XO Communications

» see xo.com as it lived, on the wayback machine

~ the obituary ~

In June 2002 I was eighteen and doing most of my internet in cafes, paying by the hour for a machine that belonged to somebody else. XO Communications spent that same month filing for chapter 11 in the United States against roughly $8.5 billion of liabilities. Neither fact has anything to do with the other, and that is the honest position to write this one from. XO sold circuits to american small businesses. There was no consumer version of it and no version outside the country.

The founding date depends on what you are counting. Wikipedia's infobox carries 4 July 1996 in Bellevue, Washington, under the name Nextlink Communications. Forbes dates the venture to 1994 and credits Craig McCaw, who had sold McCaw Cellular to AT&T and was putting the proceeds into wireline and wireless networks built to compete with the incumbent local phone companies. Both are defensible depending on whether you are dating the idea or the corporation, and both are printed here rather than reconciled.

It grew by purchase and it never grew out of the habit. Concentric Network Corporation came in 2000. Allegiance Telecom came in 2004. Each time, the combined thing kept the XO name, so by the point Verizon finally closed on it the legal entity had carried four different names inside twenty years.

~ the case file ~

~ the four names ~

What XO actually sold, in its last decade, was managed IP network service to small and medium-sized enterprises: fiber Ethernet where it had fiber, and Ethernet over Copper where it did not. Where it had neither it bought reach through external network-to-network interface agreements with the traditional carriers and the cable companies. That is an unglamorous business and it is the reason a company can be worth $17 billion and then be worth nothing and then be worth $1.8 billion, all while the circuits underneath it keep carrying traffic without interruption.

~ seventeen billion ~

March 2000 was the top. The chapter 11 petition landed on 17 June 2002 listing approximately $8.7 billion in assets against $8.5 billion in liabilities. Roughly $4.4 billion of that was owed to the companies that had sold XO the equipment in the first place, Cisco and Lucent among them, which was the standard arrangement of the period: the vendor financed the purchase of its own hardware and then discovered it had become a creditor of a company with no revenue to service the loan.

~ icahn ~

Forstmann Little had a reorganization plan and lost $1.5 billion in the process of not completing it. Carl Icahn, holding a large block of XO's bank debt and bonds, opposed that plan and bought his way into the position instead. XO emerged from chapter 11 in January 2003 having shed all but $500 million of $5.3 billion in debt, with Icahn owning more than 80 percent of what was left.

Icahn then held it for fourteen years, which is the part of the story that gets least attention and probably deserves the most. XO did not die in the telecom bust. It went through the bust, got cleaned out, moved its headquarters to Herndon, Virginia, and kept selling circuits to businesses for longer after the bankruptcy than it had existed before it.

~ what verizon bought ~

Verizon announced on 22 February 2016 that it would buy XO's fiber-optic network business for $1.8 billion. The deal took almost a year to clear and completed on 1 February 2017, deepening Verizon's metro fiber density across 45 markets. Service migration ran on much longer than the paperwork did. As of the summer of 2020, all XO services had been moved onto Verizon, which means the brand was still stamped on somebody's invoice more than three years after the company legally stopped existing.

Check the domain over both schemes and only one of them answers. Over plain http, xo.com returns a 301 to verizon.com/business/xo, a page headed "XO Communications is now Verizon" that explains the myXO portal has been decommissioned and replaced by the Verizon Enterprise Center. Over https, xo.com gives nothing at all. An https-only check would have recorded this domain as dead when it is in fact still doing the one job a dead brand's domain has left, which is pointing at whoever bought the customers.

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