Friday, May 7, 2010

XO Communications Defends $206 Million Broadband Stimulus Bid Against Overbuild Claim 05/07/2010 San Francisco - XO Communications, the competitive telecom provider with a national service footprint, has issued its first response to the claim of 360networks that XO is attempting to overbuild a 360 long haul fiber route with a pending grant application for $206 million in federal broadband stimulus funds.  

Nowhere in the XO statement however, does the company directly acknowledge, nor rebut, the specific overbuild criticisms of 360networks.  Heather B. Gold, the senior regulatory official at XO, earlier this week authorized the release to us, following our inquiries, of the company's first counter claim to a statement released by 360networks last week. 

The privately held 360networks is the second incumbent service provider to publicly and vehemently criticize a Round 2 broadband stimulus application based on documented charges of redundant and unnecessary proposed federal spending.  Famously, in a local dust up which has involved this publication, the privatized former state owned telco on the U.S. Territory of Guam, GTA Teleguam has leveled overbuild charges at competitor IT&E.

Owned by the Canadian construction management firm Ledcor Group of Companies, 360networks posted on its corporate site an "Open Letter to Congress" in which it attacks the funding Round 2 application of XO as intent on overbuilding 360 "along a 2,200 mile path already served by three of the country's leading providers."

XO Holdings, Inc (OTC.BB: XOHO.OB) is controlled by corporate raider / equity investor Carl Ichan.  The company has branded its proposed optical fiber build out across the northern tier of states from Seattle to Chicago, via mostly rail right-of-way as "Northern Lights."  The firm applied under the Comprehensive Community Infrastructure (CCI) category of Broadband Technology Opportunities Program (BTOP) program being administered by the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce.  

We suspect that XO will have a more pointed response following the publication by 360networks of its open letter - congressional petition on Monday, May 10 in 2 leading Capitol Hill news services.

Statement of XO Communications
To those of us in the competitive telecom sector, Ms. Gold is a pioneering figure who served as President of the Association for Local Telecommunications Services (ALTS) in the 1990s.  She helped frame much of the legislative and regulatory fabric which resulted in the Telecom Act of 1996.  

We reprint the statement of XO Holdings, Inc. in full, below, in its first public appearance.  The statement is attributed to Heather B. Gold, Senior Vice President, External Affairs:

"XO Statement Regarding its “Northern Lights” BTOP Application

America is at an economic turning point.  Fifty years ago, the nation took steps to establish critical nationwide infrastructure, building the national highway system, harbors, and power plants.  Now is the time to focus on making investments in today’s critical infrastructure – such as ultra high-speed broadband communications networks – that will drive future growth and job creation for the coming decades.  XO Communications’ Northern Lights project is just that, an investment in critical infrastructure for America's future. 

With the Northern Lights project, XO Communications would use its own funding together with that from the Broadband Technology Opportunities Program (BTOP) program to deploy virtually “future-proof” broadband infrastructure throughout vast areas of America, serving seven states, 37 Congressional Districts, 8.7 million households and more than 582,000 businesses along the northern tier of our nation.

Specifically, Northern Lights would:

Reduce the cost of Internet transmission in some cases by a staggering 95 percent or more; 

Supply broadband at speeds more than 1,000 times faster than has been available in the targeted regions; 

Enable the connection at high-speed of  more than 10,000 schools, libraries, health care facilities, fire departments, and law enforcement agencies to the Internet – connectivity that has rarely been available to them at any price; 

Generate approximately 3,200 jobs and $537 million in new economic activity; 

Make widely available new broadband applications such as telecommuting, secure data storage, rapid emergency response, and telemedicine all of which can dramatically spur economic expansion; and 

Create “on/off” ramps approximately every 45 miles, enabling virtually all local service providers and community anchor institutions along the route to have broadband access at high-speed and low-cost.  

America can no longer afford to lag behind its international competitors in developing critically needed broadband services.  The time to build this is now.  Equally important, every American should have access to this broadband future and the technological innovations that will ensue.  

XO Communications is confident that government and industry will rise to the challenge of deploying high speed broadband to every corner of the United States.  By giving millions of Americans and thousands of businesses access to next-generation broadband infrastructure, Northern Lights is a critical step forward toward a more connected and productive twenty-first century American economy.  

Now that’s the promise for our economic future." 

Correction: We previously and erroneously stated that 360 Networks was still a subsidiary of Ledcor Industries Limited, of British Columbia. Ledcor had founded 360 Networks during the telecom boom era. 360 Networks is today privately held, and not affiliated with Ledcor.

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