allow us to offer data services such as:
 
    Our central offices are the hubs of our network. We expect that their
location on our network's backbone, their electrical and environmental controls
and 24-hour maintenance and technical support will make them attractive
locations for our customers to locate their larger computers (which are known as
servers) or run important applications on servers we will maintain there. This
will enable us to offer:
 
    - WEB HOSTING: support for customers' websites, including design,
      maintenance and telecommunications services;
 
                                       26
<PAGE>
    - SERVER HOSTING: colocation of customers' servers in our central offices;
 
    - APPLICATION HOSTING: running our customers' enterprise-wide applications
      at our central offices and distributing them as needed over our network to
      ensure uniformity, reduce costs and implement upgrades on a continuous and
      immediate basis; and
 
    - E-COMMENCE SUPPORT: support for high-volume purchases over the Internet,
      including system design, order fulfillment and network security.
 
    We plan to combine the capabilities of our national IP-optimized network
with the mass-market e-commerce expertise we have developed through NEXTLINK
Interactive to offer customers a broad range of services to their e-commerce
activities, including telecommunications, web-site design, order fulfillment and
back-office systems.
 
    We also intend to develop and offer our own Internet access services as an
Internet service provider in the year 2000. In the interim, we have also entered
into agreements with PSINet that will allow us to resell PSINet's Internet
access service directly to our customers under our "NEXTLINK" brand. To become
an Internet service provider, or ISP, ourselves we will need to establish
arrangements, known as peering agreements, with other ISPs to allow us to
exchange traffic with them. As ownership of the Internet backbone has become
increasingly concentrated, the terms and conditions of peering agreements are
becoming increasingly restrictive. We can't predict the terms of our future
peering agreements.
 
    Through our NEXTLINK Interactive subsidiary, we currently provide a number
of voice response, speech recognition and e-commerce services for Fortune 100
companies. These systems offer consumer-oriented businesses telephone and
Internet-based automated systems that process orders and supply information to
their customers about their products. We design and operate voice and
Internet-based systems to meets these clients' needs by integrating existing
third-party software applications. These service offerings, however, are not
integrated with our local networks at this time. Examples of systems that we
have developed and operated for our clients include:
 
    - Systems that help our clients' customers locate the nearest dealer, office
      or other location;
 
    - Systems that give our clients' customers information, including cost
      information, about the clients' products and services and automate their
      purchases; and
 
    - Automated order entry systems.
 
GROWTH IN CUSTOMER BASE
 
    We have been successful in attracting customers in the markets that we
serve. Our customer base has been growing rapidly, as the following table of
access lines installed on our networks illustrates:
 
<TABLE>
<CAPTION>
                                                                TOTAL ACCESS
                                                 MARKETS IN        LINES
DATE                                               SERVICE       INSTALLED
- ----------------------------------------------  -------------  --------------
<S>                                             <C>            <C>
December 31, 1996.............................            7           8,511
December 31, 1997.............................           25          50,131
December 31, 1998.............................           37         174,182
March 31, 1999................................           38         224,713
</TABLE>
 
                                       27
<PAGE>
    In addition, we have increased the rate at which we install access lines
each quarter. The following table illustrates this improvement:
 
<TABLE>
<CAPTION>
                                                                ACCESS LINE
                                                               INSTALLATIONS
PERIOD                                                          PER QUARTER
- -------------------------------------------------------------  -------------
<S>                                                            <C>
Fourth Quarter 1996..........................................        1,604
Fourth Quarter 1997..........................................       19,187
Fourth Quarter 1998..........................................       40,075
First Quarter 1999...........................................       50,531
</TABLE>
 
    We also have successfully developed and deployed order entry/provisioning,
billing/collection and other back-office systems for each market in which we
operate. We anticipate that we will continue to develop and deploy new
back-office systems to improve our capabilities as we add new technologies and
services to our networks.
 
MANAGEMENT TEAM
 
    We believe that the quality of our management team and their extensive
experience in the telecommunications industry is one of our competitive
advantages and a critical factor in the successful implementation of our
strategy. The following key members of our management team each has 16 or more
years of experience in leading companies in competitive segments of the
telecommunications industry:
 
    - CRAIG O. MCCAW - our founder, largest and controlling shareholder and
      member of our Board of Directors, who, prior to founding NEXTLINK, was the
      founder of McCaw Cellular Communications, Inc., which became the nation's
      largest cellular telephone company.
 
    - STEVEN W. HOOPER - our Chairman of the Board and Chief Executive Officer,
      who was a member of the senior management team at McCaw Cellular, and was
      Chief Executive Officer of AT&T Wireless Services following McCaw
      Cellular's sale to AT&T, prior to joining NEXTLINK.
 
    - WAYNE M. PERRY - our Vice Chairman and member of our Board of Directors,
      who was a member of the senior management team at McCaw Cellular and was
      Vice Chairman of AT&T Wireless Services following McCaw Cellular's sale to
      AT&T, prior to joining NEXTLINK.
 
    - GEORGE M. TRONSRUE III - our President and Chief Operating Officer, who
      held senior management positions with ACSI, Teleport Communications Group
      and MFS Communications prior to joining NEXTLINK.
 
    In addition, the presidents of our operating subsidiaries and our other
senior officers have an average of 18 years of experience in the
telecommunications industry.
 
    The members of our senior management team who will lead our design and
implementation of technologies include:
 
    - DOUG CARTER - our Senior Vice President, Chief Technology Officer, who was
      the Senior Vice President of Network Operations of AT&T Wireless prior to
      joining NEXTLINK.
 
    - JOHN CURRAN - our Vice President, Internet Technology and head of our
      Cambridge, MA - based IP Design Center, who was Chief Technology Officer
      of GTE Internetworking prior to joining NEXTLINK.
 
    - CHUCK DANIELS - our Vice President, Implementation and head of our Plano,
      Texas implementation center, who was Vice President of Engineering of MCI
      prior to joining NEXTLINK.
 
    - NICK KAUSER - a member of our Board of Directors, who was the Chief
      Technology Officer of AT&T Wireless prior to joining NEXTLINK.
 
                                       28
<PAGE>
                                   REGULATION
 
    The federal Telecommunications Act of 1996 opened local telephone markets to
competition from companies like NEXTLINK. Prior to that time, states typically
granted an exclusive franchise in each local service area to a single dominant
carrier/often a former subsidiary of AT&T known as a "Baby Bell" which owned and
operated the entire local exchange network. The 1996 Act preserved state and
local jurisdiction over many aspects of local telephone service, and, as a
result, NEXTLINK is subject to varying degrees of federal, state and local
regulation. FCC and state regulators, and other legislative or judicial
initiatives relating to the telecommunications industry, could help or hinder
our business.
 
    We are not currently required to obtain FCC authorization for the
installation, acquisition or operation of our wireline network facilities. We
are required to hold and we have obtained FCC authorizations for the operation
of our wireless facilities. In each state in which we desire to offer our
services, we also must first obtain authorization from the appropriate state
commission. Although we currently hold the required state authorizations in each
of our operational markets, we can't be certain that we will receive the
necessary state authorizations for markets to be launched in the future.
 
    Unlike the incumbent carriers, we are not currently subject to price cap or
rate of return regulation, which leaves us more free to set our own pricing
policies. The FCC requires us to file interstate tariffs on an ongoing basis for
interstate and international interexchange traffic. An FCC order that would have
exempted us from any requirement to file tariffs for interstate access and
domestic long distance service has been stayed pending further judicial review,
and, as a result, we currently file tariffs for these services. Our intrastate
services are also generally subject to state certification and tariff or price
list filing requirements.
 
    The 1996 Act gave the FCC significant responsibility for its implementation,
especially in the areas of universal service, access charges, numbering, number
portability and price caps. The details of the rules adopted by the FCC, and the
extent to which they are upheld by the courts reviewing the FCC's rules, will
have a significant effect on when and to what extent barriers to competition in
local services are removed. For example, the FCC has the power to grant
incumbent carriers increased flexibility to enable them to reduce prices for
special access, private line services and advanced telecommunications services.
 
    The 1996 Act provides incentives to most of the incumbent carriers to enter
into interconnection agreements with carriers like NEXTLINK. We need
interconnection agreements to gain access to the incumbent carriers' networks.
Although we have interconnection agreements in all of our currently operational
markets, we can't be certain that incumbent carriers in new markets we seek to
enter will negotiate quickly with us or that any resulting agreements will be on
terms favorable to us.
 
    The incumbent carriers have frequently resorted to litigation in an attempt
to obtain the benefits of these incentives without offering consumers and
competitors like NEXTLINK the full benefits intended by the 1996 Act. For
example, in September 1998, the FCC ruled that certain incumbent carrier
"teaming" arrangements with long distance carriers, which would have allowed
incumbent carriers to offer a form of "one stop shopping" in competition with
NEXTLINK's combined local and long distance offerings, violated the 1996 Act. In
response, the incumbent carriers have filed petitions with the United States
Court of Appeals for the District of Columbia seeking to overturn this ruling.
If this FCC's ruling is reversed by the courts, one of our current competitive
advantages would be undermined.
 
    In January 1999, the U.S. Supreme Court upheld key provisions of the FCC
rules implementing the 1996 Act, in a decision that was generally favorable to
competitive telephone companies like NEXTLINK. In two earlier decisions, the
United States Court of Appeals for the Eighth Circuit had invalidated these
rules. The Supreme Court's decision reinstated all but one of the FCC rules
invalidated by the Eighth Circuit. The Supreme Court held that the FCC has
general jurisdiction to
 
                                       29
<PAGE>
implement the 1996 Act's local competition provisions, including pricing and
enforcement jurisdiction. Significantly, the Court upheld that the FCC's "pick
and choose" rule, which allows competitors to choose which provisions of other
carriers' interconnection agreements they wish to incorporate in their own
interconnection agreements with that incumbent carrier.
 
    A key provision of the 1996 Act requires incumbent carriers to make elements
of their networks available to competing carriers like NEXTLINK at reasonable
rates. The Supreme Court broadly affirmed these provisions, but held that the
FCC did not correctly determine precisely which network elements must be
unbundled and made available to competitors like NEXTLINK. This ruling cast
existing interconnection agreements in doubt when some incumbent carriers stated
that they would no longer make elements of their networks available until the
FCC clarified which elements they must offer to competitors. These incumbent
carriers subsequently assured FCC officials that they would continue to provide
currently available network elements to their competitors and continue to
negotiate new interconnection agreements in good faith.
 
    Until the FCC adopts new rules complying with the Supreme Court's decision,
competitors like NEXTLINK will need to rely to a great extent on the continued
good faith of the incumbent carriers, rather than express regulatory rights, to
obtain new interconnection agreements and network elements.
 
    The Supreme Court decision did not address or resolve the incumbent
carriers' challenge to the FCC's forward-looking pricing methodology for
unbundled network elements. The incumbent carriers have challenged this
methodology, claiming that any correct procedure would take into account
historical costs. If the incumbent carriers succeed in this contention, we would
have to pay more to purchase network elements, which could significantly
increase our cost of doing business.
 
                                       30
<PAGE>
                            DESCRIPTION OF THE NOTES
 
    The senior notes and the senior discount notes will be issued under two
separate indentures, each dated May   , 1999, between NEXTLINK and United States
Trust Company, as trustee. Since many provisions of the indentures are
identical, they are described together below, but the provisions of each
indenture apply only to the notes outstanding thereunder.
 
    The indentures contain the full legal text of the matters described in this
section. Copies of the indentures can be obtained at the corporate office of the
trustee and has been filed with the SEC as part of our Registration Statement.
See "Where You Can Find More Information" on page 77 for information on how to
obtain copies.
 
    Because this section is a summary, it does not describe every aspect of the
notes. This summary is subject to and qualified in its entirety by reference to
all the provisions of each of the indentures, including definitions of some
terms used in each of the indentures. For example, in this section we use
capitalized words to signify defined terms that have been given special meaning
in each of the indentures. We describe the meaning for only the more important
terms, under "Definitions". We also include references in parentheses to certain
sections of each of the indentures.
 
    Whenever we refer to particular sections or defined terms of the indentures
in this prospectus, these sections or defined terms are incorporated by
reference into this prospectus.
 
    In this description of notes, the term "NEXTLINK" refers to NEXTLINK
Communications, Inc. and does not include its subsidiaries except for purposes
of financial data determined on a consolidated basis.
 
BRIEF DESCRIPTION OF THE NOTES
 
    THE SENIOR NOTES:
 
       - will be senior obligations of NEXTLINK;
 
       - will be limited to $      million principal amount;
 
       - will mature on June   , 2009; and
 
       - will bear interest at the rate of   % per annum to be paid
         semi-annually on June and December of each year, commencing December
           , 1999, to the registered holder at the close of business on the
         preceding         or         .
 
    THE SENIOR DISCOUNT NOTES:
 
       - will be senior obligations of NEXTLINK;
 
       - will be issued at a discount from their aggregate principal amount at
         stated maturity to generate gross proceeds of approximately $    ;
 
       - will mature on June   , 2009;
 
       - will not accrue cash interest prior to June   , 2004;
 
       - will accrete at a rate of     % per annum, compounded semi-annually to
         an aggregate principal amount of $      ; and
 
       - beginning on June   , 2004 will bear cash interest at the rate of    %
         per annum to be paid semi-annually on June     and December     of each
         year, commencing December   , 2004 to the registered holder at the
         close of business on the preceding         or         .
 
                                       31
<PAGE>
    In a NEXTLINK bankruptcy, holders of senior discount notes would have a
claim measured by their notes' accreted value, not their principal amount.
 
    Interest on the senior and senior discount notes will be computed on the
basis of a 360 day year of twelve 30 day months. (Section 301, 307 and 310)
 
METHODS OF RECEIVING PAYMENTS ON THE NOTES
 
    NEXTLINK will pay interest, principal and any other money due on the senior
and senior discount notes at the corporate trust office of the trustee in New
York City. That office is currently located at 114 West 47th Street, New York,
New York 10036. You must make arrangements to have your payments picked up at or
wired from that office. NEXTLINK may also choose to pay interest by mailing
checks. (Section 301, 305 and 1002)
 
    The senior and senior discount notes will be issued only in fully registered
form, without coupons, in denominations of $1,000 and any integral multiple of
$1,000. (Section 302) You will not be required to pay a service charge to
transfer or exchange notes, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. (Section 305)
 
RANKING
 
    The notes:
 
       - will be senior obligations of NEXTLINK;
 
       - will rank equally in right of payment with each other and all existing
         and future senior obligations of NEXTLINK, including our 9% Notes,
         9 5/8% Notes, 12 1/2% Notes, 9.45% Notes the 10 3/4% Notes; and
 
       - will rank senior in right of payment to all future subordinated
         obligations of NEXTLINK.
 
    Holders of secured obligations of NEXTLINK will, however, have claims that
are prior to the claims of the holders of the senior and senior discount notes
with respect to the assets securing those other obligations.
 
    NEXTLINK's principal operations are conducted through its Subsidiaries, and
NEXTLINK is therefore dependent upon the cash flow of its Subsidiaries to meet
its obligations. NEXTLINK's Subsidiaries will have no obligation to guarantee or
otherwise pay amounts due under the senior and senior discount notes. Therefore,
the senior and senior discount notes will be effectively subordinated to all
indebtedness and other liabilities and commitments, including trade payables, of
NEXTLINK's Subsidiaries. Any right of NEXTLINK to receive assets of any
Subsidiary upon any liquidation or reorganization of that Subsidiary (and the
consequent right of holders of the senior and senior discount notes to
participate in those assets) will be effectively subordinated to the claims of
the Subsidiary's creditors, except to the extent that NEXTLINK itself is
recognized as a creditor of the Subsidiary.
 
    As of March 31, 1999:
 
       - the total amount of outstanding consolidated liabilities of NEXTLINK
         and its Subsidiaries, including trade payables, was approximately
         $2,176.0 million, of which $15.6 million were secured obligations; and
 
       - the total amount of outstanding liabilities of NEXTLINK's Subsidiaries,
         including trade payables, was $73.2 million, of which $3.5 million were
         secured obligations.
 
    For more information, see "Description of Other Material Indebtedness" and
"Selected Historical Consolidated Financial and Operating Data."
 
                                       32
<PAGE>
OPTIONAL REDEMPTION
 
    SENIOR NOTES
 
    NEXTLINK may opt to redeem the senior notes, in whole or in part, at any
time on or after June   , 2004. If NEXTLINK chooses this optional redemption, it
is required to mail a notice of the redemption not less than 30 and not more
than 60 days after the redemption to each holder of senior notes to be redeemed
at the holder's address as it appears in the note register.
 
<TABLE>
<CAPTION>
YEAR                                                                          REDEMPTION PRICE
- ----------------------------------------------------------------------------  ----------------
<S>                                                                           <C>
2004........................................................................
2005........................................................................
2006........................................................................
2007 and thereafter.........................................................
</TABLE>
 
    The prices are expressed as percentages of the principal amount.
 
    (SectionSection 203, 1101, 1105 and 1107)
 
    NEXTLINK may only redeem the senior notes in amounts of $1,000 principal
amount or an integral multiple of $1,000 at a redemption price of   % of their
principal amount plus accrued and unpaid interest before June   , 2002, if, on
or before that date, NEXTLINK receives net proceeds from a sale of its Common
Equity.
 
    If, in addition:
 
       - at least   % of the principal amount of the senior notes remains
         outstanding after the redemption; and
 
       - the redemption occurs on a redemption date within 90 days of the sale
         and NEXTLINK mails not less than 30 and not more than 60 days after the
         redemption a notice to each holder of notes to be redeemed
 
    NEXTLINK may opt to use all or a portion of any such net proceeds to redeem
senior notes in a principal amount of up to     % of the original principal
amount of the senior notes.
 
    If less than all of the senior notes are to be redeemed, the trustee shall
select the particular notes to be redeemed or any portion thereof that is an
integral multiple of $1,000. The trustee shall make this selection on a pro rata
basis, by lot or by such other method as it shall deem fair and appropriate.
 
    SENIOR DISCOUNT NOTES
 
    NEXTLINK may opt to redeem the senior discount notes, in whole or in part,
at any time on or after June   , 2004. If NEXTLINK chooses this optional
redemption, it is required to mail a notice of the redemption not less than 30
and not more than 60 days after the redemption to each holder of senior discount
notes to be redeemed at the holder's address as it appears in the note register.
 
<TABLE>
<CAPTION>
YEAR                                                                          REDEMPTION PRICE
- ----------------------------------------------------------------------------  ----------------
<S>                                                                           <C>
2004........................................................................               %
2005........................................................................
2006........................................................................
2007 and thereafter.........................................................
</TABLE>
 
    The prices are expressed as percentages of the principal amount.
 
    (SectionSection 203, 1101, 1105 and 1107)
 
                                       33
<PAGE>
    NEXTLINK may only redeem the senior discount notes in amounts of $1,000
principal amount or an integral multiple of $1,000 at a redemption price of   %
of the Accreted Value of the senior discount notes plus accrued and unpaid
interest before June   , 2002, if, on or before that date, NEXTLINK receives net
proceeds from a sale of its Common Equity.
 
    If, in addition:
 
       - at least   % of the original aggregate principal amount of the senior
         discount notes remains outstanding after the redemption; and
 
       - the redemption occurs on a redemption date within 90 days of the sale
         and NEXTLINK mails not less than 30 and not more than 60 days after the
         redemption a notice to each holder of notes to be redeemed
 
    NEXTLINK may opt to use all or a portion of any such net proceeds to redeem
senior discount notes in a principal amount of up to     % of their original
principal amount of the senior discount notes.
 
    If less than all of the senior discount notes are to be redeemed, the
trustee shall select the particular notes to be redeemed or any portion thereof
that is an integral multiple of $1,000. The trustee shall make this selection on
a pro rata basis, by lot or by such other method as it shall deem fair and
appropriate.
 
MANDATORY REDEMPTION; SINKING FUND
 
    Except as described under "Covenants--Limitation on Asset Dispositions" and
"Covenants-- Change of Control" below, NEXTLINK is not required to purchase or
make mandatory redemption payments or sinking fund payments with respect to the
senior or senior discount notes.
 
COVENANTS
 
    In the indentures, NEXTLINK agreed to certain restrictions that limit its
and its Restricted Subsidiaries' ability to:
 
        (1)  Incur additional Debt;
 
        (2)  issue Preferred Stock;
 
        (3)  pay dividends, acquire shares of Capital Stock of NEXTLINK, make
    Investments or redeem Debt of NEXTLINK which is subordinate in right of
    payment to the senior or senior discount notes;
 
        (4)  restrict the ability of any Restricted Subsidiary to pay dividends,
    to make loans or advances to NEXTLINK or any other Restricted Subsidiary or
    to transfer any of its property or assets to NEXTLINK or any other
    Restricted Subsidiary;
 
        (5)  create liens;
 
        (6)  engage in sale-leaseback transactions;
 
        (7)  make Asset Dispositions;
 
        (8)  issue or sell shares of Capital Stock of Restricted Subsidiaries;
    and
 
        (9)  enter into transactions with Affiliates and Related Persons.
 
    In addition, if a Change of Control occurs, each holder of notes will have
the right to require NEXTLINK to repurchase all or part of such holder's notes
at a price equal to: (1) in the case of senior notes, 101% of their principal
amount plus accrued and unpaid interest to the date of purchase
 
                                       34
<PAGE>
or (2) in the case of senior discount notes, 101% of their Accreted Value (if
the Offer to Purchase is made on or prior to June   , 2004) or 101% of their
principal amount plus accrued and unpaid interest to the date of purchase (if
such offer to Purchase is consummated thereafter). The above limitations are
"restrictive covenants" that are promises that we make to you about how we will
run our business, or business actions that we promise not to take. A more
detailed description of the restrictive covenants and the exceptions to them
follows below.
 
    LIMITATION ON CONSOLIDATED INDEBTEDNESS
 
    NEXTLINK may not, and may not permit any Restricted Subsidiary to, Incur any
Debt unless either:
 
        (1)  the ratio of:
 
           (a)  the aggregate consolidated principal amount of Debt of NEXTLINK
       outstanding as of the most recent available quarterly or annual balance
       sheet, after giving pro forma effect to the Incurrence of such Debt and
       any other Debt Incurred since such balance sheet date and the receipt and
       application of the proceeds thereof
 
       to
 
           (b)  Consolidated Cash Flow Available for Fixed Charges for the four
       full fiscal quarters next preceding the Incurrence of such Debt for which
       consolidated financial statements are available, determined on a pro
       forma basis as if
 
               (x)  any such Debt had been Incurred and the proceeds thereof had
           been applied at the beginning of such four fiscal quarters;
 
               (y)  the net income (or loss) for such period of any Person or
           related to any assets disposed of by NEXTLINK or a Restricted
           Subsidiary prior to the end of such period had been excluded from
           Consolidated Net Income; and
 
               (z)  the net income (or loss) for such period of any Person or
           related to any assets acquired by NEXTLINK or any Restricted
           Subsidiary prior to the end of such period had been included in
           Consolidated Net Income;
 
       would be less than 5.5 to 1 for such four quarter periods ending on or
       prior to December 31, 1999 and 5.0 to 1 for such periods ending
       thereafter;
 
    or
 
        (2)  NEXTLINK's Consolidated Capital Ratio as of the most recent
    available quarterly or annual balance sheet, after giving pro forma effect
    to the Incurrence of such Debt, any issuance of capital stock (other than
    Disqualified Stock) since such balance sheet date, any increase in
    paid-in-capital (other than in respect of Disqualified Stock) since such
    balance sheet date and the Incurrence of any other Debt since such balance
    sheet date and the receipt and application of the proceeds thereof, is less
    than 2.0 to 1.
 
    Notwithstanding the foregoing limitation, NEXTLINK and any Restricted
Subsidiary may Incur the following:
 
        (1)  Debt under any one or more Bank Credit Agreements or Vendor
    Financing Facilities in an aggregate principal amount at any one time not to
    exceed the greater of:
 
           (a)  $250 million and
 
           (b)  85% of the Eligible Receivables, and any renewal, extension,
       refinancing or refunding thereof in an amount which, together with any
       principal amount remaining
 
                                       35
<PAGE>
       outstanding or available under all Bank Credit Agreements and Vendor
       Financing Facilities of NEXTLINK and its Restricted Subsidiaries, plus
       the amount of any premium required to be paid in connection with such
       refinancing pursuant to the terms of any Bank Credit Agreement so
       refinanced plus the amount of expenses incurred in connection with such
       refinancing, does not exceed the aggregate principal amount outstanding
       or available under all such Bank Credit Agreements and Vendor Financing
       Facilities of NEXTLINK and its Restricted Subsidiaries immediately prior
       to such renewal, extension, refinancing or refunding;
 
        (2)  Purchase Money Debt Incurred to finance the construction,
    acquisition or improvement of Telecommunications Assets, provided that the
    net proceeds of such Purchase Money Debt do not exceed 100% of the cost of
    construction, acquisition or improvement price of the applicable
    Telecommunications Assets;
 
        (3)  Debt owed by NEXTLINK to any Restricted Subsidiary of NEXTLINK or
    Debt owed by a Restricted Subsidiary to NEXTLINK or a Restricted Subsidiary
    of NEXTLINK; provided, however, that upon either
 
           (a)  the transfer or other disposition by such Restricted Subsidiary
       or NEXTLINK of any Debt so permitted to a Person other than NEXTLINK or
       another Restricted Subsidiary of NEXTLINK or
 
           (b)  the issuance (other than directors' qualifying shares), sale,
       lease, transfer or other disposition of shares of Capital Stock
       (including by consolidation or merger) of such Restricted Subsidiary, as
       a result of which the obligor of such Debt ceases to be a Restricted
       Subsidiary, the provisions of this clause (3) shall no longer be
       applicable to such Debt and such Debt shall be deemed to have been
       Incurred at the time of such transfer or other disposition;
 
        (4)  Debt Incurred to renew, extend, refinance or refund (each, a
    "refinancing") Debt outstanding at the date of the indentures or incurred
    pursuant to the preceding paragraph or clause (2) of this paragraph or the
    senior or senior discount notes in an aggregate principal amount not to
    exceed the aggregate principal amount of and accrued interest on the Debt so
    refinanced plus the amount of any premium required to be paid in connection
    with such refinancing pursuant to the terms of the Debt so refinanced or the
    amount of any premium reasonably determined by NEXTLINK as necessary to
    accomplish such refinancing by means of a tender offer or privately
    negotiated repurchase, plus the amount of expenses of NEXTLINK incurred in
    connection with such refinancing; provided, however, that Debt the proceeds
    of which are used to refinance the senior or senior discount notes or Debt
    which is PARI PASSU to the senior or senior discount notes or debt which is
    subordinate in right of payment to the senior or senior discount notes shall
    only be permitted if:
 
           (a)  in the case of any refinancing of the senior or senior discount
       notes or Debt which is PARI PASSU to the senior or senior discount notes,
       the refinancing Debt is made PARI PASSU to the senior or senior discount
       notes or subordinated to the senior or senior discount notes, and, in the
       case of any refinancing of Debt which is subordinated to the senior or
       senior discount notes, the refinancing Debt constitutes Subordinated Debt
       and
 
           (b)  in either case, the refinancing Debt by its terms, or by the
       terms of any agreement or instrument pursuant to which such Debt is
       issued,
 
               (x)  does not provide for payments of principal of such Debt at
           the stated maturity thereof or by way of a sinking fund applicable
           thereto or by way of any mandatory redemption, defeasance, retirement
           or repurchase thereof by NEXTLINK (including any redemption,
           retirement or repurchase which is contingent upon events or
           circumstances, but excluding any retirement required by virtue of
           acceleration of such Debt upon any
 
                                       36
<PAGE>
           event of default thereunder), in each case prior to the time the same
           are required by the terms of the Debt being refinanced and
 
               (y)  does not permit redemption or other retirement (including
           pursuant to an offer to purchase made by NEXTLINK) of such debt at
           the option of the holder thereof prior to the final stated maturity
           of the Debt being refinanced, other than a redemption or other
           retirement at the option of the holder of such Debt (including
           pursuant to an offer to purchase made by NEXTLINK) which is
           conditioned upon a change substantially similar to those described
           under "--Change of Control" or which is pursuant to provisions
           substantially similar to those described under "--Limitation on Asset
           Dispositions;"
 
        (5)  Debt consisting of Permitted Interest Rate or Currency Protection
    Agreements;
 
        (6)  Debt outstanding under the senior or senior discount notes;
 
        (7)  Subordinated Debt invested by:
 
           (a)  a group of employees of NEXTLINK, which includes the Chief
       Executive Officer of NEXTLINK, who own, directly or indirectly, through
       an employee stock ownership plan or arrangement, shares of NEXTLINK's
       Capital Stock or
 
           (b)  any other Person that controls NEXTLINK:
 
               (x)  on the Issue Date or
 
               (y)  after a Change of Control, provided that NEXTLINK is not in
           default with respect to its obligations described under "--Change of
           Control" below;
 
        (8)  Debt consisting of performance and other similar bonds and
    reimbursement obligations Incurred in the ordinary course of business
    securing the performance of contractual, franchise or license obligations of
    NEXTLINK or a Restricted Subsidiary, or in respect of a letter of credit
    obtained to secure such performance; and
 
        (9)  Debt not otherwise permitted to be Incurred pursuant to clauses (1)
    through (8) above, which, together with any other outstanding Debt Incurred
    pursuant to this clause (9), has an aggregate principal amount or, in the
    case of Debt issued at a discount, an accreted amount (determined in
    accordance with generally accepted accounting principles) at the time of
    Incurrence not in excess of $10 million at any time outstanding.
 
    For purposes of determining compliance with this "Limitation on Consolidated
Debt" covenant, if an item of Debt meets the criteria of more than one of the
types of Debt NEXTLINK is permitted to incur pursuant to the foregoing clauses
(1) through (9) or the first unnumbered paragraph of this "Limitation on
Consolidated Indebtedness," NEXTLINK shall have the right, in its sole
discretion, to classify such item of Debt and shall only be required to include
the amount and type of such Debt under the clause or paragraph permitting the
Debt as so classified. The determination of any particular amount of Debt under
such covenant shall be made without duplication for Guarantees or Liens
supporting Debt otherwise included in the determination of a particular amount.
(Section 1007)
 
    LIMITATION ON DEBT AND PREFERRED STOCK OF RESTRICTED SUBSIDIARIES
 
    NEXTLINK may not permit any Restricted Subsidiary (other than a Restricted
Subsidiary that has fully and unconditionally Guaranteed the notes on an
unsubordinated basis) to Incur or suffer to exist any Debt or issue any
Preferred Stock except:
 
        (1)  Debt or Preferred Stock outstanding on the date of the Indenture
    after giving effect to the application of the proceeds of the senior or
    senior discount notes;
 
                                       37
<PAGE>
        (2)  Debt Incurred or Preferred Stock issued to and held by NEXTLINK or
    a Restricted Subsidiary of NEXTLINK (provided that such Debt or Preferred
    Stock is at all times held by NEXTLINK or a Restricted Subsidiary of
    NEXTLINK);
 
        (3)  Debt Incurred or Preferred Stock issued by a Person prior to the
    time:
 
           (a)  such Person became a Restricted Subsidiary of NEXTLINK,
 
           (b)  such Person merges into or consolidates with a Restricted
       Subsidiary of NEXTLINK or
 
           (c)  another Restricted Subsidiary of NEXTLINK merges into or
       consolidates with such Person (in a transaction in which such Person
       becomes a Restricted Subsidiary of NEXTLINK), which Debt or Preferred
       Stock was not Incurred or issued in anticipation of such transaction and
       was outstanding prior to such transaction;
 
        (4)  Debt consisting of Permitted Interest Rate and Currency Protection
    Agreements;
 
        (5)  Debt or Preferred Stock of a Joint Venture;
 
        (6)  Debt under any one or more Bank Credit Agreements or Vendor
    Financing Facilities (and renewals, extensions, refinancings or refundings
    thereof) which is permitted to be outstanding under clause (1) of the
    "--Limitation on Consolidated Indebtedness";
 
        (7)  Debt consisting of Guarantees of the senior or senior discount
    notes;
 
        (8)  Debt or Preferred Stock which is exchanged for, or the proceeds of
    which are used to refinance, refund or redeem, any Debt or Preferred Stock
    permitted to be outstanding pursuant to clauses (1), (3) and (9) hereof (or
    any extension or renewal thereof) (for purposes hereof, a "refinancing"), in
    an aggregate principal amount, in the case of Debt, or with an aggregate
    liquidation preference, in the case of Preferred Stock, not to exceed the
    aggregate principal amount of the Debt so refinanced or the aggregate
    liquidation preference of the Preferred Stock so refinanced, plus the amount
    of any premium required to be paid in connection with such refinancing
    pursuant to the terms of the Debt or Preferred Stock so refinanced or the
    amount of any premium reasonably determined by NEXTLINK as necessary to
    accomplish such refinancing by means of a tender offer or privately
    negotiated repurchase, plus the amount of expenses of NEXTLINK and the
    Restricted Subsidiary incurred in connection therewith and provided the Debt
    or Preferred Stock incurred or issued upon such refinancing by its terms, or
    by the terms of any agreement or instrument pursuant to which such Debt or
    Preferred Stock is Incurred or issued,
 
           (a)  does not provide for payments of principal or liquidation value
       at the stated maturity of such Debt or Preferred Stock or by way of a
       sinking fund applicable to such Debt or Preferred Stock or by way of any
       mandatory redemption, defeasance, retirement or repurchase of such Debt
       or Preferred Stock by NEXTLINK or any Restricted Subsidiary of NEXTLINK
       (including any redemption, retirement or repurchase which is contingent
       upon events or circumstances, but excluding any retirement required by
       virtue of acceleration of such Debt upon an event of default thereunder),
       in each case prior to the time the same are required by the terms of the
       Debt or Preferred Stock being refinanced and
 
           (b)  does not permit redemption or other retirement (including
       pursuant to an offer to purchase made by NEXTLINK or a Restricted
       Subsidiary) of such Debt or Preferred Stock at the option of the holder
       thereof prior to the stated maturity of the Debt or Preferred Stock being
       refinanced, other than a redemption or other retirement at the option of
       the holder of such Debt or Preferred Stock (including pursuant to an
       offer to purchase made by NEXTLINK or a Restricted Subsidiary) which is
       conditioned upon the change of control of NEXTLINK pursuant to provisions
       substantially similar to those contained in the Indenture
 
                                       38
<PAGE>
       described under "--Change of Control" or which is pursuant to provisions
       substantially similar to those described under "--Limitation on Asset
       Dispositions", and provided, further, that in the case of any exchange or
       redemption of Preferred Stock of a Restricted Subsidiary, such Preferred
       Stock may only be exchanged for or redeemed with Preferred Stock of such
       Restricted Subsidiary;
 
        (9)  Purchase Money Debt Incurred to finance the construction,
    acquisition or improvement of Telecommunications Assets, provided that the
    net proceeds of such Purchase Money Debt do not exceed 100% of the cost of
    construction, acquisition or improvement price of the applicable
    Telecommunications Assets;
 
        (10)  Debt consisting of performance and other similar bonds and
    reimbursement obligations Incurred in the ordinary course of business
    securing the performance of contractual, franchise or license obligations of
    NEXTLINK or a Restricted Subsidiary, or in respect of a letter of credit
    obtained to secure such performance; and
 
        (11)  Debt not otherwise permitted to be incurred pursuant to clauses
    (1) through (10) above, which, together with any other outstanding Debt
    incurred pursuant to this clause (11), has an aggregate principal amount
    (or, in the case of Debt issued at a discount, an accreted amount
    (determined in accordance with generally accepted accounting principles) at
    the time of Incurrence) not in excess of $10 million at any time
    outstanding. (Section 1008)
 
    For purposes of determining compliance with this "Limitation on Debt and
Preferred Stock of Restricted Subsidiaries" covenant, in the event that an item
of Debt meets the criteria of more than one of the types of Debt a Restricted
Subsidiary is permitted to incur pursuant to the foregoing clauses (1) through
(9), NEXTLINK shall have the right, in its sole discretion, to classify such
item of Debt and shall be only required to include the amount and type of such
Debt under the clause permitting the Debt as so classified. The determination of
any particular amount of Debt under such covenant shall be made without
duplication for Guarantees or Liens supporting Debt or otherwise included in the
determination of a particular amount. (Section 1008)
 
    LIMITATION ON RESTRICTED PAYMENTS
 
    NEXTLINK may not:
 
        (1)  directly or indirectly, declare or pay any dividend, or make any
    distribution, in respect of its Capital Stock or to the holders thereof (in
    their capacity as such), excluding any dividends or distributions payable
    solely in shares of its Capital Stock (other than Disqualified Stock) or in
    options, warrants or other rights to acquire its Capital Stock (other than
    Disqualified Stock);
 
        (2)  permit any Restricted Subsidiary to, purchase, redeem, or otherwise
    retire or acquire for value:
 
           (a)  any Capital Stock of NEXTLINK or any Related Person of NEXTLINK;
       or
 
           (b)  any options, warrants or rights to purchase or acquire shares of
       Capital Stock of NEXTLINK or any Related Person of NEXTLINK or any
       securities convertible or exchangeable into shares of Capital Stock of
       NEXTLINK or any Related Person of NEXTLINK;
 
        (3)  make, or permit any Restricted Subsidiary to make, any Investment
    in, or payment on a Guarantee of any obligation of, any Person, other than
    NEXTLINK or a Restricted Subsidiary of NEXTLINK, except for Permitted
    Investments; and
 
        (4)  and may not permit any Restricted Subsidiary to, redeem, defease,
    repurchase, retire or otherwise acquire or retire for value, prior to any
    scheduled maturity, repayment or sinking fund
 
                                       39
<PAGE>
    payment, Debt of NEXTLINK which is subordinate in right of payment to the
    Notes (each of clauses (1) through (4) being a "Restricted Payment")
 
           if:
 
           (a)  a Default or an Event of Default shall have occurred and is
       continuing; or
 
           (b)  upon giving effect to such Restricted Payment, NEXTLINK could
       not Incur at least $1.00 of additional Debt pursuant to the terms of the
       indentures described in the first paragraph of "--Limitation on
       Consolidated Indebtedness" above; or
 
           (c)  upon giving effect to such Restricted Payment, the aggregate of
       all Restricted Payments from April 25, 1996 exceeds the sum of:
 
               (A)  50% of cumulative Consolidated Net Income (or, in the case
           Consolidated Net Income shall be negative, less 100% of such deficit)
           since the end of the last full fiscal quarter prior to April 25, 1996
           through the last day of the last full fiscal quarter ending
           immediately preceding the date of such Restricted Payment; plus
 
               (B)  $5 million; plus
 
               (C)  100% of the net reduction in Investments in any Unrestricted
           Subsidiary since the end of the last full fiscal quarter prior to
           April 25, 1996 resulting from payments of interest on Debt,
           dividends, repayments of loans or advances, or other transfers of
           assets, in each case to NEXTLINK or any Restricted Subsidiary of
           NEXTLINK from such Unrestricted Subsidiary (except to the extent that
           any such payment is included in the calculation of Consolidated Net
           Income) or from redesignations of Unrestricted Subsidiaries as
           Restricted Subsidiaries; PROVIDED that the amount included in this
           clause (C) shall not exceed the amount of Investments previously made
           by NEXTLINK and its Restricted Subsidiaries in such Unrestricted
           Subsidiary;
 
    PROVIDED, FURTHER, that NEXTLINK or a Restricted Subsidiary of NEXTLINK may
    make any Restricted Payment with the aggregate net proceeds received after
    April 25, 1996, including the fair value of property other than cash
    (determined in good faith by the Board of Directors of NEXTLINK, as
    conclusively evidenced by a Board Resolution filed with the trustee), as
    capital contributions to NEXTLINK or from the issuance (other than to a
    Restricted Subsidiary) of Capital Stock (other than Disqualified Stock) of
    NEXTLINK and warrants, rights or options on Capital Stock (other than
    Disqualified Stock) of NEXTLINK and the principal amount of Debt of NEXTLINK
    that has been converted into Capital Stock (other than Disqualified Stock
    and other than by a Restricted Subsidiary) of NEXTLINK after April 25, 1996.
 
    Notwithstanding the foregoing:
 
           (1)  NEXTLINK may pay any dividend on Capital Stock of any class
       within 60 days after the declaration thereof if, on the date when the
       dividend was declared, NEXTLINK could have paid such dividend in
       accordance with the foregoing provisions;
 
           (2)  NEXTLINK may repurchase any shares of its Common Equity or
       options to acquire its Common Equity from Persons who were formerly
       officers or employees of NEXTLINK, PROVIDED that the aggregate amount of
       all such repurchases made pursuant to this clause (2) shall not exceed $2
       million, plus the aggregate cash proceeds received by NEXTLINK since
       April 25, 1996 from issuances of its Common Equity or options to acquire
       its Common Equity to members, officers, managers, directors and employees
       of NEXTLINK or any of its Subsidiaries;
 
           (3)  NEXTLINK and its Restricted Subsidiaries may refinance any Debt
       otherwise permitted by clause (4) of the second paragraph under
       "--Limitation on Consolidated Indebtedness" above; and
 
                                       40
<PAGE>
        (4)  NEXTLINK and its Restricted Subsidiaries may retire or repurchase
    any Capital Stock or Subordinated Debt of NEXTLINK in exchange for, or out
    of the proceeds of the substantially concurrent sale (other than to a
    Restricted Subsidiary of NEXTLINK) of, Capital Stock (other than
    Disqualified Stock) of NEXTLINK. If NEXTLINK makes a Restricted Payment
    which, at the time it is made, would in good faith determination of NEXTLINK
    be permitted under the indentures, such Restricted Payment shall be deemed
    to have been made in compliance with the indenture notwithstanding any
    subsequent adjustments in good faith to NEXTLINK financial statements
    affecting Consolidated Net Income for any period.
 
    In determining the aggregate amount expended or available for Restricted
Payments in accordance with clause (c) of the first paragraph above,
 
        (1)  no amounts expended under clauses (3) or (4) of the immediately
    preceding paragraph shall be included,
 
        (2)  100% of the amounts expended under clauses (1) and (2) of the
    immediately preceding paragraph shall be included, and
 
        (3)  no amount shall be credited in respect of issuances of Capital
    Stock in transactions under clause (4) of the immediately preceding
    paragraph. (Section 1009)
 
    LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
     SUBSIDIARIES
 
    NEXTLINK may not, and may not permit any Restricted Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary of NEXTLINK:
 
        (1)  to pay dividends (in cash or otherwise) or make any other
    distributions in respect of its Capital Stock owned by NEXTLINK or any other
    Restricted Subsidiary or pay any Debt or other obligation owed to NEXTLINK
    or any other Restricted Subsidiary;
 
        (2)  to make loans or advances to NEXTLINK or any other Restricted
    Subsidiary; or
 
        (3)  to transfer any of its property or assets to NEXTLINK or any other
    Restricted Subsidiary.
 
    Notwithstanding the foregoing, NEXTLINK may, and may permit any Restricted
Subsidiary to, suffer to exist any such encumbrance or restriction:
 
           (a)  pursuant to any agreement in effect on the Issue Date;
 
           (b)  pursuant to an agreement relating to any Acquired Debt, which
       encumbrance or restriction is not applicable to any Person, or the
       properties or assets of any Person, other than the Person so acquired and
       its Subsidiaries;
 
           (c)  pursuant to any one or more Bank Credit Agreements or Vendor
       Financing Facilities (and renewals, extensions, refinancings or
       refundings thereof) which is permitted to be outstanding under clause (1)
       or (2) of "Limitation on Consolidated Indebtedness" or clause (6) or (9)
       of "Limitation on Debt and Preferred Stock of Restricted Subsidiaries",
       PROVIDED that such restriction is consistent with, and not materially
       more restrictive (as conclusively determined in good faith by the Chief
       Financial Officer of NEXTLINK), taken as a whole, than, comparable
       provisions included in similar agreements or facilities extended to
       comparable credits engaged in the Telecommunications Business and
       provided further that, in the case of any such Bank Credit Agreement or
       Vendor Financing Facility entered into by a Restricted Subsidiary under
       clause (2) of "Limitation on Consolidated Indebtedness" or clause (9) of
       "Limitation on Debt and Preferred Stock of Restricted Subsidiaries", such
       encumbrances or restricitons do not prohibit dividends, distributions,
       loans or advances by
 
                                       41
<PAGE>
       such Restricted Subsidiary to the Company or another Restricted
       Subsidiary to the extent that the failure to make such distribution, loan
       or advance would result in the Company defaulting in the payment of
       principal or interest on its Debt;
 
           (d)  pursuant to an agreement effecting a renewal, refunding or
       extension of Debt Incurred pursuant to an agreement referred to in clause
       (a) or (b) above or (e) below, PROVIDED, HOWEVER, that the provisions
       contained in such renewal, refunding or extension agreement relating to
       such encumbrance or restriction are not materially more restrictive (as
       conclusively determined in good faith by the Chief Financial Officer of
       NEXTLINK), taken as a whole, than the provisions contained in the
       agreement the subject thereof;
 
           (e)  in the case of clause (3) above, restrictions contained in any
       security agreement (including a Capital Lease Obligation) securing Debt
       of NEXTLINK or a Restricted Subsidiary otherwise permitted under the
       indenture, but only to the extent such restrictions restrict the transfer
       of the property subject to such security agreement;
 
           (f)  in the case of clause (3) above, customary nonassignment
       provisions entered into in the ordinary course of business in leases and
       other agreements;
 
           (g)  any restriction with respect to a Restricted Subsidiary of
       NEXTLINK imposed pursuant to an agreement which has been entered into for
       the sale or disposition of all or substantially all of the Capital Stock
       or assets of such Restricted Subsidiary, PROVIDED that consummation of
       such transaction would not result in a Default or an Event of Default,
       that such restriction terminates if such transaction is not consummated
       and that such consummation or abandonment of such transaction occurs
       within one year of the date such agreement was entered into;
 
           (h)  pursuant to applicable law or regulations;
 
           (i)   pursuant to the indentures and the senior and senior discount
       notes; or
 
           (j)  any restriction on the sale or other disposition of assets or
       property securing Debt as a result of a Permitted Lien on such assets or
       property. (Section 1010)
 
    LIMITATION ON LIENS
 
    NEXTLINK may not, and may not permit any Restricted Subsidiary to, Incur or
suffer to exist any Lien on or with respect to any property or assets now owned
or hereafter acquired to secure any Debt without making, or causing such
Restricted Subsidiary to make, effective provision for securing the senior and
senior discount notes:
 
        (1)  equally and ratably with (or prior to) such Debt as to such
    property for so long as such Debt will be so secured or
 
        (2)  in the event such Debt is Debt of NEXTLINK which is subordinate in
    right of payment to the senior and senior discount notes, prior to such Debt
    as to such property for so long as such Debt will be so secured.
 
    The foregoing restrictions shall not apply to:
 
        (1)  Liens existing on the Issue Date and securing Debt outstanding on
    the Issue Date or securing the senior or senior discount notes or Liens
    securing Debt incurred pursuant to any Bank Credit Agreement or Vendor
    Financing Facility (whether or not such Bank Credit Agreement or Vendor
    Financing Facility was outstanding on the Issue Date);
 
        (2)  Liens securing Debt in an amount which, together with the aggregate
    amount of Debt then outstanding or available under the Bank Credit Agreement
    and the Vendor Financing Facility
 
                                       42
<PAGE>
    (or under refinancings or amendments of such agreements), does not exceed
    1.5 times NEXTLINK's Consolidated Cash Flow Available for Fixed Charges for
    the four full fiscal quarters preceding the Incurrence of such Lien for
    which consolidated financial statements are available, determined on a pro
    forma basis as if such Debt had been Incurred and the proceeds thereof had
    been applied at the beginning of such four fiscal quarters;
 
        (3)  Liens in favor of NEXTLINK or any Wholly Owned Restricted
    Subsidiary of NEXTLINK;
 
        (4)  Liens on real or personal property of NEXTLINK or a Restricted
    Subsidiary of NEXTLINK acquired, constructed or constituting improvements
    made after the Issue Date to secure Purchase Money Debt which is Incurred
    for the construction, acquisition and improvement of Telecommunications
    Assets and is otherwise permitted under the indenture, provided, however,
    that:
 
           (a)  the net proceeds of any Debt secured by such a Lien does not
       exceed 100% of such purchase price or cost of construction or improvement
       of the property subject to such Lien;
 
           (b)  such Lien attaches to such property prior to, at the time of or
       within 180 days after the acquisition, completion of construction or
       commencement of operation of such property; and
 
           (c)  such Lien does not extend to or cover any property other than
       the property (or identifiable portions thereof) acquired, constructed or
       constituting improvements made with the proceeds of such Purchase Money
       Debt (it being understood and agreed that all Debt owed to any single
       lender or group of lenders or outstanding under any single credit
       facility shall be considered a single Purchase Money Debt, whether drawn
       at one time or from time to time);
 
        (5)  Liens to secure Acquired Debt, provided, however, that:
 
           (a)  such Lien attaches to the acquired asset prior to the time of
       the acquisition of such asset and
 
           (b)  such Lien does not extend to or cover any other asset;
 
        (6)  Liens to secure Debt Incurred to extend, renew, refinance or refund
    (or successive extensions, renewals, refinancings or refundings), in whole
    or in part, Debt secured by any Lien referred to in the foregoing clauses
    (1), (2), (4) and (5) so long as such Lien does not extend to any other
    property and the principal amount of Debt so secured is not increased except
    as otherwise permitted under clause (4) of "--Limitation on Consolidated
    Indebtedness";
 
        (7)  Liens securing Debt not otherwise permitted by the foregoing
    clauses (1) through (4) in an amount not to exceed 5% of NEXTLINK's
    Consolidated Tangible Assets determined as of the most recent available
    quarterly or annual balance sheet; and
 
        (8)  Permitted Liens. (Section 1011)
 
    LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
 
    NEXTLINK may not, and may not permit any Restricted Subsidiary to, enter
into any Sale and Leaseback Transaction unless:
 
        (1)  NEXTLINK or such Restricted Subsidiary would be entitled to incur a
    Lien to secure Debt by reason of the provisions described under
    "--Limitation on Liens" above, equal in amount to the Attributable Value of
    the Sale and Leaseback Transaction without equally and ratably securing the
    senior and senior discount notes; or
 
                                       43
<PAGE>
        (2)  the Sale and Leaseback Transaction is treated as an Asset
    Disposition and all of the conditions of the indenture described under
    "--Limitation on Asset Dispositions" (including the provisions concerning
    the application of Net Available Proceeds) are satisfied with respect to
    such Sale and Leaseback Transaction, treating all of the consideration
    received in such Sale and Leaseback Transaction in the same manner as
    consideration received in respect of an Asset Disposition for purposes of
    such covenant. (Section 1012)
 
    LIMITATION ON ASSET DISPOSITIONS
 
    NEXTLINK may not, and may not permit any Restricted Subsidiary to, make any
Asset Disposition in one or more related transactions occurring within any 12
month period unless:
 
        (1)  NEXTLINK or the Restricted Subsidiary, as the case may be, receives
    consideration for such disposition at least equal to the fair market value
    for the assets sold or disposed of as determined by the Board of Directors
    of NEXTLINK in good faith and evidenced by a Board Resolution filed with the
    Trustee, which determination shall be conclusive;
 
        (2)  at least 75% of the consideration for such disposition consists of:
 
           (a)  cash or readily marketable cash equivalents or the assumption of
       Debt or other obligations of NEXTLINK (other than Debt that is
       subordinated to the senior and senior discount notes) or of the
       Restricted Subsidiary and release from all liability on the Debt or other
       obligations assumed;
 
           (b)  Telecommunications Assets; or
 
           (c)  shares of publicly traded Voting Stock of any Person engaged in
       the Telecommunications Business in the United States; and
 
        (3)  all Net Available Proceeds, less any amounts invested in
    Telecommunications Assets (within 180 days prior to and 360 days following
    such disposition), are applied within 360 days of such disposition:
 
           (a)  first, to the permanent repayment or reduction of Debt then
       outstanding under any Bank Credit Agreement or Vendor Financing Facility,
       to the extent such agreements would require such application or prohibit
       payments pursuant to clause (b) following,
 
           (b)  second, to the extent of remaining Net Available Proceeds, to
       make an Offer to Purchase outstanding senior notes at 100% of their
       principal amount, plus accrued interest to the date of purchase, and
       outstanding senior discount notes at 100% of their Accreted Value (if
       such Offer to Purchase is made on or before June   , 2004) or 100% of
       their principal amount plus accrued interest to the date of purchase (if
       such offer to Purchase is made thereafter) and, to the extent required by
       the terms thereof, any other Debt of NEXTLINK that is PARI PASSU with the
       notes at a price no greater than 100% of the principal amount thereof
       plus accrued interest to the date of purchase (or 100% of the Accreted
       Value thereof in the case of Debt issued at an original issue discount)
       and
 
           (c)  third, to the extent of any remaining Net Available Proceeds
       following the completion of the Offer to Purchase, to the repayment of
       other Debt of NEXTLINK or Debt of a Restricted Subsidiary of NEXTLINK, to
       the extent permitted under the terms thereof. To the extent any Net
       Available Proceeds remain after such uses, NEXTLINK and its Restricted
       Subsidiaries may use such amounts for any purposes not prohibited by the
       indenture. (Section 1013)
 
    Notwithstanding the foregoing, these provisions shall not apply to any Asset
Disposition which constitutes a transfer, conveyance, sale, lease or other
disposition of all or substantially all of
 
                                       44
<PAGE>
NEXTLINK's properties or assets as described under "--Mergers, Consolidations
and Certain Sales of Assets."
 
    LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED
     SUBSIDIARIES
 
    NEXTLINK may not, and may not permit any Restricted Subsidiary to, issue,
transfer, convey, sell or otherwise dispose of any shares of Capital Stock of a
Restricted Subsidiary of NEXTLINK or securities convertible or exchangeable
into, or options, warrants, rights or any other interest with respect to,
Capital Stock of a Restricted Subsidiary of NEXTLINK to any person other than
NEXTLINK or a Wholly Owned Restricted Subsidiary of NEXTLINK except:
 
        (1)  in a transaction that complies with the provisions described under
    "--Limitation on Asset Dispositions" above;
 
        (2)  if required, the issuance, transfer, conveyance, sale or other
    disposition of directors' qualifying shares;
 
        (3)  in a transaction in which, or in connection with which, NEXTLINK or
    a Restricted Subsidiary acquires at the same time sufficient Capital Stock
    of such Restricted Subsidiary to at least maintain the same percentage
    ownership interest it had prior to such transaction;
 
        (4)  constituting the issuance of Preferred Stock permitted by the
    provisions described under "--Limitation on Debt and Preferred Stock of
    Restricted Subsidiaries" above; and
 
        (5)  Disqualified Stock issued in exchange for, or upon conversion of,
    or the proceeds of the issuance of which are used to redeem, refinance,
    replace or refund shares of Disqualified Stock of such Restricted
    Subsidiary, provided that the amounts of the redemption obligations of such
    Disqualified Stock shall not exceed the amounts of the redemption
    obligations of, and such Disqualified Stock shall have redemption
    obligations no earlier than those required by, the Disqualified Stock being
    exchanged, converted, redeemed, refinanced, replaced or refunded. (Section
    1014)
 
    TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS
 
    NEXTLINK may not, and may not permit any Restricted Subsidiary to, enter
into any transaction (or series of related transactions) with an Affiliate or
Related Person of NEXTLINK (other than NEXTLINK or a Wholly Owned Restricted
Subsidiary of NEXTLINK), including any Investment, but excluding transactions
pursuant to employee compensation arrangements approved by the Board of
Directors of NEXTLINK, either directly or indirectly, unless such transaction is
on terms no less favorable to NEXTLINK or such Restricted Subsidiary than those
that could reasonably be obtained in a comparable arm's length transaction with
an entity that is not an Affiliate or Related Person and is in the best
interests of NEXTLINK or such Restricted Subsidiary. For any transaction that
involves in excess of $1 million but less than or equal to $15 million, the
Chief Executive Officer of NEXTLINK shall determine that the transaction
satisfies the above criteria and shall evidence such a determination by a
certificate filed with the trustee. For any transaction that involves in excess
of $15 million, NEXTLINK shall also either (1) obtain the approval of the
transaction from the Board of Directors including a majority of the
disinterested members of the Board of Directors or (2) obtain an opinion from a
nationally recognized investment bank or other expert with experience in
appraising the terms and conditions, taken as a whole, of the type of
transaction (or series of related transactions) for which the opinion is
required stating that such transaction (or series of related transactions) is on
terms and conditions, taken as a whole, no less favorable to NEXTLINK or such
Restricted Subsidiary than those that could be obtained in a comparable arm's
length transaction with an entity that is not an Affiliate or Related Person of
NEXTLINK, which opinion shall be filed with the Trustee. This covenant shall
 
                                       45
<PAGE>
not apply to Investments by an Affiliate or a Related Person of NEXTLINK in the
Capital Stock (other than Disqualified Stock) of NEXTLINK or any Restricted
Subsidiary of NEXTLINK. (Section 1015)
 
    CHANGE OF CONTROL
 
    Within 30 days of the occurrence of a Change of Control, NEXTLINK will be
required to make an Offer to Purchase all outstanding senior notes at a purchase
price equal to 101% of their principal amount plus accrued and unpaid interest
to the date of purchase, or, in the case of senior discount notes, 101% of their
Accreted Value (if the Offer to Purchase is made on or before June   , 2004), or
101% of their principal amount plus accrued and unpaid interest to the date of
purchase (if the Offer to Purchase the senior discount notes is consummated
after June   , 2004).
 
    A " Change of Control" will be deemed to have occurred at such time as
either:
 
        (1)  any Person or any Persons acting together that would constitute a
    "group" (a "Group") for purposes of Section 13(d) of the Securities Exchange
    Act of 1934, or any successor provision thereto (other than Eagle River, Mr.
    Craig O. McCaw and their respective Affiliates or an underwriter engaged in
    a firm commitment underwriting on behalf of NEXTLINK), shall beneficially
    own (within the meaning of Rule 13d-3 under the Exchange Act, or any
    successor provision thereto) more than 50% of the aggregate voting power of
    all classes of Voting Stock of NEXTLINK; or
 
        (2)  neither Mr. Craig O. McCaw nor any person designated by him to
    NEXTLINK as acting on his behalf shall be a director of NEXTLINK; or
 
        (3)  during any period of two consecutive years, individuals who at the
    beginning of such period constituted the Board of Directors of NEXTLINK
    (together with any new directors whose election by the Board of Directors of
    NEXTLINK or whose nomination for election by the shareholders was proposed
    by a vote of a majority of the directors of NEXTLINK then still in office
    who were either directors at the beginning of such period or whose election
    or nomination for election was previously so approved) cease for any reason
    to constitute a majority of the Board of Directors of NEXTLINK then in
    office. (Section 1016)
 
    Except as described above with respect to a Change of Control, the
indentures do not contain provisions that permit the holders of the senior and
senior discount notes to require that NEXTLINK repurchase or redeem the notes in
the event of a takeover, recapitalization or similar restructuring.
 
    Restrictions in the indentures described herein on the ability of NEXTLINK
and its Restricted Subsidiaries to incur additional Debt, to grant Liens on its
or their property, to make Restricted Payments and to make Asset Sales may also
make more difficult or discourage a takeover of NEXTLINK, whether favored or
opposed by the management of NEXTLINK. Consummation of any such transaction in
certain circumstances may require redemption or repurchase of the senior and
senior discount notes, and there can be no assurance that NEXTLINK or the
acquiring party will have sufficient financial resources to effect such
redemption or repurchase. Such restrictions and the restrictions on transactions
with Affiliates may, in certain circumstances, make more difficult or discourage
any leveraged buyout of NEXTLINK or any of its Subsidiaries by the management of
NEXTLINK or other Persons. While such restrictions cover a variety of
arrangements which have traditionally been used to effect highly leveraged
transactions, the indentures may not afford the holders of senior and senior
discount notes protection in all circumstances from the adverse aspects of a
highly leveraged transaction, reorganization, restructuring, merger or similar
transaction.
 
    In the event of a Change of Control, the indentures relating to the 9.45%
Notes, the 9% Notes, the 9 5/8% Notes, the 12 1/2% Notes and the 10 3/4% Notes
would require NEXTLINK to make an offer to purchase those securities. NEXTLINK
does not currently have adequate financial resources to effect such repurchases
and repurchase the senior and senior discount notes upon a Change of Control and
 
                                       46
<PAGE>
there can be no assurance that NEXTLINK will have such resources in the future.
The inability of NEXTLINK to repurchase the senior and senior discount notes
upon a Change of Control would constitute an Event of Default.
 
    In addition, there may be restrictions contained in instruments evidencing
Debt incurred by NEXTLINK or its Restricted Subsidiaries permitted under the
indentures which restrict or prohibit the ability of NEXTLINK to effect any
repurchase required under the indentures in connection with a Change of Control.
 
    In the event that NEXTLINK makes an Offer to Purchase the senior and senior
discount notes, NEXTLINK intends to comply with any applicable securities laws
and regulations, including any applicable requirements of Section 14(e) of, and
Rule 14e-1 under, the Exchange Act.
 
    PROVISION OF FINANCIAL INFORMATION
 
    NEXTLINK has agreed that, for so long as any senior or senior discount notes
remain outstanding, it will file with the trustee within 15 days after it files
them with the SEC, copies of the annual and quarterly reports and the
information, documents, and other reports that NEXTLINK is required to file with
the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC Reports").
In the event NEXTLINK shall cease to be required to file SEC Reports pursuant to
the Exchange Act, NEXTLINK will nevertheless continue to file such reports with
the SEC (unless the SEC will not accept such a filing) and the trustee. NEXTLINK
will furnish copies of the SEC Reports to the holders of senior or senior
discount notes at the time NEXTLINK is required to file the same with the
trustee and will make such information available to investors who request it in
writing. (Section 1017)
 
    LIMITATION ON USE OF PROCEEDS
 
    NEXTLINK will apply the net proceeds from the sale of the senior and senior
discount notes toward the construction, improvement and acquisition by NEXTLINK,
or one or more Restricted Subsidiaries of NEXTLINK or Joint Ventures, of
Telecommunications Assets of NEXTLINK, such Restricted Subsidiaries or Joint
Ventures (or will advance such net proceeds to such Restricted Subsidiaries of
NEXTLINK or Joint Ventures for such purpose); provided, however, pending such
application, the net proceeds of the sale of the senior or senior discount notes
may be invested in Marketable Securities. (Section 1020)
 
MERGERS, CONSOLIDATIONS AND CERTAIN SALES OF ASSETS
 
    NEXTLINK may not, in a single transaction or a series of related
transactions:
 
        (1)  consolidate with or merge into any other Person or permit any other
    Person to consolidate with or merge into NEXTLINK (other than a
    consolidation or merger of a Wholly Owned Restricted Subsidiary organized
    under the laws of a State of the United States into NEXTLINK), or
 
        (2)  directly or indirectly, transfer, sell, lease or otherwise dispose
    of all or substantially all of its assets (determined on a consolidated
    basis for NEXTLINK and its Restricted Subsidiaries taken as a whole and
    provided that the creation of a Lien on or in any of its assets shall not in
    and of itself constitute the transfer, sale, lease or disposition of the
    assets subject to the Lien),
 
unless:
 
           (a)  in a transaction in which NEXTLINK does not survive or in which
       NEXTLINK sells, leases or otherwise disposes of all or substantially all
       of its assets to any other Person, the successor entity to NEXTLINK shall
       be a corporation organized under the laws of the United States of America
       or any State thereof or the District of Columbia and shall expressly
       assume, by a supplemental indenture executed and delivered to the trustee
       in form satisfactory to the trustee, all of NEXTLINK's obligations under
       the indentures;
 
                                       47
<PAGE>
           (b)  immediately after giving pro forma effect to such transaction as
       if such transaction had occurred at the beginning of the last full fiscal
       quarter immediately prior to the consummation of such transaction with
       the appropriate adjustments with respect to the transaction being
       included in such pro forma calculation and treating any Debt which
       becomes an obligation of NEXTLINK or a Subsidiary as a result of such
       transaction as having been incurred by NEXTLINK or such Subsidiary at the
       time of the transaction, no Default or Event of Default shall have
       occurred and be continuing;
 
           (c)  immediately after giving effect to such transaction, the
       Consolidated Net Worth of NEXTLINK (or other successor entity to
       NEXTLINK) is equal to or greater than that of NEXTLINK immediately prior
       to the transaction;
 
           (d)  if, as a result of any such transaction, property or assets of
       NEXTLINK would become subject to a Lien prohibited by the provisions of
       the indentures described under "Covenants--Limitation on Liens" above,
       NEXTLINK or the successor entity to NEXTLINK shall have secured the notes
       as required by said covenant; and
 
           (e)  certain other conditions are met. (Section 801)
 
    In the event of any transaction (other than a lease) described in and
complying with the immediately preceding paragraph in which NEXTLINK is not the
surviving Person and the surviving Person assumes all the obligations of
NEXTLINK under the senior and senior discount notes and each of the indentures
pursuant to a supplemental indenture, such surviving Person shall succeed to,
and be substituted for, and may exercise every right and power of, NEXTLINK, and
NEXTLINK will be discharged from its obligations under the indentures and the
senior and senior discount notes; provided that solely for the purpose of
calculating amounts described in clause (c) under "Covenants-- Limitations on
Restricted Payments," any such surviving Person shall only be deemed to have
succeeded to and be substituted for NEXTLINK with respect to the period
subsequent to the effective time of such transaction, and NEXTLINK (before
giving effect to such transaction) shall be deemed to be the "Indenture obligor"
for such purposes for all prior periods. (Section 801)
 
    The meaning of the phrase "all or substantially all" as used above varies
according to the facts and circumstances of the subject transaction, has no
clearly established meaning under relevant law and is subject to judicial
interpretation. Accordingly, in certain circumstances, there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of "all or substantially all" of the assets of NEXTLINK, and
therefore it may be unclear whether the foregoing provisions are applicable.
 
CERTAIN DEFINITIONS
 
    Set forth below is a summary of some of the definitions used in the
indentures. Reference is made to the indentures for the definition of all such
terms, as well as any other term used herein for which no definition is
provided. (Section 101)
 
    "Acquired Debt" means, with respect to any specified Person,
 
        (1)  Debt of any other Person existing at the time such Person merges
    with or into or consolidates with or becomes a Restricted Subsidiary of such
    specified Person; and
 
        (2)  Debt secured by a Lien encumbering any asset acquired by such
    specified Person, which Debt was not Incurred in anticipation of, and was
    outstanding prior to, such merger, consolidation or acquisition.
 
                                       48
<PAGE>
    "Accreted Value" means, as of any date prior to June    , 2004, an amount
per $1,000 principal amount at stated maturity of that is equal to the sum of:
 
        (1) the offering price ($    per $1000 principal amount at stated
    maturity of such senior discount notes) of the senior discount notes and
 
        (2) the portion of the excess of the principal amount of such senior
    discount note over the offering price which shall have been amortized on a
    daily basis and compounded semi-annually on each     and     at the rate of
            per annum from the Issue Date computed on the basis of a 360 day
    year of twelve 30 day months, and as of any date on or after June   , 2004,
    the principal amount of each senior discount note.
 
    "Affiliate" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
 
    "Asset Disposition" by NEXTLINK or any Restricted Subsidiary means any
transfer, conveyance, sale, lease or other disposition (other than a creation of
a Lien) by such Person (including a consolidation or merger or other sale of any
such Restricted Subsidiary with, into or to another Person in a transaction in
which such Restricted Subsidiary ceases to be a Restricted Subsidiary of
NEXTLINK, but excluding a disposition by a Restricted Subsidiary of NEXTLINK to
NEXTLINK or a Restricted Subsidiary of NEXTLINK or by NEXTLINK to a Restricted
Subsidiary of NEXTLINK) of:
 
        (1)  shares of Capital Stock or other ownership interests of a
    Restricted Subsidiary of NEXTLINK, (including the issuance of Capital Stock
    by a Restricted Subsidiary) other than as permitted by the provisions of the
    Indenture described above under the Caption "--Limitation on Debt and
    Preferred Stock of Restricted Subsidiaries" or pursuant to a transaction in
    compliance with the covenant described under "Mergers, Consolidations and
    Certain Sales of Assets" above;
 
        (2)  substantially all of the assets of NEXTLINK or any of, its
    Restricted Subsidiaries representing a division or line of business (other
    than as part of a Permitted Investment); or
 
        (3)  other assets or rights of NEXTLINK or any of its Restricted
    Subsidiaries other than:
 
           (a)  in the ordinary course of business or
 
           (b)  that constitutes a Restricted Payment which is permitted under
       the covenant "--Limitation on Restricted Payments" above; provided that a
       transaction described in clauses (1), (2) and (3) shall constitute an
       Asset Disposition only if the aggregate consideration for such transfer,
       conveyance, sale, lease or other disposition is equal to $5 million or
       more in any 12 month period.
 
    "Attributable Value" means, as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation, and at any
date as of which the amount thereof is to be determined, the total net amount of
rent required to be paid by such Person under such lease during the initial term
thereof as determined in accordance with generally accepted accounting
principles, discounted from the last date of such initial term to the date of
determination at a rate per annum equal to the discount rate which would be
applicable to a Capital Lease Obligation with like term in accordance with
generally accepted accounting principles. The net amount of rent required to be
paid under any such lease for any such period shall be the aggregate amount of
rent payable by the lessee with respect to such period after excluding amounts
required to be paid on account of insurance, taxes, assessments, utility,
operating and labor costs and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of penalty, such net amount shall also
include the lesser of
 
                                       49
<PAGE>
the amount of such penalty (in which case no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated) or the rent which would otherwise be required to be paid
if such lease is not so terminated. "Attributable Value" means, as to a Capital
Lease Obligation, the principal amount thereof.
 
    "Bank Credit Agreement" means any one or more credit agreements (which may
include or consist of revolving credits) between NEXTLINK or any Restricted
Subsidiary of NEXTLINK and one or more banks or other financial institutions
providing financing for the business of NEXTLINK and its Restricted
Subsidiaries.
 
    "Capital Lease Obligation" of any Person means the obligation to pay rent or
other payment amounts under a lease of (or other Debt arrangements conveying the
right to use) real or personal property of such Person which is required to be
classified and accounted for as a capital lease or a liability on the face of a
balance sheet of such Person in accordance with generally accepted accounting
principles (a "Capital Lease"). The stated maturity of such obligation shall be
the date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the lessee
without payment of a penalty. The principal amount of such obligation shall be
the capitalized amount thereof that would appear on the face of a balance sheet
of such Person in accordance with generally accepted accounting principles.
 
    "Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person.
 
    "Common Equity" of any Person means Capital Stock of such Person that is not
Disqualified Stock, and a "sale of Common Equity" includes any sale of Common
Equity effected by private sale or public offering.
 
    "Consolidated Capital Ratio" of any Person as of any date means the ratio
of:
 
        (1)  the aggregate consolidated principal amount of Debt (or in the case
    of Debt issued at a discount the accreted amount thereof) of such Person
    then outstanding (which amount of Debt shall be reduced by any amount of
    cash or cash equivalent collateral securing on a perfected basis and
    dedicated for disbursement exclusively to the payment of principal of and
    interest on such Debt)
    to
 
        (2)  the aggregate consolidated Capital Stock (other than Disqualified
    Stock) and paid in capital (other than in respect of Disqualified Stock) of
    such Person as of such date.
 
    "Consolidated Cash Flow Available for Fixed Charges" for any period means
the Consolidated Net Income of NEXTLINK and its Restricted Subsidiaries for such
period increased by the sum of:
 
        (1)  Consolidated Interest Expense of NEXTLINK and its Restricted
    Subsidiaries for such period, plus
 
        (2)  Consolidated Income Tax Expense of NEXTLINK and its Restricted
    Subsidiaries for such period, plus
 
        (3)  the consolidated depreciation and amortization expense included in
    the income statement of NEXTLINK and its Restricted Subsidiaries for such
    period plus
 
        (4)  any noncash expense for such period (excluding any noncash charge
    to the extent that it requires an accrual of or a reserve for cash
    disbursements in any future period), plus
 
        (5)  any charge related to any premium or penalty paid in connection
    with redeeming or retiring any Debt prior to its stated maturity; PROVIDED,
    HOWEVER, that there shall be excluded
 
                                       50
<PAGE>
    therefrom the Consolidated Cash Flow Available for Fixed Charges (if
    positive) of any Restricted Subsidiary of NEXTLINK (calculated separately
    for such Restricted Subsidiary in the same manner as provided above for
    NEXTLINK) that is subject to a restriction which prevents the payment of
    dividends or the making of distributions to NEXTLINK or another Restricted
    Subsidiary of NEXTLINK to the extent of such restriction.
 
    "Consolidated Income Tax Expense" for any period means the consolidated
provision for income taxes of NEXTLINK and its Restricted Subsidiaries for such
period calculated on a consolidated basis in accordance with generally accepted
accounting principles.
 
    "Consolidated Interest Expense" means for any period the consolidated
interest expense included in a consolidated income statement (excluding interest
income) of NEXTLINK and its Restricted Subsidiaries for such period calculated
on a consolidated basis in accordance with generally accepted accounting
principles, including without limitation or duplication (or, to the extent not
so included, with the addition of):
 
        (1)  the amortization of Debt discounts;
 
        (2)  any payments or fees with respect to letters of credit, bankers'
    acceptances or similar facilities;
 
        (3)  fees with respect to interest rate swap or similar agreements or
    foreign currency hedge, exchange or similar agreements;
 
        (4)  Preferred Dividends of NEXTLINK and its Restricted Subsidiaries
    (other than dividends paid in shares of Preferred Stock that is not
    Disqualified Stock) declared and paid or payable;
 
        (5)  accrued Disqualified Stock dividends of NEXTLINK and its Restricted
    Subsidiaries, whether or not declared or paid;
 
        (6)  interest on Debt guaranteed by NEXTLINK and its Restricted
    Subsidiaries; and
 
        (7)  the portion of any Capital Lease Obligation paid or accrued during
    such period that is allocable to interest expense.
 
    "Consolidated Net Income" for any period means the consolidated net income
(or loss) of NEXTLINK and its Restricted Subsidiaries for such period determined
on a consolidated basis in accordance with generally accepted accounting
principles; PROVIDED that there shall be excluded therefrom:
 
        (1)  the net income (or loss) of any Person acquired by NEXTLINK or a
    Restricted Subsidiary of NEXTLINK in a pooling of interests transaction for
    any period prior to the date of such transaction;
 
        (2)  the net income (or loss) of any Person that is not a Restricted
    Subsidiary of NEXTLINK except to the extent of the amount of dividends or
    other distributions actually paid to NEXTLINK or a Restricted Subsidiary of
    NEXTLINK by such Person during such period;
 
        (3)  gains or losses on Asset Dispositions by NEXTLINK or its Restricted
    Subsidiaries;
 
        (4)  all extraordinary gains and extraordinary losses;
 
        (5)  the cumulative effect of changes in accounting principles;
 
        (6)  noncash gains or losses resulting from fluctuations in currency
    exchange rates;
 
        (7)  any noncash gain or loss realized on the termination of any
    employee pension benefit plan; and
 
                                       51
<PAGE>
        (8)  the tax effect of any of the items described in clauses (1) through
    (8) above, provided, further, that for purposes of any determination
    pursuant to the provisions described under "Covenants--Limitation on
    Restricted Payments," there shall further be excluded therefrom the net
    income (but not net loss) of any Restricted Subsidiary of NEXTLINK that is
    subject to a restriction which prevents the payment of dividends or the
    making of distributions to NEXTLINK or another Restricted Subsidiary of
    NEXTLINK to the extent of such restriction.
 
    "Consolidated Net Worth" of any Person means the consolidated stockholders'
equity of such Person, determined on a consolidated basis in accordance with
generally accepted accounting principles, less amounts attributable to
Disqualified Stock of such Person; PROVIDED that, with respect to NEXTLINK,
adjustments following the date of the indentures to the accounting books and
records of NEXTLINK in accordance with Accounting Principles Board Opinions Nos.
16 and 17 (or successor opinions thereto) or otherwise resulting from the
acquisition of control of NEXTLINK by another Person shall not be given effect
to.
 
    "Consolidated Tangible Assets" of any Person means the total amount of
assets (less applicable reserves and other properly deductible items) which
under generally accepted accounting principles would be included on a
consolidated balance sheet of such Person and its Restricted Subsidiaries after
deducting therefrom all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, which in each case under
generally accepted accounting principles would be included on such consolidated
balance sheet; provided that, with respect to NEXTLINK, adjustments following
the date of the indentures to the accounting books and records of NEXTLINK in
accordance with Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
control of NEXTLINK by another Person shall not be given effect to.
 
    "Debt" means (without duplication), with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent:
 
        (1)  every obligation of such Person for money borrowed;
 
        (2)  every obligation of such Person evidenced by bonds, debentures,
    notes or other similar instruments, including any such obligations Incurred
    in connection with the acquisition of property, assets or businesses;
 
        (3)  every reimbursement obligation of such Person with respect to
    letters of credit, bankers' acceptances or similar facilities issued for the
    account of such Person;
 
        (4)  every obligation of such Person issued or assumed as the deferred
    purchase price of property or services (including securities repurchase
    agreements but excluding trade accounts payable or accrued liabilities
    arising in the ordinary course of business which are not overdue or which
    are being contested in good faith);
 
        (5)  every Capital Lease Obligation of such Person;
 
        (6)  all Receivables Sales of such Person, together with any obligation
    of such Person to pay any discount, interest, fees, indemnities, penalties,
    recourse, expenses or other amounts in connection therewith;
 
        (7)  all obligations to redeem Disqualified Stock issued by such Person;
 
        (8)  every obligation under Interest Rate and Currency Protection
    Agreements of such Person; and
 
        (9)  every obligation of the type referred to in clauses (1) through (8)
    of another Person and all dividends of another Person the payment of which,
    in either case, such Person has Guaranteed.
 
                                       52
<PAGE>
    The "amount" or "principal amount" of Debt at any time of determination as
used herein represented by:
 
        (1)  any Debt issued at a price that is less than the principal amount
    at maturity thereof, shall be the amount of the liability in respect thereof
    determined in accordance with generally accepted accounting principles;
 
        (2)  any Receivables Sale, shall be the amount of the unrecovered
    capital or principal investment of the purchaser (other than NEXTLINK or a
    Wholly Owned Restricted Subsidiary of NEXTLINK) thereof, excluding amounts
    representative of yield or interest earned on such investment;
 
        (3)  any Disqualified Stock, shall be the maximum fixed redemption or
    repurchase price in respect thereof;
 
        (4)  any Capital Lease Obligation, shall be determined in accordance
    with the definition thereof; or
 
        (5)  any Permitted Interest Rate or Currency Protection Agreement, shall
    be zero. In no event shall Debt include any liability for taxes.
 
    "Default" means an event that with the passing of time or the giving of
notice or both shall constitute an Event of Default.
 
    "Disqualified Stock" of any Person means any Capital Stock of such Person
(other than Capital Stock outstanding on the Issue Date) which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final Stated Maturity of the Securities (or, if earlier, the date as of which
the Securities have been paid in full); PROVIDED, HOWEVER, that any Preferred
Stock which would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require NEXTLINK to repurchase or redeem
such Preferred Stock upon the occurrence of an asset sale or a Change of Control
occurring prior to the final Stated Maturity of the senior or senior discount
notes shall not constitute Disqualified Stock if the asset sale or change of
control provisions applicable to such Preferred Stock are no more favorable to
the holders of such Preferred Stock than the provisions applicable to the senior
or senior discount notes contained in the covenant described under
"Covenants--Limitation on Asset Dispositions" or "Covenants--Change of Control"
and such Preferred Stock specifically provides that NEXTLINK will not repurchase
or redeem any such stock pursuant to such provisions prior to NEXTLINK's
repurchase of such notes as are required to be repurchased pursuant to the
covenant described under "Covenants--Limitation on Asset Dispositions" or
"Covenants--Change of Control".
 
    "Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt is rated "A 3" or higher, "A" or higher or "A" or
higher according to Moody's Investors Service, Inc., Standard & Poor's Ratings
Group or Duff & Phelps Credit Rating Co. (or such similar equivalent rating by
at least one "nationally recognized statistical rating organization" (as defined
in Rule 436 under the Securities Act)) respectively, at the time as of which any
investment or rollover therein is made.
 
    "Eligible Receivables" means, at any time, Receivables of NEXTLINK and its
Restricted Subsidiaries, as evidenced on the most recent quarterly consolidated
balance sheet of NEXTLINK as at a date at least 45 days prior to such time
arising in the ordinary course of business of NEXTLINK or any Restricted
Subsidiary of NEXTLINK.
 
    "Event of Default" has the meaning set forth under "Events of Default"
below.
 
                                       53
<PAGE>
    "Exchange Act" means the Securities Exchange Act of 1934, as amended (or any
successor act) and the rules and regulations thereunder.
 
    "Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States is pledged and which
have a remaining weighted average life to maturity of not more than 18 months
from the date of Investment therein.
 
    "Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing, or having the economic effect of guaranteeing, any
Debt of any other Person (the "primary obligor") in any manner, whether directly
or indirectly, and including, without limitation, any obligation of such Person:
 
        (1)  to purchase or pay (or advance or supply funds for the purchase or
    payment of) such Debt or to purchase (or to advance or supply funds for the
    purchase of) any security for the payment of such Debt;
 
        (2)  to purchase property, securities or services for the purpose of
    assuring the holder of such Debt of the payment of such Debt; or
 
        (3)  to maintain working capital, equity capital or other financial
    statement condition or liquidity of the primary obligor so as to enable the
    primary obligor to pay such Debt (and "Guaranteed", "Guaranteeing" and
    "Guarantor" shall have meanings correlative to the foregoing):
 
PROVIDED, HOWEVER, that the Guarantee by any Person shall not include
endorsements by such Person for collection or deposit, in either case, in the
ordinary course of business; and provided further, that the incurrence by a
Restricted Subsidiary of NEXTLINK of a lien permitted under clause (4) of the
second paragraph of the "Limitation on Liens" covenant shall not be deemed to
constitute a Guarantee by such Restricted Subsidiary of any Purchase Money Debt
of NEXTLINK secured thereby.
 
    "Incur" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
including by acquisition of Subsidiaries or the recording, as required pursuant
to generally accepted accounting principles or otherwise, of any such Debt or
other obligation on the balance sheet of such Person (and "Incurrence",
"Incurred", "Incurrable" and "Incurring" shall have meanings correlative to the
foregoing); provided, however, that a change in generally accepted accounting
principles that results in an obligation of such Person that exists at such time
becoming Debt shall not be deemed an Incurrence of such Debt and that neither
the accrual of interest nor the accretion of original issue discount shall be
deemed an Incurrence of Debt; provided, further, however, that NEXTLINK may
elect to treat all or any portion of revolving credit debt of NEXTLINK or a
Subsidiary as being Incurred from and after any date beginning the date the
revolving credit commitment is extended to NEXTLINK or a Subsidiary, by
furnishing notice thereof to the Trustee, and any borrowings or reborrowings by
NEXTLINK or a Subsidiary under such commitment up to the amount of such
commitment designated by NEXTLINK as Incurred shall not be deemed to be new
lncurrences of Debt by NEXTLINK or such Subsidiary.
 
    "Interest Rate or Currency Protection Agreement" of any Person means any
forward contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreements) relating to, or the value of which is dependent upon, interest rates
or currency exchange rates or indices.
 
    "Investment" by any Person means any direct or indirect loan, advance or
other extension of credit or capital contribution (by means of transfers of cash
or other property to others or payments for property or services for the account
or use of others, or otherwise) to, or purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities or evidence of Debt issued by, any
other
 
                                       54
<PAGE>
Person, including any payment on a Guarantee of any obligation of such other
Person, but excluding any loan, advance or extension of credit to an employee of
NEXTLINK or any of its Restricted Subsidiaries in the ordinary course of
business, accounts receivables and other commercially reasonable extensions of
trade credit.
 
    "Issue Date" means        , 1999.
 
    "Joint Venture" means a corporation, partnership or other entity engaged in
one or more Telecommunications Businesses as to which NEXTLINK (directly or
through one or more Restricted Subsidiaries) exercises managerial control and in
which NEXTLINK owns
 
        (1)  a 50% or greater interest; or
 
        (2)  a 30% or greater interest, together with options or other
    contractual rights, exercisable not more than seven years after NEXTLINK's
    initial Investment in such Joint Venture, to increase its interest to not
    less than 50%.
 
    "Lien" means, with respect to any property or assets, any mortgage or deed
of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
 
    "Marketable Securities" means:
 
        (1)  Government Securities;
 
        (2)  any time or demand deposit account, money market deposit and
    certificate of deposit maturing not more than 365 days after the date of
    acquisition issued by, or time deposit of, an Eligible Institution;
 
        (3)  commercial paper maturing not more than 365 days after the date of
    acquisition issued by a corporation (other than an Affiliate of NEXTLINK)
    with a rating, at the time as of which any investment therein is made, of
    "P1" or higher according to Moody's Investors Service, Inc., "A1" or higher
    according to Standard & Poor's Ratings Group or "A1" or higher according to
    Duff & Phelps Credit Rating Co. (or such similar equivalent rating by at
    least one "nationally recognized statistical rating organization" (as
    defined in Rule 436 under the Securities Act));
 
        (4)  any banker's acceptances or money market deposit accounts issued or
    offered by an Eligible Institution;
 
        (5)  repurchase obligations with a term of not more than 7 days for
    Government Securities entered into with an Eligible Institution;
 
        (6)  auction rate preferred stocks of any corporation maturing within 90
    days after the date of acquisition by NEXTLINK thereof, having a rating of
    at least AA by Standard & Poor's; and
 
        (7)  any fund investing exclusively in investments of the types
    described in clauses (1) through (6) above.
 
    "Net Available Proceeds" from any Asset Disposition by any Person means cash
or readily marketable cash equivalents received (including by way of sale or
discounting of a note, installment receivable or other receivable, but excluding
any other consideration received in the form of
 
                                       55
<PAGE>
assumption by the acquiror of Debt or other obligations relating to such
properties or assets) therefrom by such Person, net of:
 
        (1)  all legal, title and recording tax expenses, commissions and other
    fees and expenses Incurred and all federal, state, provincial, foreign and
    local taxes (including taxes payable upon payment or other distribution of
    funds from a foreign subsidiary to NEXTLINK or another Subsidiary of
    NEXTLINK) required to be accrued as a liability as a consequence of such
    Asset Disposition;
 
        (2)  all payments made by such Person or its Restricted Subsidiaries on
    any Debt which is secured by such assets in accordance with the terms of any
    Lien upon or with respect to such assets or which must by the terms of such
    Lien, or in order to obtain a necessary consent to such Asset Disposition or
    by applicable law, be repaid out of the proceeds from such Asset
    Disposition;
 
        (3)  all distributions and other payments made to minority interest
    holders in Restricted Subsidiaries of such Person or joint ventures as a
    result of such Asset Disposition;
 
        (4)  appropriate amounts to be provided by such Person or any Restricted
    Subsidiary thereof, as the case may be, as a reserve in accordance with
    generally accepted accounting principles against any liabilities associated
    with such assets and retained by such Person or any Restricted Subsidiary
    thereof, as the case may be, after such Asset Disposition, including,
    without limitation, liabilities under any indemnification obligations and
    severance and other employee termination costs associated with such Asset
    Disposition, in each case as determined by the Board of Directors of
    NEXTLINK, in its reasonable good faith judgment evidenced by a Board
    Resolution filed with the Trustee; provided, however, that any reduction in
    such reserve within twelve months following the consummation of such Asset
    Disposition will be treated for all purposes of the indentures and the
    senior and senior discount as a new Asset Disposition at the time of such
    reduction with Net Available Proceeds equal to the amount of such reduction;
    and
 
        (5)  any consideration for an Asset Disposition (which would otherwise
    constitute Net Available Proceeds) that is required to be held in escrow
    pending determination of whether a purchase price adjustment will be made,
    but amounts under this clause shall become Net Available Proceeds at such
    time and to the extent such amounts are released to such Person.
 
    "Offer to Purchase" means a written offer (the "Offer") sent by NEXTLINK by
first class mail, postage prepaid, to each holder at his address appearing in
the note register on the date of the Offer describing the transaction or
transactions necessitating the Offer and offering to purchase up to the
principal amount of the notes specified in such Offer at the purchase price
specified in such Offer (as determined pursuant to the indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such Offer and a settlement date (the "Purchase Date")
for purchase of notes within five Business Days after the Expiration Date. The
Offer shall contain all instructions and materials necessary to enable the
holders to tender the senior or senior discount notes pursuant to the Offer to
Purchase.
 
    "Permitted Interest Rate or Currency Protection Agreement" of any Person
means any Interest Rate or Currency Protection Agreement entered into with one
or more financial institutions in the ordinary course of business that is
designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.
 
                                       56
<PAGE>
    "Permitted Investment" means:
 
        (1)  any Investment in a Joint Venture (including the purchase or
    acquisition of any Capital Stock of a Joint Venture), provided the aggregate
    amount of all outstanding Investments pursuant to this clause (1) in Joint
    Ventures in which NEXTLINK owns, directly or indirectly, a less than 50%
    interest shall not exceed $25 million;
 
        (2)  any Investment in any Person as a result of which such Person
    becomes a Restricted Subsidiary or, subject to the proviso to clause (1) of
    this definition, becomes a Joint Venture of NEXTLINK;
 
        (3)  any Investment in Marketable Securities;
 
        (4)  Investments in Permitted Interest Rate or Currency Protection
    Agreements;
 
        (5)  Investments made as a result of the receipt of noncash
    consideration from an Asset Disposition that was made pursuant to and in
    compliance with the covenant described under "Covenants--Limitation on Asset
    Dispositions" above; and
 
        (6)  other Investments in an aggregate amount not to exceed the
    aggregate net proceeds received by NEXTLINK or any Restricted Subsidiary
    after the date of the Indenture from the sale or liquidation of any
    Unrestricted Subsidiary or any interest therein (except to the extent that
    any such amount is included in the calculation of Consolidated Net Income).
 
    "Permitted Liens" means:
 
        (1)  Liens for taxes, assessments, governmental charges or claims which
    are not yet delinquent or which are being contested in good faith by
    appropriate proceedings, if a reserve or other appropriate provision, if
    any, as shall be required in conformity with generally accepted accounting
    principles shall have been made therefor;
 
        (2)  other Liens incidental to the conduct of NEXTLINK's and its
    Restricted Subsidiaries' business or the ownership of its property and
    assets not securing any Debt, and which do not in the aggregate materially
    detract from the value of NEXTLINK's and its Restricted Subsidiaries'
    property or assets when taken as a whole, or materially impair the use
    thereof in the operation of its business;
 
        (3)  Liens with respect to assets of a Restricted Subsidiary granted by
    such Restricted Subsidiary to NEXTLINK to secure Debt owing to NEXTLINK;
 
        (4)  pledges and deposits made in the ordinary course of business in
    connection with workers' compensation, unemployment insurance and other
    types of statutory obligations (including to secure government contracts);
 
        (5)  deposits made to secure the performance of tenders, bids, leases,
    and other obligations of like nature incurred in the ordinary course of
    business (exclusive of obligations for the payment of borrowed money);
 
        (6)  zoning restrictions, servitudes, easements, rights-of-way,
    restrictions and other similar charges or encumbrances incurred in the
    ordinary course of business which, in the aggregate, do not materially
    detract from the value of the property subject thereto or interfere with the
    ordinary conduct of the business of NEXTLINK or its Restricted Subsidiaries;
 
        (7)  Liens arising out of judgments or awards against NEXTLINK or any
    Restricted Subsidiary with respect to which NEXTLINK or such Restricted
    Subsidiary is prosecuting an appeal or proceeding for review and NEXTLINK or
    such Restricted Subsidiary is maintaining adequate reserves in accordance
    with generally accepted accounting principles;
 
                                       57
<PAGE>
        (8)  any interest or title of a lessor in the property subject to any
    lease other than a Capital Lease; and
 
        (9)  any statutory warehousemen's, materialmen's or other similar Liens
    for sums not then due and payable (or which, if due and payable, are being
    contested in good faith and with respect to which adequate reserves are
    being maintained to the extent required by generally accepted accounting
    principles).
 
    "Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization, government or agency or political subdivision thereof or any other
entity.
 
    "Preferred Dividends" for any Person means for any period the quotient
determined by dividing the amount of dividends and distributions paid or accrued
(whether or not declared) on Preferred Stock of such Person during such period
calculated in accordance with generally accepted accounting principles, by 1
minus the maximum statutory income tax rate then applicable to NEXTLINK
(expressed as a decimal).
 
    "Preferred Stock" of any Person means Capital Stock of such Person of any
class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
 
    "Purchase Money Debt" means
 
        (1)  Acquired Debt Incurred in connection with the acquisition of
    Telecommunications Assets and
 
        (2)  Debt of NEXTLINK or of any Restricted Subsidiary of NEXTLINK
    (including, without limitation, Debt represented by Bank Credit Agreements,
    Capital Lease Obligations, Vendor Financing Facilities, mortgage financings
    and purchase money obligations) Incurred for the purpose of financing all or
    any part of the cost of construction, acquisition or improvement by NEXTLINK
    or any Restricted Subsidiary of NEXTLINK or any Joint Venture of any
    Telecommunications Assets of NEXTLINK, any Restricted Subsidiary of NEXTLINK
    or any Joint Venture, and including any related notes, Guarantees,
    collateral documents, instruments and agreements executed in connection
    therewith, as the same may be amended, supplemented, modified or restated
    from time to time.
 
    "Receivables" means receivables, chattel paper, instruments, documents or
intangibles evidencing or relating to the right to payment of money in respect
of the sale of goods or services.
 
    "Receivables Sale" of any Person means any sale of Receivables of such
Person (pursuant to a purchase facility or otherwise), other than in connection
with a disposition of the business operations of such Person relating thereto or
a disposition of defaulted Receivables for purpose of collection and not as a
financing arrangement.
 
    "Related Person" of any Person means any other Person directly or indirectly
owning
 
        (1)  10% or more of the Outstanding Common Equity of such Person (or, in
    the case of a Person that is not a corporation, 10% or more of the equity
    interest in such Person) or
 
        (2)  10% or more of the combined voting power of the Voting Stock of
    such Person.
 
    "Restricted Subsidiary" of NEXTLINK means any Subsidiary, whether existing
on or after the date of the Indenture, unless such Subsidiary is an Unrestricted
Subsidiary.
 
                                       58
<PAGE>
    "Sale and Leaseback Transaction" of any Person means an arrangement with any
lender or investor or to which such lender or investor is a party providing for
the leasing by such Person of any property or asset of such Person which has
been or is being sold or transferred by such Person more than 365 days after the
acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or asset. The stated maturity of such arrangement shall be the date of
the last payment of rent or any other amount due under such arrangement prior to
the first date on which such arrangement may be terminated by the lessee without
payment of a penalty.
 
    "Significant Subsidiary" means a Restricted Subsidiary that is a
"significant subsidiary" as defined in Rule 102(w) of Regulation S-X under the
Securities Act and the Exchange Act.
 
    "Subordinated Debt" means Debt of NEXTLINK as to which the payment of
principal of (and premium, if any) and interest and other payment obligations in
respect of such Debt shall be subordinate to the prior payment in full of the
notes to at least the following extent:
 
        (1)  no payments of principal of (or premium, if any) or interest on or
    otherwise due in respect of such Debt may be permitted for so long as any
    default in the payment of principal (or premium, if any) or interest on the
    senior and senior discount notes exists;
 
        (2)  in the event that any other default that with the passing of time
    or the giving of notice, or both, would constitute an Event of Default
    exists with respect to the notes, upon notice by 25% or more in principal
    amount of the notes to the trustee, the trustee shall have the right to give
    notice to NEXTLINK and the holders of such Debt (or trustees or agents
    therefor) of a payment blockage, and thereafter no payments of principal of
    (or premium, if any) or interest on or otherwise due in respect of such Debt
    may be made for a period of 179 days from the date of such notice or for the
    period until such default has been cured or waived or ceased to exist and
    any acceleration of the senior and senior discount notes has been rescinded
    or annulled, whichever period is shorter (which Debt may provide that no new
    period of payment blockage may be commenced by a payment blockage notice
    unless and until 360 days have elapsed since the effectiveness of the
    immediately prior notice, no nonpayment default that existed or was
    continuing on the date of delivery of any payment blockage notice to such
    holders (or such agents or trustees) shall be, or be made, the basis for a
    subsequent payment blockage notice and failure of NEXTLINK to make payment
    on such Debt when due or within any applicable grace period, whether or not
    on account of such payment blockage provisions, shall constitute an event of
    default thereunder); and
 
        (3)  such Debt may not provide for payments of principal of such Debt at
    the stated maturity thereof or by way of a sinking fund applicable thereto
    or by way of any mandatory redemption, defeasance, retirement or repurchase
    thereof by NEXTLINK (including any redemption, retirement or repurchase
    which is contingent upon events or circumstances, but executing any
    retirement required by virtue of acceleration of such Debt upon an event of
    default thereunder), in each case prior to the final Stated Maturity of the
    senior or senior discount notes or permit redemption or other retirement
    (including pursuant to an offer to purchase made by NEXTLINK) of such other
    Debt at the option of the holder thereof prior to the final Stated Maturity
    of the senior or senior discount notes, other than a redemption or other
    retirement at the option of the holder of such Debt (including pursuant to
    an offer to purchase made by NEXTLINK) which is conditioned upon a change of
    control of NEXTLINK pursuant to provisions substantially similar to those
    described under "Covenants--Change of Control" (and which shall provide that
    such Debt will not be repurchased pursuant to such provisions prior to
    NEXTLINK's repurchase of the senior or senior discount notes required to be
    repurchased by NEXTLINK pursuant to the provisions described under
    "Covenants--Change of Control").
 
                                       59
<PAGE>
    "Subsidiary" of any Person means:
 
        (1)  a corporation more than 50% of the combined voting power of the
    outstanding Voting Stock of which is owned, directly or indirectly, by such
    Person or by one or more other Subsidiaries of such Person or by such Person
    and one or more Subsidiaries thereof or
 
        (2)  any other Person (other than a corporation) in which such Person,
    or one or more other Subsidiaries of such Person or such Person and one or
    more other Subsidiaries thereof, directly or indirectly, has at least a
    majority ownership and power to direct the policies, management and affairs
    thereof.
 
    "Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.
 
    "Telecommunications Business" means the business of:
 
        (1)  transmitting, or providing services relating to the transmission
    of, voice, video or data through owned or leased transmission facilities,
 
        (2)  creating, developing or marketing communications related network
    equipment, software and other devices for use in a Telecommunication
    Business or
 
        (3)  evaluating, participating or pursuing any other activity or
    opportunity that is primarily related to those identified in (1) or (2)
    above and shall, in any event, include all businesses in which NEXTLINK or
    any of its Subsidiaries are engaged on the Issue Date; provided that the
    determination of what constitutes a Telecommunications Business shall be
    made in good faith by the Board of Directors of NEXTLINK, which
    determination shall be conclusive.
 
    "Unrestricted Subsidiary" means:
 
        (1)  any Subsidiary of NEXTLINK designated as such by the Board of
    Directors of NEXTLINK as set forth below where:
 
           (a)  neither NEXTLINK nor any of its other Subsidiaries (other than
       another Unrestricted Subsidiary)
 
           (x) provides credit support for, or Guarantee of, any Debt of such
               Subsidiary or any Subsidiary of such Subsidiary (including any
               undertaking, agreement or instrument evidencing such Debt) or
 
           (y) is directly or indirectly liable for any Debt of such Subsidiary
               or any Subsidiary of such Subsidiary, and
 
           (b)  no default with respect to any Debt of such Subsidiary or any
       Subsidiary of such Subsidiary (including any right which the holders
       thereof may have to take enforcement action against such Subsidiary)
       would permit (upon notice, lapse of time or both) any holder of any other
       Debt of NEXTLINK and its Restricted Subsidiaries to declare a default on
       such other Debt or cause the payment thereof to be accelerated or payable
       prior to its final scheduled maturity and
 
        (2)  any Subsidiary of an Unrestricted Subsidiary.
 
    The Board of Directors of NEXTLINK may designate any Subsidiary to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, any other Subsidiary of NEXTLINK
which is not a Subsidiary of the Subsidiary to be so designated or otherwise an
Unrestricted Subsidiary, provided that either:
 
           (a)  the Subsidiary to be so designated has total assets of $1,000 or
       less or
 
                                       60
<PAGE>
           (b)  immediately after giving effect to such designation, NEXTLINK
       could Incur at least $1.00 of additional Debt pursuant to the first
       paragraph under "Covenants--Limitation on Consolidated Indebtedness"
       above and provided, further, that NEXTLINK could make a Restricted
       Payment in an amount equal to the greater of the fair market value and
       the book value of such Subsidiary pursuant to the covenant described
       under "Covenants--Limitation on Restricted Payments" and such amount is
       thereafter treated as a Restricted Payment for the purpose of calculating
       the aggregate amount available for Restricted Payments thereunder. The
       Board of Directors of NEXTLINK may designate any Unrestricted Subsidiary
       to be a Restricted Subsidiary, PROVIDED that, if such Unrestricted
       Subsidiary has Debt outstanding at such time, either:
 
           (x) immediately after giving effect to such designation, NEXTLINK
               could Incur at least $1.00 of additional Debt pursuant to the
               first paragraph under "Covenants-- Limitation on Consolidated
               Indebtedness" above or
 
           (y) NEXTLINK or such Restricted Subsidiary could Incur such Debt
               hereunder (other than as Acquired Debt).
 
    "Vendor Financing Facility" means any agreements between NEXTLINK or a
Restricted Subsidiary and one or more vendors or lessors of equipment or other
capital assets to NEXTLINK or any of its Restricted Subsidiaries (or any
affiliate of any such vendor or lessor) providing financing for the acquisition
by NEXTLINK or any such Restricted Subsidiary of equipment or other capital
assets from any such vendor or lessor.
 
    "Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
 
    "Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person 99% or more of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
 
EVENTS OF DEFAULT
 
    The following are Events of Default under each of the indentures:
 
        (1)  failure to pay principal of (or premium, if any, on) any note
    issued under that indenture when due;
 
        (2)  failure to pay any interest on any note issued under that indenture
    when due, continued for 30 days;
 
        (3)  default in the payment of principal and interest on notes issued
    under that indenture required to be purchased pursuant to an Offer to
    Purchase as described under "Covenants-- Change of Control" when due and
    payable;
 
        (4)  failure to perform or comply with the provisions described under
    "Mergers, Consolidations and Certain Sales of Assets;"
 
        (5)  failure to perform any other covenant or agreement of NEXTLINK
    under the applicable indenture or note continued for 60 days after written
    notice to NEXTLINK by the trustee or Holders of at least 25% in aggregate
    principal amount of outstanding series of notes in question;
 
                                       61
<PAGE>
        (6)  default under the terms of any instrument evidencing or securing
    Debt of NEXTLINK or any Significant Subsidiary having an outstanding
    principal amount of $10 million individually or in the aggregate which
    default results in the acceleration of the payment of such Debt or
    constitutes the failure to pay such Debt when due;
 
        (7)  the rendering of a final judgment or judgments (not subject to
    appeal) for the payment of money against NEXTLINK or any Significant
    Subsidiary in an aggregate amount in excess of $10 million which remains
    undischarged or unstayed for a period of 45 days after the date on which the
    right to appeal all such judgments has expired; and
 
        (8)  certain events of bankruptcy, insolvency or reorganization
    affecting NEXTLINK or any Significant Subsidiary. (Section 501)
 
    Subject to the provisions of the indentures relating to the duties of the
trustee in case an Event of Default shall occur and be continuing, the trustee
will be under no obligation to exercise any of its rights or powers under the
indentures at the request or direction of any of the holders, unless such
holders shall have offered to the trustee reasonable indemnity. (Section 603)
Subject to such provisions for the indemnification of the trustee, the holders
of a majority in aggregate principal amount of the outstanding senior or senior
discount notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee. The trustee may refuse, however, to
follow any direction that the trustee, in its sole discretion, determines may be
unduly prejudicial to the rights of another holder or that may subject the
trustee to any liability or expense if the trustee determines, in its sole
discretion, that it lacks indemnification against such loss or expense. (Section
512)
 
    If an Event of Default (other than an Event of Default described in Clause
(8) above with respect to NEXTLINK) shall occur and be continuing, either the
trustee or the holders of at least 25% in aggregate principal amount at maturity
of the outstanding series of notes in question may accelerate the maturity of
all senior or senior discount notes; provided, however, that after such
acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount at maturity of such notes
outstanding may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the nonpayment of accelerated
principal, have been cured or waived as provided in each of the indentures. If
an Event of Default specified in clause (8) above occurs with respect to
NEXTLINK, the outstanding notes of each series will IPSO FACTO become
immediately due and payable without any declaration or other act on the part of
the trustee or any holder. (Section 502) For information as to waiver of
defaults, see "Modification and Waiver".
 
    However, upon an acceleration of the senior discount notes or an Event of
Default specified in clause (8) above, in each case prior to June    , 2004, the
holders of the senior discount notes will be entitled to receive only a default
amount equal to the Accreted Value of the senior discount notes (plus any
accrued and unpaid interest and premium, if any, not otherwise included in the
Accreted Value to such date), which until June    , 2004 will be less than the
face amount of the senior discount notes.
 
    No holder of any senior or senior discount note will have any right to
institute any proceeding with respect to the indentures or for any remedy
thereunder, unless such holder shall have previously given to the trustee
written notice of a continuing Event of Default (as defined) and unless also the
holders of at least 25% in aggregate principal amount of the notes outstanding
thereunder shall have made written request, and offered reasonable indemnity, to
the trustee to institute such proceeding as trustee, and the trustee shall not
have received from the holders of a majority in aggregate principal amount of
the notes outstanding thereunder a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days. (Section 507)
However, such limitations do not apply to a suit instituted by a holder of a
senior or senior discount note for enforcement of payment of the principal of
and premium, if any, or interest on the senior or senior discount note on or
after the respective due dates expressed in the senior or senior discount note.
(Section 508)
 
                                       62
<PAGE>
    Each indenture provides that if a Default with respect to notes outstanding
thereunder occurs and is continuing, generally the trustee must, within 90 days
after the occurrence of such Default, give to the holders notice of such
Default. The trustee may withhold from holders of the senior or senior discount
notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal of, premium, if any or
interest) if it determines that withholding notice is in their interest;
provided, however, that in the case of any default of a character specified in
clause (e) above, no such notice to holders shall be given until at least 30
days after the occurrence thereof. (Section 602)
 
    NEXTLINK will be required to furnish to the trustee quarterly a statement as
to the performance by NEXTLINK of certain of its obligations under the
indentures and NEXTLINK is required upon becoming aware of any Default or Event
of Default to deliver to the trustee a statement specifying such Default or
Event of Default. (Section 1018)
 
SATISFACTION AND DISCHARGE OF THE INDENTURES
 
    Each of the indentures will cease to be of further effect as to all
outstanding senior or senior discount notes except as to:
 
        (1)  NEXTLINK's right of optional redemption;
 
        (2)  substitution of apparently mutilated, defaced, destroyed, lost or
    stolen senior or senior discount notes;
 
        (3)  rights of holders to receive payment of principal of and premium,
    if any, and interest on the senior and senior discount notes;
 
        (4)  rights, obligations and immunities of the trustee under the
    indentures; and
 
        (5)  rights of the holders of the senior and senior discount notes as
    beneficiaries of the indentures under which such notes are outstanding with
    respect to any property deposited with the trustee payable to all or any of
    them,
 
    if:
 
           (a)  NEXTLINK shall have paid or caused to be paid the principal of
       and premium, if any, and interest on the senior or senior discount notes
       as and when the same will have become due and payable or
 
           (b)  all outstanding senior or senior discount notes (except lost,
       stolen or destroyed notes which have been replaced or paid) have been
       delivered to the trustee for cancellation. (Section 401)
 
DEFEASANCE
 
    The indentures provide that, at the option of NEXTLINK:
 
        (1)  if applicable, NEXTLINK will be discharged from any and all
    obligations in respect of the notes outstanding thereunder or
 
        (2)  if applicable, NEXTLINK may omit to comply with certain restrictive
    covenants, and that such omission shall not be deemed to be an Event of
    Default under the indentures and the notes outstanding thereunder, in either
    case (1) or (2) upon irrevocable deposit with the trustee, in trust, of
    money and/or U.S. government obligations which will provide money in an
    amount sufficient in the opinion of a nationally recognized firm of
    independent certified public accountants to pay the principal of and
    premium, if any, and each installment of interest, if any, on the
    outstanding senior or senior discount notes on the Stated Maturity. With
    respect to clause (2), the obligations under the indentures other than with
    respect to such covenants and the Events of Default other than the Events of
    Default relating to such covenants above shall remain in full force and
    effect. Such trust may only be established if, among other things:
 
                                       63
<PAGE>
           (a)  with respect to clause (1), NEXTLINK has received from, or there
       has been published by, the Internal Revenue Service a ruling or there has
       been a change in law after the Issue Date, which in the opinion of
       counsel provides that holders of the senior or senior discount notes will
       not recognize gain or loss for federal income tax purposes as a result of
       such deposit, defeasance and discharge and will be subject to federal
       income tax on the same amounts, in the same manner and at the same times
       as would have been the case if such deposit, defeasance and discharge had
       not occurred; or, with respect to clause (2), NEXTLINK has delivered to
       the trustee an opinion of counsel to the effect that the holders of the
       notes will not recognize gain or loss for federal income tax purposes as
       a result of such deposit and defeasance and will be subject to federal
       income tax on the same amounts, in the same manner and at the same times
       as would have been the case if such deposit and defeasance had not
       occurred;
 
           (b)  no Default or Event of Default shall have occurred or be
       continuing;
 
           (c)  NEXTLINK has delivered to the trustee an opinion of counsel to
       the effect that such deposit shall not cause the trustee or the trust so
       created to be subject to the Investment Company Act of 1940, as amended;
       and
 
           (d)  certain other customary conditions precedent are satisfied.
       (Section1201)
 
MODIFICATION AND WAIVER
 
    Modifications and amendments of either of the indentures may be made by
NEXTLINK and the trustee with the consent of the holders of a majority in
aggregate principal amount of the notes outstanding thereunder; PROVIDED,
HOWEVER, that no such modification or amendment may, without the consent of the
holder of each outstanding note affected thereby:
 
        (1)  change the due date of the principal of, or any installment of
    interest on, any senior or senior discount note;
 
        (2)  reduce the principal amount of, or the premium or interest on, any
    senior or senior discount note;
 
        (3)  change the place or currency of payment of principal of, or premium
    or interest on, any senior or senior discount note;
 
        (4)  impair the right to institute suit for the enforcement of any
    payment on or with respect to any senior or senior discount note;
 
        (5)  reduce the above stated percentage of outstanding senior and senior
    discount notes necessary to modify or amend the indentures;
 
        (6)  reduce the percentage of aggregate principal amount of outstanding
    senior or senior discount notes necessary for waiver of compliance with
    certain provisions of the indenture or for waiver of certain defaults;
 
        (7)  modify any provisions of either of the indentures relating to the
    modification and amendment of the indentures or the waiver of past defaults
    or covenants, except as otherwise specified; or
 
        (8)  following the mailing of any Offer to Purchase and until the
    Expiration Date of that Offer to Purchase, modify any Offer to Purchase for
    the senior or senior discount notes required under the "Limitation on Asset
    Dispositions" and the "Change of Control" covenants contained in the
    indentures in a manner materially adverse to the holders thereof. (Section
    902)
 
    Notwithstanding the foregoing, without the consent of any holder of senior
or senior discount notes, NEXTLINK and the trustee may amend or supplement the
indenture under which such notes are outstanding or the senior or senior
discount notes:
 
                                       64
<PAGE>
    - to cure any ambiguity, defect or inconsistency,
 
    - to provide for uncertificated notes in addition to or in place of
      certificated notes,
 
    - to provide for the assumption of NEXTLINK's obligations to holders of
      senior or senior discount notes in the case of a merger or consolidation,
 
    - to make any change that would provide any additional rights or benefits to
      holders of senior or senior discount notes or that does not adversely
      affect the legal rights under the indentures of any such holder, or
 
    - to comply with requirements of the SEC in order to maintain the
      qualification of the indentures under the Trust Indenture Act. (Section
      901)
 
    The holders of a majority in aggregate principal amount of the outstanding
senior or senior discount notes, on behalf of all holders of senior or senior
discount notes, may waive compliance by NEXTLINK with certain restrictive
provisions of the indentures. (Section 1019) Subject to certain rights of the
trustee, as provided in the indentures, the holders of a majority in aggregate
principal amount of the outstanding senior or senior discount notes, on behalf
of all holders of senior or senior discount notes, may waive any past default
under the indentures, except a default in the payment of principal, premium or
interest or a default arising from failure to purchase any note tendered
pursuant to an Offer to Purchase. (Section 513)
 
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
 
    No director, officer, employee, incorporator or stockholder of NEXTLINK, as
such, shall have any liability for any obligations of NEXTLINK under the senior
or senior discount notes or the indentures or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each holder of senior
or senior discount notes by accepting a senior or senior discount note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the senior or senior discount notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such waiver is against public policy.
 
GOVERNING LAW
 
    The indentures and the senior and senior discount notes will be governed by
the laws of the State of New York.
 
THE TRUSTEE
 
    The indentures provide that, except during the continuance of an Event of
Default, the trustee will perform only such duties as are specifically set forth
in the indentures. During the existence of an Event of Default, the trustee will
exercise such rights and powers vested in it under the indentures and use the
same degree of care and skill in its exercise as a prudent person would exercise
under the circumstances in the conduct of such person's own affairs.
(Section601)
 
    The indentures and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the trustee, should it
become a creditor of NEXTLINK, to obtain payment of claims in certain cases or
to realize on certain property received by it in respect of any such claim as
security or otherwise. The trustee is permitted to engage in other transactions
with NEXTLINK or any Affiliate, provided, however, that if it acquires any
conflicting interest (as defined in the indentures or in the Trust Indenture
Act), it must eliminate such conflict or resign. (SectionSection 608, 613)
 
                                       65
<PAGE>
             MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
 
    PROSPECTIVE HOLDERS OF NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS WITH
REGARD TO THE APPLICATION OF THE TAX CONSIDERATIONS DISCUSSED BELOW TO THEIR
PARTICULAR SITUATIONS AS WELL AS THE APPLICATION OF ANY STATE, LOCAL, FOREIGN OR
OTHER TAX LAWS, INCLUDING GIFT AND ESTATE TAX LAWS.
 
      This section discusses the rules applicable to U.S. note holders only. A
U.S. holder is any of the following:
 
          - citizens and residents of the United States for U.S. federal income
    tax purposes;
 
          - corporations, partnerships, and other entities created or organized
    in or under the laws of the United States or any political subdivision
    thereof;
 
          - estates, if the income of the estate is subject to U.S. federal
    income taxation regardless of its sources and trusts, if a U.S. court can
    exercise primary supervision over the administration of the trust and one or
    more U.S. persons have the authority to control all substantial decisions of
    the trust; and
 
          - other persons whose worldwide income or gain is otherwise subject to
    U.S. federal income taxation on a net income basis.
 
    Non-U.S. holders are subject to substantially different rules, not described
here.
 
    INTEREST ON SENIOR NOTES
 
    Cash basis taxpayers, including most individuals, will recognize ordinary
interest income when they receive interest payments on the senior notes. Accrual
basis taxpayers, including corporations, will recognize ordinary interest income
as interest on the senior notes accrues.
 
    ORIGINAL ISSUE DISCOUNT ON SENIOR DISCOUNT NOTES
 
    The senior discount notes will be issued with original issue discount
("OID"). In general, holding senior discount notes will result in taxable
ordinary interest income in an amount equal to the accretion on the senior
discount notes during their accretion period, and on the interest that accrues
on their principal amount thereafter. Thus, even cash basis taxpayers will have
to recognize interest income on the senior discount notes as it accrues
throughout the period they hold them, even when interest is payable in cash.
 
    OID is defined as the excess of:
 
        (1) the stated redemption price at maturity of a senior discount note
    over
 
        (2) its issue price.
 
    The "stated redemption price at maturity" of a senior discount note is the
sum of all payments (including cash interest) provided by the senior discount
note. The "issue price" of a senior discount note is the first price at which a
substantial amount of the senior discount notes are sold to the public for cash
(excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity as underwriters, placement agents or wholesalers).
 
    A note holder is required to include OID in income as ordinary interest as
it accrues under the constant yield method in advance of receipt of the cash
payments attributable to such income, regardless of the note holder's regular
method of accounting. Because OID is defined to include cash interest payments,
they need not be reported separately as taxable income.
 
    In general, the amount of OID included in income by the holder of a senior
discount note is the sum of the daily portions of OID for each day during the
taxable year or portion of the taxable year on which such holder held such
senior discount note. The "daily portion" is determined by allocating the
 
                                       66
<PAGE>
OID for the actual period ratably to each day in that accrual period. The
"accrual period" for a senior discount note may be of any length and may vary in
length over the term of a senior discount note, provided that each accrual
period is no longer than one year and each scheduled payment of principal or
interest occurs either on the first or final day of an accrual period.
 
    The amount of OID for an accrual period is generally equal to the product of
the senior discount note's adjusted issue price at the beginning of such accrual
period and its yield to maturity. The "adjusted issue price" of a senior
discount note at the beginning of any accrual period is the sum of the issue
price of the senior discount note plus the amount of OID allocable to all prior
accrual periods minus the amount of any prior payments on the senior discount
note. Under the constant yield method of determining OID, a note holder
generally will have to include increasingly greater amounts of OID in income in
successive accrual periods.
 
    SALE, EXCHANGE AND RETIREMENT OF NOTES
 
    A note holder will recognize gain or loss upon the sale, retirement or other
taxable disposition of a note. Such gain or loss will generally equal the
difference between:
 
          - the amount of cash and the fair market value of property received
    for the note (other than amounts representing accrued but unpaid stated
    interest) and
 
          - the holder's adjusted tax basis in the note.
 
    A note holder's adjusted tax basis in notes will generally equal the
holder's purchase price, increased by any accrued OID, and reduced by any cash
payments on the notes. Gain or loss generally will be capital gain or loss and
will be long-term capital gain or loss, if the holder has held such notes for
more than one year. Long-term capital gain of a non-corporate note holder is
generally subject to a maximum tax rate of 20%. There are limits on the
deductibility of capital losses. Any amounts paid with respect to accrued but
unpaid stated interest generally will be taxable as ordinary interest income.
Gain or loss realized on the sale, retirement or other taxable disposition of a
note derived by a note holder generally will be treated as U.S. source income or
loss for foreign tax credit purposes.
 
    BACKUP WITHHOLDING AND INFORMATION REPORTING
 
    In general, information reporting requirements will apply to certain
payments of principal, premium, if any, and interest and to the proceeds of sale
of a note made to holders other than exempt recipients, such as corporations.
Backup withholding and information reporting generally will not apply to
payments of principal, premium, if any, and interest on notes made outside the
United States (other than payments made to an address in the United States or by
transfer to an account maintained by the holder with a bank in the United
States) by us or any paying agent (acting in its capacity as such) to a holder.
A 31% backup withholding tax may apply to such payments if a U.S. note holder
fails to provide a taxpayer identification number or certification of foreign or
other exempt status or is notified by the IRS that it has failed to report its
full dividend and interest income.
 
    THIS TAX DISCUSSION IS NOT COMPLETE
 
    The above is a general discussion of United States federal income tax
consequences of the purchase, ownership and sale of the notes by note holders.
It only applies to note holders who purchase their notes at the issue price, and
it does not purport to be a complete analysis of all potential tax effects. The
discussion is based on the tax law as it exists today although it could change
at any time, and any change could be applied retroactively in a manner that
could adversely affect a holder of the notes. This discussion does not address
the special rules applicable to note holders such as insurance companies and
other financial institutions, dealers in securities, tax-exempt organizations
and persons holding the notes as part of a "straddle," "hedge" or "conversion
transaction," and deals only with notes held as "capital assets" within the
meaning of Section 1221 of the Code.
 
                                       67
<PAGE>
                   DESCRIPTION OF OTHER MATERIAL INDEBTEDNESS
 
DESCRIPTION OF THE 12 1/2% NOTES
 
    GENERAL.  NEXTLINK and NEXTLINK Capital, Inc., (a wholly owned subsidiary of
NEXTLINK) together issued $350 million of 12 1/2% Senior Notes Due April 15,
2006 pursuant to an indenture among NEXTLINK, NEXTLINK Capital and United States
Trust Company of New York, as trustee. On September 6, 1996, NEXTLINK
consummated an offer to exchange these notes for $350 million of 12 1/2% Senior
Notes Due April 15, 2006 that had been registered under the Securities Act.
 
    PRINCIPAL, MATURITY AND INTEREST.  The 12 1/2% Notes are limited in
aggregate principal amount to $350 million and will mature on April 15, 2006.
Interest on the 12 1/2% Notes accrues at 12 1/2% per annum and is payable
semiannually in arrears on April 15 and October 15 of each year. NEXTLINK used
$117.7 million of the net proceeds of the offering of the 12 1/2% notes to
purchase a portfolio of U.S. government securities, to pledge as security for
payment of interest on the 12 1/2% Notes through April 15, 1999 and, under
certain circumstances, as security for repayment of the principal of the 12 1/2%
Notes. Proceeds from the pledged securities may be used by NEXTLINK to make
interest payments on the 12 1/2% Notes through April 15, 1999. The pledged
securities are being held by the trustee pending disbursement.
 
    RANKING.  The 12 1/2% Notes are unsecured senior obligations of the issuers,
will rank equally in right of payment with all existing and future senior
obligations of the issuers and will rank senior in right of payment to all
future subordinated obligations of the issuers.
 
    REDEMPTION.  The 12 1/2% Notes are redeemable at on or after April 15, 2001,
at NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) plus accrued interest, if
redeemed during the twelve-month period beginning on April 15 of the years
indicated below:
 
<TABLE>
<CAPTION>
YEAR                                                                                PERCENTAGE
- ----------------------------------------------------------------------------------  -----------
<S>                                                                                 <C>
2001..............................................................................     106.250%
2002..............................................................................     104.167%
2003..............................................................................     102.083%
2004 and thereafter...............................................................     100.000%
</TABLE>
 
    Except in connection with a Change of Control or an Asset Disposition (as
defined in the indenture relating to the 12 1/2% Notes) of NEXTLINK, the issuers
are not required to make mandatory redemption or sinking fund payments with
respect to the 12 1/2% Notes.
 
    COVENANTS.  The indenture relating to the 12 1/2% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, pay dividends
or make certain other restricted payments, incur certain liens to secure debt
which is subordinated to or ranks equally with the 12 1/2% Notes, engage in any
sale and leaseback transaction, sell assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of NEXTLINK, enter into
certain transactions with affiliates, or incur indebtedness that is subordinate
in right of payment to any senior indebtedness and senior in right of payment to
the 12 1/2% Notes. The indenture relating to the 12 1/2% Notes permits, under
certain circumstances, NEXTLINK's subsidiaries to be deemed unrestricted
subsidiaries and thus not subject to the restrictions of the indenture.
 
    Events of Default. The indenture relating to the 12 1/2% Notes contains
standard events of default, including:
 
    - defaults in the payment of principal, premium or interest;
 
    - defaults in the compliance with covenants contained in the indenture;
 
                                       68
<PAGE>
    - cross defaults on more than $10 million of other indebtedness;
 
    - failure to pay more than $10 million of judgments; and
 
    - certain events of its subsidiaries.
 
DESCRIPTION OF THE 9 5/8% NOTES
 
    GENERAL.  NEXTLINK issued $400 million of 9 5/8% Senior Notes Due 2007
pursuant to an indenture between NEXTLINK and United States Trust Company of New
York, as trustee. The 9 5/8% Notes have been registered under the Securities
Act.
 
    PRINCIPAL, MATURITY AND INTEREST.  The 9 5/8% Notes are limited in aggregate
principal amount to $400 million and will mature on October 1, 2007. Interest on
the 9 5/8% Notes accrues at 9 5/8% per annum and is payable semiannually in
arrears on April 1 and October 1 of each year.
 
    RANKING.  The 9 5/8% Notes are unsecured senior obligations of NEXTLINK,
will rank equally in right of payment with all existing and future senior
obligations of NEXTLINK and will rank senior in right of payment to all future
subordinated obligations of NEXTLINK.
 
    REDEMPTION.  The 9 5/8% Notes are redeemable on or after October 1, 2002, at
NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) plus accrued interest, if
redeemed during the twelve-month period beginning on October 1 of the years
indicated below:
 
<TABLE>
<CAPTION>
YEAR                                                                                PERCENTAGE
- ----------------------------------------------------------------------------------  -----------
<S>                                                                                 <C>
2002..............................................................................     104.813%
2003..............................................................................     103.208%
2004..............................................................................     101.604%
2005 and thereafter...............................................................     100.000%
</TABLE>
 
    In addition, at any time on or before October 1, 2000, NEXTLINK may redeem
up to 33 1/3% of the original aggregate principal amount of the 9 5/8% Notes
with the net proceeds of a sale of common equity at a redemption price equal to
109.625% of the principal amount, plus accrued interest, provided that at least
$266.7 million in aggregate principal amount of 9 5/8% Notes remains outstanding
after such redemption. Except in connection with a Change of Control or an Asset
Disposition (as defined in the indenture relating to the 9 5/8% Notes) of
NEXTLINK, NEXTLINK is not required to make mandatory redemption or sinking fund
payments with respect to the 9 5/8% Notes.
 
    COVENANTS.  The indenture relating to the 9 5/8% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, pay dividends
or make certain other restricted payments, incur certain liens to secure debt
which is subordinated to or ranks equally with the 9 5/8% Notes, engage in any
sale and leaseback transaction, sell assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of NEXTLINK, enter into
certain transactions with affiliates, or incur indebtedness that is subordinate
in right of payment to any senior indebtedness and senior in right of payment to
the 9 5/8% Notes. The indenture relating to the 9 5/8% Notes permits, under
certain circumstances, NEXTLINK's subsidiaries to be deemed unrestricted
subsidiaries and thus not subject to the restrictions of the indenture.
 
    EVENTS OF DEFAULT.  The indenture relating to the 9 5/8% Notes contains
standard events of default, including:
 
    - defaults in the payment of principal, premium or interest;
 
    - defaults in the compliance with covenants contained in the indenture;
 
                                       69
<PAGE>
    - cross defaults on more than $10 million of other indebtedness;
 
    - failure to pay more than $10 million of judgments; and
 
    - certain events of its subsidiaries.
 
DESCRIPTION OF THE 9% NOTES
 
    GENERAL.  NEXTLINK issued $335 million of 9% Senior Notes Due 2008 pursuant
to an indenture between NEXTLINK and United States Trust Company of New York, as
trustee. On July 15, 1998, NEXTLINK consummated an offer to exchange such notes
for $335 million of 9% Senior Notes Due 2008 that had been registered under the
Securities Act.
 
    PRINCIPAL, MATURITY AND INTEREST.  The 9% Notes are limited in aggregate
principal amount to $335 million and will mature on March 15, 2008. Interest on
the 9% Notes accrues at 9% per annum and is payable semiannually in arrears on
March 15 and September 15 of each year.
 
    RANKING.  The 9% Notes are unsecured senior obligations of NEXTLINK, will
rank equally in right of payment with all existing and future senior obligations
of NEXTLINK and will rank senior in right of payment to all future subordinated
obligations of NEXTLINK.
 
    REDEMPTION.  The 9% Notes are redeemable on or after March 15, 2003, at
NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) described below plus accrued
interest, if redeemed during the twelve-month period beginning on March 15 of
the years indicated below:
 
<TABLE>
<CAPTION>
YEAR                                                                                PERCENTAGE
- ----------------------------------------------------------------------------------  -----------
<S>                                                                                 <C>
2003..............................................................................     104.500%
2004..............................................................................     103.000%
2005..............................................................................     101.500%
2006 and thereafter...............................................................     100.000%
</TABLE>
 
    In addition, at any time on or before March 15, 2001, NEXTLINK may redeem up
to 33 1/3% of the original aggregate principal amount of the 9% Notes with the
net proceeds of a sale of common equity at a redemption price equal to 9% of the
principal amount thereof, plus accrued interest, provided that at least 66 2/3%
of the original aggregate principal amount of 109.00% Notes remains outstanding
after such redemption. Except in connection with a Change of Control or an Asset
Disposition (as defined in the indenture relating to the 9% Notes) of NEXTLINK,
NEXTLINK is not required to make mandatory redemption or sinking fund payments
with respect to the 9% Notes.
 
    COVENANTS.  The indenture relating to the 9% Notes restricts, among other
things, NEXTLINK's ability to incur additional indebtedness, pay dividends or
make certain other restricted payments, incur certain liens to secure debt which
is subordinated to or ranks equally with the 9% Notes, engage in any sale and
leaseback transaction, sell assign, transfer, lease, convey or otherwise dispose
of substantially all of the assets of NEXTLINK, enter into certain transactions
with affiliates, or incur indebtedness that is subordinate in right of payment
to any senior indebtedness and senior in right of payment to the 9% Notes. The
indenture relating to the 9% Notes permits, under certain circumstances,
NEXTLINK's subsidiaries to be deemed unrestricted subsidiaries and thus not
subject to the restrictions of the indenture.
 
    EVENTS OF DEFAULT.  The indenture relating to the 9% Notes contains standard
events of default, including:
 
    - defaults in the payment of principal, premium or interest;
 
                                       70
<PAGE>
    - defaults in the compliance with covenants contained in the indenture;
 
    - cross defaults on more than $10 million of other indebtedness;
 
    - failure to pay more than $10 million of judgments; and
 
    - certain events of its subsidiaries.
 
DESCRIPTION OF THE 9.45% NOTES
 
    GENERAL.  NEXTLINK issued $636,974,000 aggregate principal amount at stated
maturity of 9.45% Senior Discount Notes Due 2008 under an indenture between
NEXTLINK and United States Trust Company of New York, as trustee. On August 24,
1998, NEXTLINK consummated an offer to exchange such notes for $636,974,000 in
aggregate principal amount at stated maturity of 9.45% Senior Discount Notes due
2008 that have been registered under the Securities Act.
 
    PRINCIPAL, MATURITY AND INTEREST.  The 9.45% Notes are limited to
$636,974,000 aggregate principal amount at stated maturity and will mature on
April 15, 2008. The 9.45% Notes were issued at a discount from their principal
amount to generate aggregate gross proceeds of approximately $400.0 million. The
9.45% Notes accrete at a rate of 9.45% compounded semi-annually, to an aggregate
principal amount of $636,974,000 by April 15, 2003. No interest will accrue on
the 9.45% Notes prior to April 15, 2003. The 9.45% Notes bear interest at 9.45%
per annum payable semi-annually on April 15 and October 15 of each year,
commencing October 15, 2003, accruing from April 15, 2003, or from the most
recent interest payment date to which interest has been paid or provided.
 
    RANKING.  The 9.45% Notes are unsecured senior obligations of NEXTLINK, rank
equally in right of payment with all existing and future senior obligations of
NEXTLINK and will rank senior in right of payment to all future subordinated
obligations of NEXTLINK.
 
    REDEMPTION.  The 9.45% Notes are redeemable on or after April 15, 2003, at
NEXTLINK's option, in whole or in part, and prior to maturity in amounts of
$1,000 principal amount at maturity or an integral multiple of $1,000 at the
following redemption prices (expressed as percentages of the principal amount)
plus accrued interest, if redeemed during the 12 month period beginning April 15
of the years indicated:
 
<TABLE>
<CAPTION>
YEAR                                                                                PERCENTAGE
- ----------------------------------------------------------------------------------  -----------
<S>                                                                                 <C>
2003..............................................................................     104.725%
2004..............................................................................     103.150%
2005..............................................................................     101.575%
2006 and thereafter...............................................................     100.000%
</TABLE>
 
    In addition, at any time on or before April 15, 2001, NEXTLINK may redeem up
to 33 1/3% of the original aggregate principal amount of the 9.45% Notes with
the net proceeds of a sale of common equity, at a redemption price 109.45% of
the principal amount thereof, plus accrued interest, provided that at least
66 2/3% of the original aggregate principal amount of the 9.45% Notes remains
outstanding after such redemption. Except in connection with a Change of Control
or an Asset Disposition (as defined in the indenture relating to the 9.45%
Notes) of NEXTLINK, NEXTLINK is not required to make mandatory redemption or
sinking fund payments with respect to the 9.45% Notes.
 
    COVENANTS.  The indenture relating to the 9.45% Notes restricts, among other
things, NEXTLINK's ability to incur additional indebtedness, pay dividends or
make certain other restricted payments, incur certain liens to secure debt which
is subordinated to or ranks equally with the 9.45% Notes, engage in any sale and
leaseback transaction, sell, assign, transfer, lease, convey or otherwise
dispose of substantially all of the assets of NEXTLINK, enter into certain
transactions with affiliates, or
 
                                       71
<PAGE>
incur indebtedness that is subordinate in right of payment to any senior
indebtedness and senior in right of payment to the 9.45% Notes. The indenture
relating to the 9.45% Notes permits, under certain circumstances, NEXTLINK's
subsidiaries to be deemed unrestricted subsidiaries and thus not subject to the
restrictions of such indenture.
 
    EVENTS OF DEFAULT.  The indenture relating to the 9.45% Notes contains
standard events of default, including:
 
    - defaults in the payment of principal, premium or interest;
 
    - defaults in the compliance with covenants contained in the indenture;
 
    - cross defaults on more than $10 million of other indebtedness;
 
    - failure to pay more than $10 million of judgments; and
 
    - certain events of its subsidiaries.
 
DESCRIPTION OF THE 10 3/4% NOTES
 
    GENERAL.  NEXTLINK issued $500 million principal amount of 10 3/4% Senior
Notes Due 2008 under an indenture between NEXTLINK and United States Trust
Company of New York, as trustee. The 10 3/4% Notes due 2008 that have not been
registered under the Securities Act. We have agreed to use our best efforts to
exchange the 10 3/4% Notes for a new issue of 10 3/4 Notes due 2008 that have
been registered under the Securities Act. This exchange is currently in
progress.
 
    PRINCIPAL, MATURITY AND INTEREST.  The 10 3/4% Notes are limited in
aggregate principal amount to $500 million and will mature on November 15, 2008.
Interest on the 10 3/4% Notes accrues at 10 3/4% per annum and is payable
semiannually in arrears on May 15 and November 15 of each year.
 
    RANKING.  The 10 3/4% Notes are unsecured senior obligations of NEXTLINK,
will rank equally in right of payment with all existing and future senior
obligations of NEXTLINK and will rank senior in right of payment to all future
subordinated obligations of NEXTLINK.
 
    REDEMPTION.  The 10 3/4% Notes are redeemable on or after November 15, 2003,
at NEXTLINK's option, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount) described below plus accrued
interest, if redeemed during the twelve-month period beginning on November 15 of
the years indicated below:
 
<TABLE>
<CAPTION>
YEAR                                                                                PERCENTAGE
- ----------------------------------------------------------------------------------  -----------
<S>                                                                                 <C>
2003..............................................................................     105.375%
2004..............................................................................     103.583%
2005..............................................................................     101.792%
2006 and thereafter...............................................................     100.000%
</TABLE>
 
    In addition, at any time on or before November 15, 2001, NEXTLINK may redeem
up to 33 1/3% of the original aggregate principal amount of the 10 3/4% Notes
with the net proceeds of a sale of common equity at a redemption price equal to
112.75% of the principal amount thereof, plus accrued interest, provided that at
least 66 2/3% of the original aggregate principal amount of 10 3/4% Notes
remains outstanding after such redemption. Except in connection with a Change of
Control or an Asset Disposition (as defined in the indenture relating to the
10 3/4% Notes) of NEXTLINK, NEXTLINK is not required to make mandatory
redemption or sinking fund payments with respect to the 10 3/4% Notes.
 
    COVENANTS.  The indenture relating to the 10 3/4% Notes restricts, among
other things, NEXTLINK's ability to incur additional indebtedness, pay dividends
or make certain other restricted
 
                                       72
<PAGE>
payments, incur certain liens to secure debt which is subordinated to or ranks
equally with the 10 3/4% Notes, engage in any sale and leaseback transaction,
sell assign, transfer, lease, convey or otherwise dispose of substantially all
of the assets of NEXTLINK, enter into certain transactions with affiliates, or
incur indebtedness that is subordinate in right of payment to any senior
indebtedness and senior in right of payment to the 10 3/4% Notes. The indenture
relating to the 10 3/4% Notes permits, under certain circumstances, NEXTLINK's
subsidiaries to be deemed unrestricted subsidiaries and thus not subject to the
restrictions of the indenture.
 
    EVENTS OF DEFAULT.  The indenture relating to the 10 3/4% Notes contains
standard events of default, including:
 
    - defaults in the payment of principal, premium or interest;
 
    - defaults in the compliance with covenants contained in the indenture;
 
    - cross defaults on more than $10 million of other indebtedness;
 
    - failure to pay more than $10 million of judgments; and
 
    - certain events of its subsidiaries.
 
                                       73
<PAGE>
                                  UNDERWRITING
 
    Subject to the terms and conditions contained in the underwriting agreement
by and among NEXTLINK and the underwriters named below, NEXTLINK has agreed to
sell to each of the underwriters, and each of the underwriters has agreed to
purchase, the aggregate principal amount of notes noted opposite its name below:
 
<TABLE>
<CAPTION>
                                                                                     PRINCIPAL        PRINCIPAL
                                                                                       AMOUNT         AMOUNT OF
                                                                                     OF SENIOR     SENIOR DISCOUNT
UNDERWRITERS                                                                           NOTES            NOTES
- ---------------------------------------------------------------------------------  --------------  ---------------
<S>                                                                                <C>             <C>
Salomon Smith Barney Inc.........................................................
Goldman, Sachs & Co. ............................................................
Bear, Stearns & Co. Inc..........................................................
Credit Suisse First Boston Corporation...........................................
Chase Securities Inc.............................................................
      Total......................................................................
</TABLE>
 
    Under the terms and conditions of the underwriting agreement, the
underwriters are committed to take and pay for all notes to be offered by the
underwriters, if any are taken.
 
    The underwriters propose to offer the notes at the offering prices set forth
on the cover page of this prospectus and some of the notes to certain dealers at
the public offering price less a concession not in excess of    % of the
aggregate principal amount of the notes. The underwriters may allow, and such
dealers may reallow, a concession not in excess of    % of the aggregate
principal amount to certain other dealers. After the notes are released for
sale, the offering price and other selling terms of the notes may from time to
time be varied by the underwriters.
 
    NEXTLINK has agreed to indemnify the underwriters against certain
liabilities, including certain liabilities under the Securities Act, or
contribute to payments the underwriters may be required to make in respect
thereto.
 
    The notes are new securities for which there currently is no market.
NEXTLINK does not intend to apply for listing of the notes on any securities
exchange or for inclusion of the notes in any automated quotation system. Each
underwriter has advised NEXTLINK that such underwriter presently intends to make
a market in the notes and any such market-making may be discontinued at any time
at the sole discretion of such underwriter. Accordingly, NEXTLINK can not assure
you as to the development or liquidity of any market in the notes.
 
    The underwriters and their affiliates have provided in the past and may
provide in the future investment banking, commercial lending and financial
advisory services to NEXTLINK and its affiliates. An affiliate of Chase
Securities Inc. is an investor in NEXTLINK Class A common stock and is a selling
stockholder in the concurrent equity offering.
 
    In order to facilitate this offering, certain persons participating in the
offering may engage in transactions that stabilize, maintain or otherwise affect
the price of the notes during and after the offering. Specifically, the
underwriters may over-allot or otherwise create a short position in the notes
for their own account by selling more notes than have been sold to them by
NEXTLINK. The underwriters may elect to cover any such short position by
purchasing notes in the open market. In addition, the underwriters may stabilize
or maintain the price of the notes by bidding for or purchasing notes in the
open market and may impose penalty bids, under which selling concessions allowed
to syndicate members or other broker-dealers participating in the offering are
reclaimed if notes previously distributed in the offering are repurchased in
connection with stabilization transactions or otherwise. The effect of these
transactions may be to stabilize or maintain the market price of the notes at a
level above that which might otherwise prevail in the open market. The
imposition of a penalty bid may also affect the price of the notes to the extent
that it discourages resales thereof. No representation is made as to the
magnitude or effect of any such stabilization or other transactions. Such
transactions, if commenced, may be discontinued at any time.
 
                                       74
<PAGE>
                             VALIDITY OF THE NOTES
 
    The validity of the notes will be passed upon for NEXTLINK by Willkie Farr &
Gallagher, New York, New York and for the underwriters by Sullivan & Cromwell,
New York, New York.
 
                                    EXPERTS
 
    The consolidated financial statements included in NEXTLINK's Annual Report
on Form 10-K filed on March 29, 1999, which is incorporated herein by reference,
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of that firm as experts in giving such reports.
 
                      WHERE YOU CAN FIND MORE INFORMATION
 
    We file annual, quarterly and current reports, proxy statements and other
information with the SEC. We have also filed with the SEC a registration
statement on Form S-3 to register the senior and senior discount notes offered
by this prospectus. This prospectus, which forms part of the registration
statement, does not contain all of the information included in that registration
statement. For further information about NEXTLINK and the senior and senior
discount notes being registered under this prospectus, you should refer to the
registration statement and its exhibits.
 
    We file our SEC materials electronically with the SEC, so you can also
review our filings by accessing the web site maintained by the SEC at
http://www.sec.gov. This site contains reports, proxy and information statements
and other information regarding issuers that file electronically with the SEC.
You may also read and copy any document we file with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information about the Public Reference
Room.
 
    The SEC allows us to "incorporate by reference" the information we file with
them, which means we can disclose important information to you by referring you
to those documents. The information included in the following documents is
incorporated by reference and is considered to be a part of this prospectus. The
most recent information that we file with the SEC automatically updates and
supersedes more dated information. We have previously filed the following
documents with the SEC and are incorporating them by reference into this
prospectus:
 
        1.  Our Annual Report on Form 10-K for the fiscal year ended December
    31, 1998, filed on March 29, 1999;
 
        2.  Our Current Reports on Form 8-K filed on January 19, 1999 and April
    1, 1999.
 
        3.  Item 1 ("Description of Registrant's Securities to be Registered")
    contained in our Registration Statement on Form 8-A, filed on August 4, 1997
    to register shares of our Class A common stock under the Securities and
    Exchange Act of 1934, as amended.
 
    We also incorporate by reference all documents subsequently filed by us
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities and Exchange Act
of 1934, as amended, until the offering is completed.
 
    We will provide without charge to each person, including any person having a
control relationship with that person, to whom a prospectus is delivered, a copy
of any or all of the information that has been incorporated by reference in this
prospectus but not delivered with this prospectus. If you would like to obtain
this information from us, please direct your request, either in writing or by
telephone to R. Bruce Easter, Jr., General Counsel and Secretary, NEXTLINK
Communications, Inc., 500 108th Avenue N.E., Suite 2200, Bellevue, Washington
98004.
 
                                       75
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                          $750,000,000 GROSS PROCEEDS
 
                                    NEXTLINK
                              COMMUNICATIONS, INC.
 
                            % SENIOR NOTES DUE 2009
                        % SENIOR DISCOUNT NOTES DUE 2009
 
                                     [LOGO]
 
                                     ------
 
                              P R O S P E C T U S
                                         , 1999
 
                                   ---------
 
                              SALOMON SMITH BARNEY
                              GOLDMAN, SACHS & CO.
                            BEAR, STEARNS & CO. INC.
                           CREDIT SUISSE FIRST BOSTON
                             CHASE SECURITIES INC.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                                    PART II
 
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
    The following table sets forth the fees and expenses payable by the
Registrant in connection with this offering, other than underwriting discounts
and commissions. All the amounts shown are estimates, except the SEC
registration fee:
 
<TABLE>
<S>                                                                 <C>
SEC registration fee..............................................  $ 208,500
NASD fee..........................................................     30,500
Printing fees.....................................................    125,000
Legal fees and expenses...........................................    125,000
Accounting fees and expenses......................................     20,000
Miscellaneous fees and expenses...................................     41,000
                                                                    ---------
      Total.......................................................  $ 550,000
                                                                    ---------
                                                                    ---------
</TABLE>
 
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
    The Company is a Delaware corporation. In its Certificate of Incorporation,
the Company has adopted the provisions of Section 102(b)(7) of the Delaware
General Corporation Law (the "Delaware Law"), which enables a corporation in its
original certificate of incorporation or an amendment thereto to eliminate or
limit the personal liability of a director for monetary damages for breach of
the director's fiduciary duty, except (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) pursuant to Section 174 of the Delaware law (providing for
liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions) or (iv) for any transaction from which a director will
personally receive a benefit in money, property or services to which the
director is not legally entitled.
 
    The Company has also adopted indemnification provisions pursuant to Section
145 of the Delaware Law, which provides that a corporation may indemnify any
persons, including officers and directors, who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation), by reason of the fact
that such person was an officer, director, employee or agent of the corporation,
or is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided such officer, director, employee or
agent acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests and, with respect to criminal
proceedings, had no reasonable cause to believe that his conduct was unlawful. A
Delaware corporation may indemnify officers or directors in an action by or in
the right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against expenses
(including attorney's fees) that such officer or director actually and
reasonably incurred.
 
                                      II-1
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing a Form S-3 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Bellevue, State of Washington, on the 5th day of May, 1999.
 
<TABLE>
<S>                             <C>  <C>
                                NEXTLINK COMMUNICATIONS, INC.
 
                                By:           /s/ R. BRUCE EASTER, JR.
                                     -----------------------------------------
                                                R. Bruce Easter, Jr.
                                        VICE PRESIDENT, GENERAL COUNSEL AND
                                                     SECRETARY
</TABLE>
 
                               POWER OF ATTORNEY
 
    We, the undersigned officers and directors of NEXTLINK Communications, Inc.,
hereby severally and individually constitute and appoint Kathleen H. Iskra and
R. Bruce Easter, Jr., and each of them, as the true and lawful attorneys-in-fact
for the undersigned, in any and all capacities, with full power of substitution,
to sign any and all amendments to this Registration Statement (including
post-effective amendments), and to file the same with exhibits thereto and other
documents in connection therewith with the Securities and Exchange Commission,
granting unto said attorney-in-fact, and each of them, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he or
she might or could do in person hereby ratifying and confirming all that said
attorneys-in-fact may lawfully do or cause to be done by virtue hereof.
 
    Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
          SIGNATURE                       TITLE                    DATE
- ------------------------------  --------------------------  -------------------
 
<C>                             <S>                         <C>
                                Chairman of the Board and
     /s/ STEVEN W. HOOPER         Chief Executive Officer
- ------------------------------    (Principal Executive          May 5, 1999
       Steven W. Hooper           Officer)
 
      /s/ WAYNE M. PERRY
- ------------------------------  Vice Chairman and Director      May 5, 1999
        Wayne M. Perry
 
                                Vice President, Chief
                                  Financial Officer and
    /s/ KATHLEEN H. ISKRA         Treasurer (Principal
- ------------------------------    Financial Officer and         May 5, 1999
      Kathleen H. Iskra           Principal Accounting
                                  Officer)
 
- ------------------------------  Director
        Craig O. McCaw
</TABLE>
 
                                      II-5
<PAGE>
<TABLE>
<CAPTION>
          SIGNATURE                       TITLE                    DATE
- ------------------------------  --------------------------  -------------------
 
<C>                             <S>                         <C>
- ------------------------------  Director
       Dennis Weibling
 
    /s/ WILLIAM A. HOGLUND
- ------------------------------  Director                      April 20, 1999
      William A. Hoglund
 
     /s/ SHARON L. NELSON
- ------------------------------  Director                      April 20, 1999
       Sharon L. Nelson
 
    /s/ JEFFREY S. RAIKES
- ------------------------------  Director                        May 5, 1999
      Jeffrey S. Raikes
 
    /s/ GREGORY J. PARKER
- ------------------------------  Director                        May 5, 1999
      Gregory J. Parker
 
- ------------------------------  Director
        Nicolas Kauser
</TABLE>
 
                                      II-6

<PAGE>
                                                                    EXHIBIT 23.1
 
                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement on Form S-3 filed by NEXTLINK Communications, Inc.
 
                                          /s/ Arthur Andersen LLP
 
Seattle, Washington,
April 29, 1999


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission