XO Communications
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| XO Communications | |
|---|---|
| Name | XO Communications |
| Former names | Nextlink Communications |
| Type | Private |
| Industry | Telecommunications |
| Fate | Acquired by Verizon Business |
| Successor | Verizon Business |
| Founded | 1996 |
| Founder | Michael W. Malone |
| Defunct | 2017 (absorbed) |
| Headquarters | Herndon, Virginia, United States |
| Area served | United States |
| Products | Ethernet, MPLS, IP services, data center connectivity, managed services |
XO Communications was an American telecommunications carrier that provided fiber-optic, Ethernet, and IP-based services to business customers across metropolitan and long-haul markets. Originating in the 1990s during the deregulation and rapid expansion of competitive local exchange carriers, the company grew through fiber buildouts, acquisitions, and wholesale agreements before being acquired and integrated into a larger national operator. XO played roles in the development of metropolitan fiber rings, Ethernet over copper deployments, and managed IP services for enterprises, service providers, and government contractors.
History
Founded in 1996 as Nextlink Communications by Michael W. Malone, the company entered a landscape shaped by the Telecommunications Act of 1996, competition among incumbent local exchange carriers such as Bell Atlantic and Verizon Communications, and the broadband boom that produced numerous competitive local exchange carriers (CLECs). Nextlink expanded through regional fiber projects, later rebranding as XO Communications after a series of investments involving private equity firms including TA Associates and American Capital Strategies. The firm pursued metro fiber rings and long-haul builds that paralleled networks by carriers such as Level 3 Communications and Time Warner Telecom. In the 2000s XO acquired assets from entities like Nextcom, and established wholesale transport partnerships with backbone operators exemplified by AT&T and Sprint Corporation. Financial restructuring episodes mirrored consolidation trends in the sector, and in 2017 the company was acquired by Verizon Communications and subsumed into Verizon Business operations.
Services and Products
XO marketed a portfolio aimed at enterprise and wholesale customers including Ethernet services, Private Line, managed IP VPNs based on MPLS, dedicated Internet access, and disaster recovery connectivity. The company offered carrier Ethernet compliant with initiatives from the Metro Ethernet Forum while targeting sectors served by organizations such as Bank of America, JPMorgan Chase, and other financial institutions needing low-latency connectivity. XO provided data center cross-connects and dark fiber products appealing to exchanges like Equinix and colocation providers operating in markets shared with Digital Realty. For retail and wholesale channels XO worked with systems integrators such as Accenture and managed services partners like IBM Global Services to deliver SD-WAN trials and managed routing to customers in verticals including healthcare providers affiliated with Kaiser Permanente and retail chains similar to Walmart.
Network Infrastructure
The company deployed metropolitan fiber rings in major U.S. metros and operated long-haul routes linking markets serviced by national backbone operators including CenturyLink and Cogent Communications. XO’s network architecture incorporated wavelength services, SONET/SDH interconnects, Carrier Ethernet, and MPLS core routing with edge aggregation points colocated in carrier hotels such as 60 Hudson Street and facilities operated by Telehouse. Its fiber footprint intersected with regional fiber owners like Zayo Group and wholesale carriers including Global Crossing (prior to that firm’s acquisition). XO leveraged peering at Internet Exchange Points such as LINX-equivalent U.S. peering sites and engaged in bilateral peering with content networks similar to Akamai Technologies to optimize content delivery. The operator supported network resiliency through route diversity and geographically separated points of presence (PoPs) in major metro data centers.
Corporate Structure and Ownership
Originally privately held with venture funding and strategic investors, XO’s ownership included private equity participation from TA Associates and American Capital Strategies. Corporate governance comprised a board with executives drawn from the telecommunications and finance sectors, and management teams that had previously worked at carriers like MCI and GTE. Over time, capital structure events included debt financing from commercial banks and restructuring consistent with other CLEC-era carriers such as Global Crossing and WorldCom. The ultimate acquisition by Verizon Communications transferred XO’s assets and customer contracts into the Verizon Business unit, aligning with a broader industry consolidation that also involved firms like Frontier Communications and Windstream.
Major Customers and Market Impact
XO served enterprise customers across financial services, healthcare, retail, and technology sectors, and had wholesale relationships with carriers and content delivery networks comparable to Level 3 Communications and CenturyLink. The company’s Ethernet and managed IP offerings influenced competitive pricing and service availability in metropolitan markets, pressuring incumbents such as Verizon Communications and regional providers like Cablevision to expand or enhance fiber and Ethernet portfolios. By providing alternative last-mile and middle-mile solutions, XO contributed to market options for cloud providers and hyperscale datacenter operators similar to Amazon Web Services and Microsoft Azure, indirectly affecting how those providers architected connectivity in U.S. metros.
Regulatory and Legal Issues
XO operated under the regulatory framework established by the Federal Communications Commission and was affected by rulings stemming from the Telecommunications Act of 1996 on interconnection and unbundling, decisions that also impacted carriers like AT&T and Sprint Corporation. The company engaged in regulatory proceedings about access to incumbent facilities and local loops similar to cases involving BellSouth and Qwest Communications International. Litigation and compliance matters typical to telecommunications carriers included intercarrier disputes over billing, access charges, and fiber rights-of-way with municipal authorities and utilities, echoing disputes seen in litigation involving Verizon Communications and municipal franchising authorities. The acquisition by Verizon Communications required regulatory notification and review consistent with merger oversight practices of the Federal Communications Commission and state public utility commissions.