RealTime IT News

XO Looks to Fill Void

XO Communications is offering an alternative for competitive carriers wary of negotiating access deals with Baby Bells after last month's seismic shift in telecom regulatory policy.

The facilities-based carrier is providing wholesale local voice, data and Internet service in 36 U.S. markets, including Boston, New York, San Francisco and Washington, D.C.

The offering is aimed at carriers catering to businesses and includes features like call-forwarding, three-way calling, caller ID, directory assistance and voicemail.

Last month, the Bush administration did not appeal a lower court ruling that tossed out regulations forcing Baby Bells -- BellSouth SBC, Qwest , and Verizon -- to provide discounted access to their lines for competitors.

Supporters of the government's decision said it removed heavy-handed government regulation, while detractors like AT&T warned it would curb competition and lead to higher rates for consumers and businesses.

The decision is having a ripple effect throughout the communications industry. XO sees opportunity.

"We have seen an uptick in inquiries since the legal rulings," Chad Couser, an XO spokesman, told internetnews.com "XO has signed several deals with some regional CLECs and are in discussions with some large carriers."

In addition to offering an alternative to the Baby Bells, XO does not require carriers to risk the capital necessary to build out their own facilities-based networks, the company said. XO is only providing wholesale services to support business customers.

"For the service to support residential customers, there are some network modifications that need to be made," Couser said. "But, we are reviewing this option, as well."

XO invested heavily in building out a network in the late 1990s, but faltered during the telecom and Internet downturn eventually filing for Chapter 11 bankruptcy reorganization.

XO emerged from Chapter 11 in January 2003, no longer creaking under its debt load.

And last month the company closed its $322 million acquisition of Allegiance Telecom's assets, expanding its coverage area and its services for small-to-medium sized businesses. The Allegiance deal laid the groundwork for today's move. In all, XO now has more than 900 local Points of Presence .