NEXTLINK COMMUNICATIONS INC / DE, S-3/A, 1999-05-05

NEXTLINK COMMUNICATIONS INC / DE
S-3/A, 1999-05-05
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1999

REGISTRATION NO. 333-77577

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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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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>

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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)
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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)
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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>

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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. / / ______
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CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
NUMBER OF PROPOSED PROPOSED
SHARES MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE PER SHARE OFFERING AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PRICE(1) OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Class A common stock, par value $.02 per share... 9,890,000 $72.313 $715,175,570 $198,819(2)
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee.

(2) Previously paid.

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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.

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EXPLANATORY NOTE

This registration statement contains two forms of prospectuses: one we will
use in connection with an offering in the United States and Canada, which we
call the U.S. prospectus, and one that we will use in a concurrent international
offering outside the United States and Canada, which we call the international
prospectus. Some pages of the U.S. prospectus included in this registration
statement are followed by corresponding alternate pages we will use for the
international prospectus. We labeled each of these alternate pages "Alternate
Page for the International Prospectus." We will file final forms of each
prospectus with the Securities and Exchange Commission under Rule 424(b).

<PAGE>

SUBJECT TO COMPLETION, MAY 5, 1999

U.S. PROSPECTUS

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.
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[LOGO]

8,600,000 SHARES

NEXTLINK COMMUNICATIONS, INC.

CLASS A COMMON STOCK

--------------

NEXTLINK and the NEXTLINK stockholders listed on page 34 of this prospectus
are offering shares of our Class A common stock to the public. We are offering
4,982,050 newly issued shares of Class A common stock and the selling
stockholders are offering 3,617,950 shares that they currently hold.

A syndicate of U.S. underwriters will offer 6,880,000 of these shares in the
United States and Canada, and a syndicate of international underwriters will
offer the remaining 1,720,000 shares in other countries.

Shares of our Class A common stock are listed on The Nasdaq National Market
under the symbol "NXLK." On April 30, 1999, the last reported sale price of our
shares on The Nasdaq National Market was $73.25 per share.

--------------

INVESTING IN OUR CLASS A COMMON STOCK INVOLVES RISKS. A DESCRIPTION OF THESE
RISKS BEGINS ON PAGE 4.

Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.

--------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
----------- ---------
<S> <C> <C>
Public offering price....................................... $ $
Underwriting discounts and commissions...................... $ $
Proceeds, before expenses, to NEXTLINK...................... $ $
Proceeds to selling stockholders............................ $ $
</TABLE>

NEXTLINK and the selling stockholders have granted the underwriters the
right to purchase up to 1,290,000 additional shares of Class A common stock to
cover any over-allotments.

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SALOMON SMITH BARNEY

GOLDMAN, SACHS & CO.

BEAR, STEARNS & CO. INC.

CREDIT SUISSE FIRST BOSTON

MERRILL LYNCH & CO.

<PAGE>
SUBJECT TO COMPLETION, MAY 5, 1999

INTERNATIONAL PROSPECTUS
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>
[LOGO]

8,600,000 SHARES

NEXTLINK COMMUNICATIONS, INC.

CLASS A COMMON STOCK

A syndicate of international underwriters will offer 1,720,000 of these
shares outside the U.S. and Canada, and a syndicate of U.S. underwriters will
offer the remaining 6,880,000 shares in the U.S. and Canada.

INVESTING IN OUR CLASS A COMMON STOCK INVOLVES RISKS. A DESCRIPTION OF THESE
RISKS BEGINS ON PAGE 4.

NEXTLINK and the selling stockholders have granted the underwriters the
right to purchase up to 1,290,000 additional shares of Class A common stock to
cover any over-allotments.
--------------

SALOMON SMITH BARNEY INTERNATIONAL

GOLDMAN SACHS INTERNATIONAL

BEAR, STEARNS INTERNATIONAL LIMITED

CREDIT SUISSE FIRST BOSTON

MERRILL LYNCH INTERNATIONAL
<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
Class A common stock, 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".

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary.................................................. 1
Risk Factors........................................................ 4
Use of Proceeds..................................................... 11
Dividend Policy..................................................... 11
Capitalization...................................................... 12
Dilution............................................................ 13
Selected Historical Consolidated Financial and Operating Data....... 14
Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 17
Business............................................................ 23
Regulation.......................................................... 32
Selling Stockholders................................................ 34
Underwriting........................................................ 35
Legal Matters....................................................... 38
Experts............................................................. 38
Where You Can Find More Information................................. 38
</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

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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.

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
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THE OFFERING

<TABLE>
<S> <C>
Class A common stock offered by NEXTLINK
Communications, Inc......................... 4,982,050 shares
Class A common stock offered by selling
stockholders................................ 3,617,950 shares
Common stock to be outstanding after the
offering:
Class A common stock........................ 36,505,184 shares
Class B common stock........................ 29,184,372 shares
Nasdaq National Market symbol................. NXLK
Use of Proceeds............................... We intend to use the net proceeds to expand
our networks and services, introduce new
technologies and to fund operating losses,
working capital and possible acquisitions.
</TABLE>

We calculated outstanding shares above assuming no exercise of the
underwriters' overallotment option and based on the number of shares outstanding
as of April 29, 1999, excluding a total of 11,613,088 shares of Class A common
stock and 654,858 shares of Class B common stock issuable upon exercise of
options.

We are also concurrently offering, under a separate prospectus, % senior
notes due 2009 and % senior discount notes due 2009, from which we expect to
receive net proceeds of approximately $732.6 million. This equity offering and
the concurrent debt offering are not conditioned upon one another.

RISK FACTORS

You should read the "Risk Factors" section of this prospectus to learn about
the risks associated with holding NEXTLINK Class A common stock.

3
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RISK FACTORS

You should consider carefully the following risks before you decide to buy
our Class A common stock.

WE HAVE SUBSTANTIAL EXISTING DEBT AND WILL INCUR SUBSTANTIAL ADDITIONAL DEBT,
WHICH COULD DEPRIVE COMMON STOCKHOLDERS OF VALUE AND CONTROL

As of March 31, 1999, NEXTLINK had outstanding five issues of senior notes
totaling $2,023.0 million in principal amount and approximately $73.2 million in
miscellaneous debt obligations of our subsidiaries and we are offering an
additional $750.0 million aggregate principal amount of senior and senior
discount notes concurrently with this offering. Because we have these
substantial obligations, we may be unable to pay interest or principal on any or
all of these outstanding notes, which could result in a work-out or bankruptcy
that would dilute or eliminate the ownership interests of our common
stockholders.

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. If we fail to pay principal and interest on our notes when due, the
noteholders could declare a default and demand that we repay the entire amount
of defaulted notes. Unless we were able to find alternative financing to pay the
entire amount, the noteholders could seek a judgment and attempt to seize our
assets to satisfy the debt to them. Any action of this type would have a serious
adverse affect on our business and on the market price of the Class A common
stock.

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. We cannot assure you that we will ever establish an
adequate revenue base to produce an operating profit or generate adequate
positive cash flow to provide future capital expenditures and repayment of debt.

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 a large amount of additional capital
spending. Our capital spending plans have increased substantially 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 $343.8 million in net proceeds we expect to receive from this
equity offering, and the $732.6 million in net proceeds we expect to receive
from the concurrent debt 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 generate profits for stockholders, and
could even result in a payment default on our existing debt.

4
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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.

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

5
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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.

We cannot assure you that we will be able to overcome these advantages and
compete successfully with the incumbent carriers.

6
<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

7
<PAGE>

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.

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 THIS 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 this 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.

8
<PAGE>
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.

YOU WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION IN THE NET TANGIBLE BOOK
VALUE OF THE SHARES OF CLASS A COMMON STOCK FROM THE PUBLIC OFFERING PRICE

You will experience an immediate and substantial dilution of $64.25 per
share in the net tangible book value per share of your Class A common stock,
assuming a purchase price per share of $73.25.

WE DO NOT PLAN ON PAYING ANY DIVIDENDS ON OUR COMMON STOCK

We have not declared or paid any dividends on our common stock and we do not
plan on paying any dividends in the foreseeable future. The indentures governing
our outstanding notes restrict our ability to pay any dividends on our common
stock while any of the notes are outstanding. As a result, the potential return
on an investment in our common stock will depend solely on its stock market
performance for the foreseeable future.

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.

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.

9
<PAGE>
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 national end-to-end network, the introduction of IP and ATM
technologics, our management structure and our 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 4,982,050 shares of
common stock we are issuing in this offering will be approximately $343.8
million, at an assumed public offering price of $73.25 per share, after
deducting the estimated underwriting discounts and offering expenses. If the
underwriters exercise their over-allotment option in full, we estimate that the
net proceeds for the additional shares we would issue in connection with the
over-allotment option would be approximately $67.8 million. We will not receive
any proceeds from the sale of the 3,617,950 shares of Class A common stock being
offered by the selling stockholders in this offering.

In addition, under a separate prospectus, we are concurrently offering
% senior notes due 2009 and % senior discount notes due 2009. We
estimate that the net proceeds from the concurrent debt offering will be
approximately $732.6 million, after deducting estimated expenses. The equity
offering and the debt offering are not conditioned on one another.

We plan to use the net proceeds from this offering, together with our cash
on hand, and the net proceeds from the concurrent debt 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 and to fund operating
losses and working capital. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."

DIVIDEND POLICY

We do not anticipate paying any cash dividends on our common stock in the
foreseeable future. The indentures governing the terms of our outstanding
indebtedness restrict us from paying dividends while the indebtedness is
outstanding.

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 common stock in this offering, the acquisitions of
WNP and the 50% interest in NEXTBAND that we do not already own, and the
concurrent debt offering. The debt offering and the equity offering are not
conditioned on one another.

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
------------------------------------------------------------------
AS ADJUSTED
AS ADJUSTED FOR THE DEBT
FOR THE EQUITY AND EQUITY
AS ADJUSTED OFFERING AND OFFERINGS AND
FOR THE WNP AND THE WNP AND
THE EQUITY NEXTBAND NEXTBAND
ACTUAL OFFERING TRANSACTIONS(3) TRANSACTIONS(3)
------------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
Cash, cash equivalents and marketable
securities................................. $ 1,244,406 $ 1,588,218 $ 1,102,726 $ 1,835,301
Pledged securities(1)........................ 21,821 21,821 21,821 21,821
------------------ -------------- -------------- --------------
Total...................................... $ 1,266,227 $ 1,610,039 $ 1,124,547 $ 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 2,042,096 2,042,096 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 (34,312,771 as
adjusted to reflect the sale of common
stock in this offering, and 36,410,652 as
further adjusted to reflect the
acquisition of WNP); Class B, 44,133,600
shares authorized, 29,184,372 shares
issued and outstanding(2)................ 360,213 704,025 1,054,463 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) 104,966 455,404 455,404
------------------ -------------- -------------- --------------
Total capitalization....................... $ 2,372,768 $ 2,716,580 $ 3,067,018 $ 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 this equity offering.

12
<PAGE>
DILUTION

The net tangible book value of NEXTLINK as of March 31, 1999 was
approximately $227.9 million or $4.15 per share of common stock. Net tangible
book value per share represents the amount of total tangible assets less total
liabilities, divided by the shares of common stock outstanding as of March 31,
1999. The pro forma net tangible book value of NEXTLINK as of March 31, 1999,
would have been $571.7 million, or $9.00 per share, after giving effect to the
issuance and sale of the 8,600,000 shares of common stock offered hereby at an
assumed initial public offering price of $73.25 per share, after deducting
estimated underwriting discounts and commissions and estimated offering
expenses.

This represents an immediate increase in pro forma net tangible book value
per share of $4.81 to existing stockholders and an immediate dilution per share
of $61.04 to new investors. The following table illustrates this per share
dilution:

<TABLE>
<S> <C> <C>
Assumed public offering price............................. $73.25
Net tangible book value before this offering............ $4.15
Increase in pro forma net tangible book value
attributable to net proceeds from the stock
offering.............................................. 4.85
---------
Pro forma net tangible book value per share after
offering................................................ 9.00
---------
Dilution to new investors................................. $64.25
---------
---------
</TABLE>

The following table summarizes, on a pro forma basis, as of March 31, 1999,
the number of shares of Class A common stock purchased in this offering, the
aggregate cash consideration paid and the average price per share paid by
existing stockholders for common stock and by new investors purchasing shares of
Class A common stock in this offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------- --------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Existing Stockholders........................ 54,897,143 86% $ 330,298,000 34% $ 6.02
New Investors................................ 8,600,000 14% 629,950,000 66% $ 73.25
------------ --- -------------- ---
Total...................................... 63,497,143 100% $ 960,248,000 100% $ 15.12
------------ --- -------------- ---
------------ --- -------------- ---
</TABLE>

The foregoing discussion and tables assume no exercise of any stock options.
As of March 31, 1999, there were options outstanding to purchase a total of
11,582,405 shares of Class A common stock and 654,858 shares of Class B common
stock with a combined weighted average exercise price of $26.20 per share. To
the extent that any of these options are exercised, there may be further
dilution to new investors.

13
<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>

14
<PAGE>

<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AS ADJUSTED
AS ADJUSTED FOR THE DEBT
FOR THE EQUITY AND EQUITY
OFFERING AND OFFERINGS, AND
AS OF DECEMBER 31, AS ADJUSTED THE WNP AND THE WNP AND
----------------------------------------------------- FOR THE EQUITY NEXTBAND NEXTBAND
1994 1995 1996 1997 1998 ACTUAL OFFERING TRANSACTIONS(5) TRANSACTIONS(5)
--------- --------- --------- --------- --------- --------- -------------- -------------- --------------
CONSOLIDATED
BALANCE
SHEET DATA:
Cash, cash
equivalents
and
marketable
securities... $ 25 $ 1,350 $ 124,520 $ 742,357 $1,478,062 $1,244,406 $1,588,218 $ 1,102,726 $ 1,835,301
Pledged
securities(4).. -- -- 101,438 62,610 21,500 21,821 21,821 21,821 21,821
Working
capital..... 14 (6,232) 137,227 744,510 1,408,501 1,195,396 1,539,208 1,053,716 1,786,291
Property and
equipment,
net......... 134 29,664 97,784 253,653 594,408 701,546 701,546 701,546 701,546
Total
assets...... 690 53,461 390,683 1,219,978 2,483,106 2,506,678 2,850,490 3,200,928 3,950,928
Long-term
debt........ -- 1,590 356,262 750,000 2,013,192 2,023,032 2,023,032 2,023,032 2,773,032
Redeemable
preferred
stock, net
of issuance
costs....... -- -- -- 313,319 556,168 569,518 569,518 569,518 569,518
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) 104,966 455,404 455,404
</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 this offering.

15
<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>

16
<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

17
<PAGE>
$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

- 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.

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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 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.

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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 increases our
level of capital expenditures and operating losses and requires us to make a
substantial portion of our capital investments 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 and for the introduction of new
technologies. 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;

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- 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;

- the purchase and installation of equipment associated with deployment of
DSL; and

- 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, and $1,588.2 million on a pro forma basis after giving effect to this
offering, and $2,320.8 million on a pro forma basis after giving effect to this
offering and the concurrent debt 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 approximately 98 million people live or 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 this 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

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$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.

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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.

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- 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,
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

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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.

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

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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 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.

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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.

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

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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.

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;

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- 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
telecommunications managers to benefit from efficiencies, 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;

- 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.

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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>

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.

30
<PAGE>

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.

31
<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

32
<PAGE>
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 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.

33
<PAGE>
SELLING STOCKHOLDERS

The following table lists the selling stockholders and the number of shares
of Class A common stock they own. Based on information provided to us from the
selling stockholders, none of the selling stockholders has, or within the past
three years has had, any position, office or other material relationship with
NEXTLINK or its affiliates.

<TABLE>
<CAPTION>
NUMBER OF CLASS
A CLASS A
CLASS A SHARES SHARES TO BE SHARES OWNED
OWNED PRIOR TO SOLD IN AFTER
NAME OF SELLING STOCKHOLDER OFFERING OFFERING OFFERING
- ----------------------------------------------------------------- --------------- --------------- -------------
<S> <C> <C> <C>
Alta Communications VI, LP....................................... 257,432 182,224 75,208
Alta-Comm S By S, LLC............................................ 5,860 4,148 1,712
Columbia Capital Corporation..................................... 24,200 24,200 --
Providence Equity Partners, L.P.................................. 486,883 344,641 142,242
Providence Equity Partners II, L.P............................... 6,789 4,806 1,983
Madison Dearborn Capital Partners II, L.P........................ 658,229 465,928 192,301
Prime VIII, L.P.................................................. 115,190 81,537 33,653
Venture Fund I, LP............................................... 8,228 3,843 4,385
AT&T Venture Fund II, LP......................................... 74,051 34,586 39,465
Special Partners Fund, LP........................................ 12,521 5,848 6,673
Special Partners Fund International, LP.......................... 69,757 32,580 37,177
Advanced MobileComm Technologies, Inc............................ 164,557 116,482 48,075
HarbourVest Venture Partners V - Direct Fund, L.P................ 329,114 232,964 96,150
Norwest Venture Partners VI, LP.................................. 329,114 232,964 96,150
Excelsior Private Equity Fund II, Inc............................ 164,557 116,482 48,075
Global Private Equity III L.P.................................... 267,340 189,237 78,103
Advent PGGM Global LP............................................ 41,139 29,120 12,019
Advent Partners GPE III L.P...................................... 4,048 2,865 1,183
Advent Partners North America GPE III L.P........................ 1,218 862 356
Advent Partners L.P.............................................. 9,873 6,989 2,884
Digital Media and Communications L.P............................. 61,676 43,657 18,019
Adwest L.P....................................................... 6,582 4,659 1,923
Oakstone Ventures L.P............................................ 25,704 18,195 7,509
TelAdvent L.P.................................................... 10,268 7,268 3,000
Formus Communications, Inc....................................... 329,114 232,964 96,150
Spectrum Equity Investors, II, L.P............................... 329,114 232,964 96,150
Chase Venture Capital Associates, L.P............................ 658,229 465,928 192,301
CEA Capital Partners USA, L.P.................................... 125,771 89,027 36,744
CEA Capital Partners USA, CI, L.P................................ 38,786 27,455 11,331
Battery Ventures IV, L.P......................................... 162,089 114,733 47,356
Battery Investment Partners IV, LLC.............................. 2,468 1,747 721
Media/Communications Partners III L.P............................ 156,329 110,658 45,671
M/C Investors L.L.C.............................................. 8,228 5,824 2,404
Tigris Rivanna LLC............................................... 42,528 29,769 12,759
Thomas H. Jones.................................................. 146,086 102,260 43,826
Trygve E. Myhren................................................. 12,881 6,747 6,134
J. Barclay Jones................................................. 14,286 5,714 8,572
Mark J. Emery.................................................... 3,588 1,794 1,794
Raymond D. Keneipp............................................... 3,588 1,900 1,688
Bart Schneider................................................... 1,903 1,903 --
Brian Eick....................................................... 355 355 --
Melissa Leitner.................................................. 123 123 --
--------------- --------------- -------------

Total.......................................................... 5,169,796 3,617,950 1,551,846
--------------- --------------- -------------
--------------- --------------- -------------
</TABLE>

<PAGE>
UNDERWRITING

This offering consists of (1) an offering of 6,880,000 shares of NEXTLINK's
common stock in the United States and Canada and (2) a concurrent offering of
1,720,000 shares of NEXTLINK's common stock outside the United States and
Canada. Salomon Smith Barney Inc. is the global coordinator and bookrunner of
this offering.

Subject to the terms and conditions stated in the U.S. underwriting
agreement, each U.S. underwriter named below has severally agreed to purchase,
and NEXTLINK and the selling stockholders have agreed to sell to such U.S.
underwriter, the number of shares set forth opposite its name:

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
- --------------------------------------------------------------------------------- ----------
<S> <C>
Salomon Smith Barney Inc. .......................................................
Goldman, Sachs & Co. ............................................................
Bear, Stearns & Co. Inc. ........................................................
Credit Suisse First Boston Corporation...........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...........................................................
Total....................................................................
</TABLE>

The U.S. underwriting agreement provides that the obligations of the U.S.
underwriters to purchase the shares included in this offering are subject to
approval of certain legal matters by counsel and to certain other conditions.
The U.S. underwriters are obligated to purchase all the shares (other than those
covered by their over-allotment option described below) if they purchase any of
the shares.

The U.S. underwriters, for whom Salomon Smith Barney Inc., Goldman, Sachs &
Co., Bear, Stearns & Co. Inc., Credit Suisse First Boston Corporation and
Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as
representatives, propose to offer some of the shares directly to the public at
the public offering price set forth on the cover page of this prospectus and
some of the shares to certain dealers at the public offering price less a
concession not in excess of $ per share. The U.S. underwriters may allow,
and such dealers may reallow, a concession not in excess of $ per share on
sales to certain other dealers. After the initial offering of the shares to the
public, the public offering price and such concessions may be changed by the
representatives.

NEXTLINK and the selling stockholders have granted to the U.S. underwriters
an option, exercisable for 30 days from the date of this prospectus, to purchase
up to 1,032,000 additional shares of common stock at the public offering price
less the underwriting discount. The U.S. underwriters may exercise such option
solely for the purpose of covering over-allotments, if any, in connection with
this offering. To the extent such option is exercised, each U.S. underwriter
will be obligated, subject to certain conditions, to purchase a number of
additional shares approximately proportionate to such U.S. underwriter's initial
purchase commitment. If the underwriters exercise their overallotment option,
75% of the shares sold pursuant to this option will be issued by NEXTLINK for
its own account, and the remaining 25% will be sold for the account of the
selling stockholders in the same proportion as the number of shares being sold
for their respective accounts in the offering.

35
<PAGE>
Alternate Page for the International Prospectus

UNDERWRITING

This offering consists of (1) an offering of 1,720,000 shares of NEXTLINK's
common stock outside the United States and Canada and (2) a concurrent offering
of 6,880,000 shares of NEXTLINK's common stock in the United States and Canada.
Salomon Smith Barney Inc. is the global coordinator and bookrunner of this
offering.

Subject to the terms and conditions stated in the international underwriting
agreement, each international underwriter named below has severally agreed to
purchase, and NEXTLINK and the selling stockholders have agreed to sell to such
international underwriter, the number of shares set forth opposite its name:

<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
- --------------------------------------------------------------------------------- ----------
<S> <C>
Salomon Brothers International Limited...........................................
Goldman Sachs International......................................................
Bear, Stearns International Limited..............................................
Credit Suisse First Boston (Europe) Limited......................................
Merrill Lynch International......................................................
Total....................................................................
</TABLE>

The international underwriting agreement provides that the obligations of
the international underwriters to purchase the shares included in this offering
are subject to approval of certain legal matters by counsel and to certain other
conditions. The international underwriters are obligated to purchase all the
shares (other than those covered by their over-allotment option described below)
if they purchase any of the shares.

The international underwriters, for whom Salomon Brothers International
Limited, Goldman Sachs International, Bear, Stearns International Limited,
Credit Suisse First Boston (Europe) Limited and Merrill Lynch International are
acting as representatives, propose to offer some of the shares directly to the
public at the public offering price set forth on the cover page of this
prospectus and some of the shares to certain dealers at the public offering
price less a concession not in excess of $ per share. The international
underwriters may allow, and such dealers may reallow, a concession not in excess
of $ per share on sales to certain other dealers. After the initial
offering of the shares to the public, the public offering price and such
concessions may be changed by the representatives.

NEXTLINK and the selling stockholders have granted to the international
underwriters an option, exercisable for 30 days from the date of this
prospectus, to purchase up to 258,000 additional shares of common stock at the
public offering price less the underwriting discount. The international
underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, in connection with this offering. To the extent such
option is exercised, each international underwriter will be obligated, subject
to certain conditions, to purchase a number of additional shares approximately
proportionate to such international underwriter's initial purchase commitment.
If the underwriters exercise their overallotment option, 75% of the shares sold
pursuant to this option will be issued by NEXTLINK for its own account, and the
remaining 25% will be sold for the account of the selling stockholders in the
same proportion as the number of shares being sold for their respective accounts
in the offering.

NEXTLINK and the selling stockholders have also entered into an underwriting
agreement with a syndicate of U.S. underwriters providing for the concurrent
offering and

35
<PAGE>

NEXTLINK and the selling stockholders have also entered into an underwriting
agreement with a syndicate of international underwriters providing for the
concurrent offering and sale of 1,720,000 shares of common stock outside the
United States and Canada. Salomon Brothers International Limited is the lead
manager of the underwriters for the international offering. The offering price
and aggregate underwriting discounts and commissions per share for the U.S.
offering and the international offering are identical. In addition, the U.S.
offering and the international offering are each conditioned upon the closing of
the other.

The U.S. and international underwriters will enter into an agreement in
which they agree to restrictions on where and to whom they and any dealer
purchasing from them may offer shares of common stock. The U.S. and
international underwriters also have agreed that they may sell shares of common
stock between their respective underwriting syndicates.

NEXTLINK and its executive officers have agreed that, subject to certain
exceptions, for a period of 90 days from the date of this prospectus, NEXTLINK
and its executive officers will not, without prior written consent of Salomon
Smith Barney Inc., offer, sell, contract to sell, or otherwise dispose of, any
shares of NEXTLINK's common stock or any securities convertible into, or
exercisable or exchangeable for, common stock. Salomon Smith Barney Inc. in its
sole discretion may release any of the securities subject to these lock-up
agreements at any time without notice.

The following tables shows the underwriting discounts and commissions to be
paid by NEXTLINK to the U.S. underwriters in connection with this offering.
These amounts are shown assuming both no exercise and full exercise of the
underwriters' option to purchase additional shares of common stock.

<TABLE>
<CAPTION>
PAID BY NEXTLINK &
THE SELLING STOCKHOLDERS
NO EXERCISE FULL EXERCISE
------------- -------------
<S> <C> <C>
Per share...................................................... $ $
Total.......................................................... $ $
</TABLE>

In connection with this offering, Salomon Smith Barney Inc., on behalf of
the underwriters, may over-allot, or engage in syndicate covering transactions,
stabilizing transactions and penalty bids. Over-allotment involves syndicate
sales of common stock in excess of the number of shares to be purchased by the
underwriters in this offering, which creates a syndicate short position.
Syndicate covering transactions involve purchases of the common stock in the
open market after the distribution has been completed in order to cover
syndicate short positions. Stabilizing transactions consist of certain bids or
purchases of common stock while this offering is in progress. Penalty bids
permit the underwriters to reclaim a selling concession from a syndicate member
when Salomon Smith Barney Inc., in covering syndicate short positions or making
stabilizing purchases, repurchases shares originally sold by that syndicate
member. These activities may cause the price of NEXTLINK's common stock to be
higher than the price that otherwise would exist in the open market in the
absence of such transactions. These transactions may be effected on the Nasdaq
National Market, in the over-the-counter market or otherwise and, if commenced,
may be discontinued at any time.

36
<PAGE>
Alternate Page for the International Prospectus

sale of 6,880,000 shares of common stock in the United States and Canada.
Salomon Smith Barney Inc. is the lead manager of the underwriters for the U.S.
offering. The offering price and aggregate underwriting discounts and
commissions per share for the international offering and the U.S. offering are
identical. In addition, the international offering and the U.S. offering are
each conditioned upon the closing of the other.

The international and U.S. underwriters will enter into an agreement in
which they agree to restrictions on where and to whom they and any dealer
purchasing from them may offer shares of common stock. The international and
U.S. underwriters also have agreed that they may sell shares of common stock
between their respective underwriting syndicates.

The following tables shows the underwriting discounts and commissions to be
paid by NEXTLINK to the international underwriters in connection with this
offering. These amounts are shown assuming both no exercise and full exercise of
the underwriters' option to purchase additional shares of common stock.

In addition, in connection with this offering, certain of the underwriters
(and selling group members) may engage in passive market making transactions in
the common stock on the Nasdaq National Market, prior to the pricing and
completion of this offering. Passive market making consists of displaying bids
on the Nasdaq National Market no higher than the bid prices of independent
market makers and making purchases at prices no higher than

36
<PAGE>

market making consists of displaying bids on the Nasdaq National Market no
higher than the bid prices of independent market makers and making purchases at
prices no higher than those independent bids and effected in response to order
flow. Net purchases by a passive market maker on each day are limited to a
specific percentage of the passive market maker's average daily trading volume
in the common stock during a specified period and must be discontinued when such
limit is reached. Passive market making may cause the price of NEXTLINK's common
stock to be higher than the price that otherwise would exist in the open market
in the absence of such transactions. If passive market making is commenced, it
may be discontinued at any time.

The representatives have performed certain investment banking and advisory
services for NEXTLINK from time to time for which they have received customary
fees and expenses. The representatives may, from time to time, engage in
transactions with and perform services for us in the ordinary course of their
business.

NEXTLINK has agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments the underwriters may be required to make in respect of any of those
liabilities.

Up to 2,894,360 of the shares to be offered in the U.S. offering will be
sold by the selling stockholders, who are parties to the U.S. underwriting
agreement.

37
<PAGE>
Alternate Page for the International Prospectus

those independent bids and effected in response to order flow. Net purchases by
a passive market maker on each day are limited to a specific percentage of the
passive market maker's average daily trading volume in the common stock during a
specified period and must be discontinued when such limit is reached. Passive
market making may cause the price of NEXTLINK's common stock to be higher than
the price that otherwise would exist in the open market in the absence of such
transactions. If passive market making is commenced, it may be discontinued at
any time.

Up to 723,590 of the shares to be offered in the international offering will
be sold by the selling stockholders, who are parties to the international
underwriting agreement.

37
<PAGE>
LEGAL MATTERS

Willkie Farr & Gallagher, New York, New York, counsel for NEXTLINK, will
pass upon the validity of the shares of Class A common stock being issued under
this prospectus. The validity of the shares will be passed upon for the
underwriters by Sullivan & Cromwell.

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 shares of Class A common stock 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 Class A common shares
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.

38
<PAGE>
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.

39
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

8,600,000 SHARES

NEXTLINK

COMMUNICATIONS, INC.

CLASS A COMMON STOCK

[LOGO]

------

U. S. 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

MERRILL LYNCH & CO.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

8,600,000 SHARES

NEXTLINK
COMMUNICATIONS, INC.

CLASS A COMMON STOCK

[LOGO]

------

I N T E R N A T I O N A L P R O S P E C T U S
1999

---------

SALOMON SMITH BARNEY INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
BEAR, STEARNS INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON
MERRILL LYNCH INTERNATIONAL

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of common stock by a
holder that is not a "U.S. person" (a "non-U.S. holder"). A "U.S. person" is a
person or entity that, for U.S. federal income tax purposes, is any of the
following:

- a citizen or resident of the United States;

- a corporation or other entity taxable as a corporation for U.S. federal
income tax purposes created or organized in the United States or under the
laws of the United States or of any political subdivision thereof
(including each state and the District of Columbia);

- an estate whose income is includible in gross income for U.S. federal
income tax purposes regardless of its source; or

- a trust subject to the supervision of a court within the United States and
the control of one or more United States persons as described in Section
7701 (a) (30) of Internal Revenue Code of 1986, as amended (the "Code").

This discussion is based on the provisions of the Code and administrative
and judicial interpretations as of the date hereof, all of which may be changed
either retroactively or prospectively. This discussion does not address all the
aspects of U.S. federal income and estate taxation that may be relevant to
non-U.S. holders in light of their particular circumstances, nor does it address
tax consequences under the laws of any U.S. state, municipality or other taxing
jurisdiction or under the laws of any jurisdiction other than the United States.

The following discussion is merely a summary of the principal U.S. federal
income and estate tax consequences of the ownership and disposition of common
stock by non-U.S. Holders.

THUS, WE URGE ALL INVESTORS TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE APPLICATION AND EFFECT OF THE U.S. FEDERAL INCOME AND ESTATE TAX
CONSEQUENCES (CURRENT AND PROSPECTIVE) OF THE OWNERSHIP AND DISPOSITION OF THE
COMMON STOCK, AS WELL AS THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE,
LOCAL, FOREIGN, OR OTHER TAXING JURISDICTION.

DIVIDENDS

We do not intend to pay any dividends in the foreseeable future. In the
event we do pay dividends to a non-U.S. holder, however, these dividends will
generally be subject to United States federal withholding tax at a 30% rate or
such lower rate as may be specified by an applicable income tax treaty, except
as described in the next paragraph.

Generally, there is no withholding tax on dividends that are:

- effectively connected with the non-U.S. holder's conduct of a trade or
business within the United States, as long as if you file a Form 4224 or
an applicable successor form is filed with us or

- if an applicable tax treaty so requires, attributable to a United States
permanent establishment of the non-U.S. holder,

If either exception applies, dividends are subject to the U.S. federal income
tax on net income applicable to U.S. persons. Effectively connected dividends
received by a foreign corporation
<PAGE>
Alternate Page for the International Prospectus
may be subject to an additional "branch profits tax" at a 30% rate (or a lower
rate under an applicable income tax treaty) when such dividends are deemed
repatriated from the United States.

Current U.S. Treasury regulations create a presumption for withholding tax
purposes that, unless the payor has knowledge to the contrary, dividends paid to
an address outside the United States were paid to a resident of the country of
address. For dividends paid on or prior to December 31, 2000, the same
address/presumption system currently applies, in general, to determine the
applicability of reduced rate of withholding under U.S. tax treaties. Thus,
non-U.S. holders receiving dividends at addresses outside the United States
generally are not currently required to file tax forms to obtain the benefit of
an applicable treaty rate. However, under U.S. Treasury regulations that were
recently finalized, this address/ presumption system will no longer apply for
purposes of claiming treaty benefits for payments made after December 31, 2000.
Instead, to claim these benefits, a non-U.S. holder will have to file a
certification attesting eligibility. If there is excess withholding on a person
eligible for a treaty benefit, the person can file for a refund with the U.S.
Internal Revenue Service.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to U.S. federal income tax
on gain recognized upon a disposition of common stock unless:

- the gain is effectively connected with the conduct of a trade or business
in the United States of the non-U.S. holder (or of a partnership in which
the non-U.S. holder is a member that holds the common stock or, if a tax
treaty applies, is attributable to a United States permanent establishment
of the non-U.S. holder;

- in the case of a non-U.S. holder who is an individual and holds the common
stock as a capital asset within the meaning of Section 1221 of the Code
(or is a member in a partnership that holds the common stock as a capital
asset), such holder is present in the United States for 183 or more days
in the taxable year of the disposition and certain other conditions are
met;

- the non-U.S. holder is subject to tax under the provision of U.S. tax law
applicable to certain U.S. expatriates or

- we are or have been a "U.S. real property holding corporation" for federal
income tax purposes at any time within the shorter of the five-year period
preceding such disposition or such non-U.S. holder's holding period.

We are not currently, have not been and do not anticipate becoming a "U.S.
real property holding corporation" for U.S. federal income tax purposes. Even if
we were to become one, any gain recognized by a non-U.S. holder, on the
disposition of the common stock, still would not be subject to U.S. tax if the
shares were considered to be "regularly traded" (as per the meaning of the
applicable U.S. Treasury regulations) on an established securities market (e.g.,
The Nasdaq National market, on which our shares are currently quoted) and the
non-U.S. holder did not own, actually, constructively, directly, or indirectly,
more than 5% of such class of stock at any time during the shorter of the
periods described above.
<PAGE>
Alternate Page for the International Prospectus

INFORMATION REPORTING AND BACKUP WITHHOLDING

U.S. Treasury regulations require us to report annually to the IRS and to
each non-U.S. holder the amount of dividends paid to, and the tax withheld with
respect to, such holder, regardless of whether tax was actually withheld. That
information may also be made available to the tax authorities of the country in
which the non-U.S. holder resides.

United States federal backup withholding (which generally is withholding
imposed at the rate of 31% on payments to persons not otherwise exempt who fail
to furnish identifying information to the IRS) will generally not apply to
dividends paid to a non-U.S. holder that are subject to withholding at the 30%
rate (or would be so subject but for a reduced rate under an applicable treaty).
In addition, for dividends paid on or prior to December 31, 2000, the payor of
dividends may rely on the payee's foreign address in determining that the payee
is exempt from backup withholding, unless the payor has knowledge that the payee
is a U.S. person. However, as discussed above, for payments made after December
31, 2000 and the payee will have to furnish a certification to the payor to
claim exemption from backup withholding.

The backup withholding and information reporting requirements also apply to
the gross proceeds paid to a non-U.S. holder upon the disposition of common
stock by or through a U.S. office of a U.S or foreign broker, unless the holder
certifies to the broker under penalty of perjury as to its name, address and
status as a non-U.S. holder or the holder otherwise establishes an exemption.
Information reporting requirements, (but not backup withholding) will apply to a
payment of the proceeds of a disposition of common stock by or through a foreign
office of:

- a U.S. broker,

- a foreign broker 50% or more of whose gross income for certain periods is
effectively connected with the conduct of a trade or business in the
United States, or

- a foreign broker that is a "controlled foreign corporation" for U.S.
federal income tax purposes, unless the broker has documentary evidence in
its records that the holder is a non-U.S. holder and certain other
conditions are met, or the holder otherwise establishes an exemption.

Neither backup withholding nor information reporting will generally apply to
a payment of the proceeds of a disposition of common stock by or through a
foreign office of a foreign broker not subject to the preceding sentence.

Any amounts withheld under the backup withholding rules will be refunded or
credited against the non-U.S. holder's United States federal income tax
liability, provided that required information is furnished to the IRS.

FEDERAL ESTATE TAXES

Common stock owned or treated as being owned by an individual who is neither
a citizen nor a resident of the United States for federal estate tax purposes at
the date of death will be included in such individual's gross estate for U.S.
federal estate tax purposes and may be subject to U.S. federal estate tax unless
an applicable estate tax treaty provides otherwise. Estates of nonresident
aliens are generally allowed a statutory credit for U.S. federal estate tax
purposes. Estate tax treaties may permit a larger credit. A special definition
of the term "U.S. resident" applies for U.S. federal estate tax purposes.
<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.............................................. $ 198,819
NASD fee.......................................................... 30,500
Printing fees..................................................... 150,000
Legal fees and expenses........................................... 200,000
Accounting fees and expenses...................................... 30,000
Miscellaneous fees and expenses................................... 40,681
---------
Total....................................................... $ 650,000
---------
---------
</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>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS:

<TABLE>
<C> <S>
1 Form of Underwriting Agreement.*

3.1 Certificate of Incorporation of the Company.(1)

3.2 By-laws of the Company.(1)

4.1 Indenture, dated November 12, 1998, by and among NEXTLINK Communications, Inc. and
United States Trust Company of New York, as trustee, relating to the 10 3/4% Senior
Notes due 2009.(2)

4.2 Indenture, dated as of April 25, 1996, by and among NEXTLINK Communications, Inc.,
NEXTLINK Capital, Inc. and United States Trust Company of New York, as Trustee,
relating to 12 1/2% Senior Notes due April 15, 2006, including form of global
note.(2)

4.3 First Supplemental Indenture, dated as of January 31, 1997, by and among the
Company, NEXTLINK Communications, L.L.C., NEXTLINK Capital, Inc. and United States
Trust Company of New York, as Trustee.(3)

4.4 Indenture, dated September 25, 1997, between United States Trust Company, as Trustee
and NEXTLINK Communications, Inc., relating to the 9 5/8% Senior Notes due 2007.(+)

4.5 Indenture, dated March 3, 1998, between United States Trust Company, as Trustee and
NEXTLINK Communications, Inc., relating to the 9% Senior Notes due 2008.(5)

4.6 Indenture, dated November 12, 1998, by and among NEXTLINK Communications, Inc. and
United States Trust Company of New York, as trustee, relating to the 10 3/4% Notes
due 2008.(10)

4.7 Certificate of Designation of Powers, Preferences and Relative, Participating,
Optional and Other Special Rights of 6 1/2% Cumulative Convertible Preferred Stock
and Qualifications, Limitations and Restrictions Thereof.(1)

4.8 Form of stock certificate of 6 1/2% Cumulative Convertible Preferred Shares*

4.9 Form of stock certificate of Class A common stock(9)

4.10 Indenture, dated April 1, 1998, between United States Trust Company, as Trustee and
NEXTLINK Communications, Inc., relating to the 9.45% Senior Discount Notes due
2008.(6)

4.11 Second Supplemental Indenture, dated June 3, 1998, amending Indenture dated April
25, 1996, by and among NEXTLINK Communications, Inc., NEXTLINK Capital, Inc. and
United States Trust Company of New York, as Trustee.(1)

4.12 First Supplemental Indenture, dated June 3, 1998, amending Indenture dated September
25, 1997, by and between NEXTLINK Communications, Inc. and United States Trust
Company of New York, as Trustee.(1)

4.13 First Supplemental Indenture, dated June 3, 1998, amending Indenture dated March 3,
1998, by and between NEXTLINK Communications, Inc. and United States Trust Company
of New York, as Trustee.(1)

4.14 First Supplemental Indenture, dated June 3, 1998, amending Indenture dated April 1,
1998, by and between NEXTLINK Communications, Inc. and United States Trust Company
of New York, as Trustee.(1)

5.1 Opinion of Willkie Farr & Gallagher.*

10.1 Stock Option Plan of the Company, as amended.(1)

10.2 Employee Stock Purchase Plan of the Company.(1)
</TABLE>

II-2
<PAGE>

<TABLE>
<C> <S>
10.3 Fiber Lease and Innerduct Use Agreement, dated February 23, 1998, by and between the
Company and Metromedia Fiber Network, Inc. (5)

10.4 Amendment No. 1 to Fiber Lease and Innerduct Use Agreement, dated March 4, 1998, by
and between the Company and Metromedia Fiber Network, Inc. (5)

10.5 Agreement and Plan of Merger, dated as of January 14, 1999, among the Company, WNP
Communications, Inc. and PCO Acquisition Corp. (7)

10.6 NEXTBAND Interests Purchase Agreement, dated March 31, 1999, between Nextel Spectrum
Acquisition Corp. and NEXTLINK Communications, Inc.(11)

21 Subsidiaries of the Registrant.(5)

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Willkie Farr & Gallagher (included in their opinion filed as Exhibit
5.1).*

24 Power of Attorney.+
</TABLE>

- ------------------------

* To be filed by amendment.

+ Previously filed.

(1) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, Inc. (Commission File No.
333-53975).

(2) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, L.L.C. (the predecessor of
NEXTLINK Communications, Inc.) and NEXTLINK Capital, Inc. (Commission File
No. 333-4603).

(3) Incorporated herein by reference to the exhibit filed with the Annual Report
on Form 10-KSB for the year ended December 31, 1996 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc. (Commission File Nos.
33-04603 and 333-04603-01).

(4) Incorporated here by reference to the exhibit filed with the Registration
Statement on Form S-1 of NEXTLINK Communications, Inc. (Commission File No.
333-32003).

(5) Incorporated herein by reference to the exhibit filed with the Annual Report
on Form 10-KSB for the year ended December 31, 1997 of NEXTLINK
Communications, Inc. and NEXTLINK Capital, Inc. (Commission File Nos.
333-04603 and 333-04603-01).

(6) Incorporated herein by reference to the exhibit filed with the quarterly
report on Form 10-Q for the quarterly period ended March 31, 1998 of
NEXTLINK Communications, Inc. (Commission File No. 000-22939).

(7) Incorporated herein by reference to the exhibits filed with the current
report on Form 8-K filed on January 19, 1999 (Commission File No.
000-22939).

(8) Incorporated herein by reference to the exhibits filed with the Registration
Statement on Form S-4 of NEXTLINK Communications, Inc. (Commission File No.
333-71749).

(9) Incorporated herein by reference to the exhibit filed with the Registration
Statement on Form S-1 of NEXTLINK Communications, Inc. (Commission File No.
333-32001).

(10) Incorporated herein by reference to the exhibits filed with the
Registration Statement on Form S-4 of NEXTLINK Communications, Inc.
(Commission File No. 333-71749.

(11) Incorporated herein by reference to the exhibits filed with the current
report on Form 8-K filed on March 31, 1999 (Commission File No. 000-22939).

(b) Financial Statement Schedules: None.

II-3
<PAGE>
ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 20 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the option of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of this Registration Statement through the date
of responding to the request.

The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this Registration Statement when it became effective.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

II-4
<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>

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
* Chief Executive Officer
- ------------------------------ (Principal Executive May 5, 1999
Steven W. Hooper Officer)

*
- ------------------------------ Vice Chairman and Director May 5, 1999
Wayne M. Perry

Vice President, Chief
Financial Officer and
* Treasurer (Principal
- ------------------------------ Financial Officer and May 5, 1999
Kathleen H. Iskra Principal Accounting
Officer)

- ------------------------------ Director
Craig O. McCaw

- ------------------------------ Director
Dennis Weibling

*
- ------------------------------ Director May 5, 1999
William A. Hoglund

*
- ------------------------------ Director May 5, 1999
Sharon L. Nelson
</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
*
- ------------------------------ Director May 5, 1999
Jeffrey S. Raikes

*
- ------------------------------ Director May 5, 1999
Gregory J. Parker

- ------------------------------ Director
Nicolas Kauser
</TABLE>

<TABLE>
<S> <C> <C> <C>
*By: /s/ R. BRUCE EASTER,
JR.
-------------------------
ATTORNEY-IN-FACT
</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