Verizon Business has deployed one of the first router-to-router 40Gbps (OC-76 circuits carrying live traffic using Juniper Networks high-performance T-series core routers. These fully functional 40Gbps (gigabits per second) interconnections between backbone routers are carrying production Internet traffic between Washington D.C. and Chicago as well as production voice, data and video traffic on Verizon’s multi protocol label switching (MPLS) network between Washington D.C. and New York City.

Read more here

PAETEC Holding Corp. (NASDAQ GS: PAET) announced today that it has signed a definitive agreement to acquire Allworx Corp., a privately held company, in a $25 million all-cash acquisition. Allworx develops, designs, markets, and sells a complete phone and network system. Upon the closing of this acquisition, PAETEC will add a subsidiary with manufacturing, distribution, and software and digital hardware engineering services that are designed to benefit small and medium-sized businesses. The transaction is subject to customary closing conditions and is expected to be completed in October 2007.

With the September 17 announcement that it has signed an agreement to acquire McLeodUSA, PAETEC is expected to enhance its offerings to small and medium-sized business customers. The Allworx portfolio should allow PAETEC to better serve this market. This portfolio includes integrated PBX/Key telephone and network systems and VoIP telephones with a series of advanced communications software options, such as conference calling and call queuing.

“This transaction allows PAETEC to serve one of the growing segments of our business by bringing into our company an innovative technology and product development firm,” said Arunas A. Chesonis, Chairman and Chief Executive Officer of PAETEC. “We’ve long respected the entrepreneurial spirit and culture that the Allworx management team has created, and look forward to working with them and leveraging their expertise to benefit our existing clients. We’re also pleased about the opportunities we’ll have to offer PAETEC’s network services to Allworx’s current customer base.”

“Being a part of PAETEC provides immediate benefits to our employees, our customers and our network of Authorized Resellers,” said George E. Daddis Jr., president and CEO, Allworx Corp. “This will give us the opportunity to offer more small and medium-sized businesses a seamless transition to VoIP, with the support and powerful brand of one of the nation’s leading communications solutions providers behind us.”

“Allworx fits into our strategic vision by providing small and medium-sized businesses with the opportunity to transition from aging PBX and key phone systems to the advanced features and benefits of VoIP technology,” said Jack Baron, Chief Marketing Officer of PAETEC.

Based in East Rochester, N.Y., Allworx primarily uses Value Added Resellers, or VARs, as its sales channel. PAETEC will continue to use VARs, as well as its extensive agent network, to introduce both Allworx services to PAETEC customers and PAETEC services to Allworx customers.

The Allworx line will complement Equipment Solutions, PAETEC’s existing equipment subsidiary. Equipment Solutions targets medium-sized and large businesses and enterprises, and is an authorized reseller of Avaya and Cisco equipment.

About PAETEC
PAETEC (NASDAQ GS: PAET) is personalizing business communications for medium-sized and large businesses, enterprise organizations and institutions across the United States. We offer a comprehensive suite of voice, data, and IP services, as well as enterprise communications management software, network security solutions, CPE, and managed services. For more information, visit www.paetec.com.

About Allworx
Allworx Corp is comprised of two divisions. The Allworx Product division develops award winning, phone & network systems for small-to-medium sized businesses through a network of Authorized Resellers. The product line includes the Allworx 6x, 10x and 24x systems and Allworx 9112 and 9102 phones along with a series of software options. By combining the advanced features of today’s VoIP systems with the key system features SMBs have grown to rely on, Allworx systems are ideal replacements for the millions of aging (TDM) PBX and key phone systems in use today. Allworx Corp’s second division, the Allworx Consulting division, delivers elite software and digital hardware engineering services to both large and small companies who want to enhance and compliment their research and product development capabilities. For more information, visit www.allworxcorp.com.

Forward-Looking Statements
Except for statements that present historical facts, this release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In some cases, you can identify these statements by such forward-looking words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will” and “would,” or similar expressions. These statements, which include PAETEC’s forecasts of financial results, involve known and unknown risks, uncertainties and other factors that may cause the company??A???A???A?s actual operating results, financial position, levels of activity or performance to be materially different from those expressed or implied by such forward-looking statements. Some of these risks, uncertainties and factors are discussed under the caption “Risk Factors” in PAETEC’s 2006 Annual Report on Form 10-K and in PAETEC’s subsequently filed SEC reports. They include, but are not limited to, the following risks, uncertainties and other factors: changes in regulation and the regulatory environment; competition in the markets in which PAETEC operates; the continued availability of necessary network elements from competitors; PAETEC’s ability to manage and expand its business and execute its acquisition strategy, to adapt its product and service offerings to changes in customer preferences, and to convert its existing network to a network with more advanced technology; effects of network failures, systems breaches, natural catastrophes and other service interruptions; and PAETEC’s ability to service its indebtedness and to raise capital in the future. PAETEC disclaims any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Larissa Herda, Chairman, CEO and President of Time Warner Telecom (NASDAQ: TWTC) today advocated policies to promote Ethernet availability for American businesses before the House Subcommittee on Telecommunications and the Internet.

“Enterprise customers want the benefits of Ethernet,” Herda said. “They want the flexibility, simplicity and scalability that this technology provides in enabling them to converge their networks and achieve economies of scale and innovation. What DSL did for residential customers, Ethernet does for enterprises. Ethernet is broadband for businesses and with it, they become more efficient and competitive.”
Herda contends that businesses are denied these benefits because incumbents have no incentive to offer Ethernet as it cannibalizes their huge Frame Relay and ATM businesses.
“The only feasible means of increasing the benefits of Ethernet to businesses is for the FCC to prescribe lower wholesale Ethernet prices charged by the large monopoly incumbents so that competitors, like Time Warner Telecom, can offer these services to locations not reached by their networks,” Herda said.

 Level 3 Communications, Inc. (NASDAQ: LVLT) filed a proposal with the Federal Communications Commission (FCC) suggesting a possible resolution to the special access regulation proceeding currently pending before the FCC. Level 3’s proposed solution would enable the FCC to undertake a comprehensive review of the competitive marketplace and establish new rules to address concerns over current special access services.

Special access services are communications circuits offered by incumbent carriers like AT&T, Verizon and Qwest. Business customers and competitive carriers frequently buy these services to enable voice, data and video communications between customer locations. Even competitive carriers with their own extensive networks frequently purchase special access services to allow them to deliver services to buildings not reached by their networks. As a result, incumbent carriers can dramatically influence the extent of competition within their regions by making it more difficult or expensive to purchase special access services.

Carriers and businesses spend an estimated $16 billion annually on special access services, the vast majority of which is paid to large incumbent carriers. In most instances, special access purchasers do not have a competitive choice for such services, and must purchase from the incumbent carrier because that carrier owns the only facilities serving the customer location. Due to this effective monopoly, Congress and the FCC have regulated prices, terms and conditions for special access services since the passage of the 1996 Telecom Act.

The FCC is currently considering revising those regulations, and both buyers and sellers of special access services have a large stake in the proceeding.

Level 3’s proposal for resolving the issue proposes a two-step “investigate and freeze” approach.

First, the FCC would promptly use its investigative power to initiate a comprehensive examination of competition in the special access market by collecting data from facilities-based competitive carriers. The FCC would ask those carriers, within each area that they compete, to provide information on the buildings where they currently have the ability to provide competitive services over their own networks.

Second, the FCC would impose a “true freeze” on current special access rates while it completes its investigation of special access competition. Under a “true freeze,” special access customers would have the option of extending their current contracts on the same commercial terms as exist today.

“This issue is too important to attempt regulation or deregulation based on incomplete facts,” said John Ryan, assistant chief legal officer of Level 3. “Our proposal is designed to allow the FCC to determine the appropriate level of regulation with full knowledge regarding competition in the special access market. The information that we ask the FCC to collect will allow intelligent and targeted regulation of incumbent carrier special access offerings, eventually permitting incumbent carriers more freedom where competition exists, but restraining uncompetitive pricing, terms and conditions in areas where carriers and customers have no alternative but to purchase services from the incumbent carrier.”
Under Level 3’s proposal, the FCC would determine how to regulate incumbent carriers in areas where the collected data shows little or no competition. While the FCC collects accurate competitive data, Level 3 believes that the FCC should, at a minimum, implement a freeze on incumbent special access rates. Such a freeze would assure that, while competitive information is collected and evaluated, special access market conditions would not worsen.

TelePacific Communications, a leading provider of business telecommunications network solutions, today announced that the company has expanded its service territory to include Reno, Nevada. The expansion means TelePacific now provides service to every major metropolitan area in Nevada and California. “Service and quality go hand-in-hand at TelePacific,” said Dick Jalkut, TelePacific’s president and CEO. “We offer the world-class service that every business should expect from their telecommunications provider.”

The addition of Reno allows TelePacific to provide its personalized services to the Reno market and benefits multi-location customers throughout Nevada and California because they can work with a single provider for all of their telecommunications needs.

This expansion will allow TelePacific to provide Reno business customers with a variety of telecommunications services, including local and long distance voice, Voice over Internet Protocol (VoIP), dedicated Internet access, private networking and data transport services as well as bundled voice and Internet solutions. TelePacific offers superior customer support and strives to exceed customer expectations, treating each customer as if they were TelePacific’s only customer.

XO Communications, a leading provider of 21st century communications for businesses and communications service providers, today announced new additions and enhancements to its IP services portfolio to provide businesses and enterprises with more choices to converge data and voice communications over a single IP network infrastructure.

The new offerings – XO SIP, XO One iPBX and XOptions Flex with XO MPLS IP-VPN – expand the XO IP portfolio to five solutions and strengthen XO’s position as a leading provider of converged networking and IP Telephony solutions for businesses and large enterprises. The XO IP portfolio consists of XOptions Flex, XO SIP, XO One iPBX, XO MPLS IP-VPN and XOptions Flex with MPLS IP-VPN.

“XO is leading the way in helping businesses migrate to converged IP solutions,” said Tom Cady, president of XO Business Services. “With our broad IP services portfolio, XO is well-positioned to help customers simplify the complexity of deploying and managing converged IP networks and take advantage of the efficiencies and increased flexibility of IP telephony.”

XO SIP
XO SIP delivers converged voice and data services to businesses with IP-PBX systems over a single, high-speed connection. Using a single Session Initiation Protocol (SIP)-based facility to manage all traffic between the IP-PBX system, the XO IP network, and the Public Switched Telephone Network, XO SIP provides greater efficiencies by eliminating the need for businesses to maintain multiple access facilities for each service and eliminates the need for bandwidth-consuming protocol conversions, thereby, simplifying the overall deployment and management of customers’ enterprise IP telephony services.

XO SIP is a fully integrated solution designed to support the needs of businesses with the most demanding voice and data applications at single locations or multiple locations nationwide. The service includes a broad range of bandwidth options to maintain optimal network performance. XO SIP features include:
• Unlimited local calling
• Unlimited site to site calling for multi-location customers
• Long distance calling
• Dedicated Internet Access in speeds up to 45 Mbps with Dynamic Bandwidth Allocation
• Optional Voice Compression
• Online Feature Management through the XO Business Center

XO SIP is initially interoperable with Avaya IP Office - a converged voice and data communications system for small and mid-sized companies - and Cisco Call Manager Express with plans for additional IP PBX interoperability in the near future. XO SIP also utilizes the BroadSoft BroadWorks VoIP platform to provide customers additional advanced IP-PBX features, including auto attendant, call center and voice VPN. XO SIP is initially launching in Atlanta, Boston, Dallas, Denver, Philadelphia and San Francisco and will be available nationwide in early 2008.

XO One iPBX
XO has introduced XO One iPBX, its new managed IP-PBX solution that allows customers with single or multiple locations to outsource the deployment and management of their premise-based IP-PBX systems. XO One iPBX, which utilizes the Avaya IP Office and Nortel BCM platforms, combines voice and data networking, equipment and professional services in simple, customizable solution bundles that are managed by XO at the customer’s premise. By enabling businesses to converge voice and data onto a single IP-based network and outsource the deployment and management to XO, XO One iPBX helps businesses access the benefits and features of IP Telephony while lowering their total cost of network ownership by eliminating the expenses of purchasing, maintaining and managing their own voice and data equipment.

XO offers two new XO One iPBX solution bundles:
• XO One iPBX 15 for Small-to-Medium-Sized Businesses: Provides an integrated voice and data solution featuring the Avaya IP Office with dedicated Internet access up to 3 Mbps, unlimited local calling, generous long distance calling, toll free, DID, voicemail, web hosting and additional applications.

XO One iPBX 50 for Enterprises: Provides an integrated voice and data solution featuring the Avaya IP Office, Avaya Communication Manager, or Nortel BCM with dedicated Internet access up to OC-X, virtually unlimited local calling, generous long distance calling, toll free, DID, unified messaging, and additional applications.

XO MPLS IP-VPN and XOptions Flex
Available next month, businesses will be able to combine XO MPLS IP-VPN with XOptions Flex, XO’s industry-leading and award-winning bundled VoIP service, to create a secure, private voice and data networking solution with Class-of-Service capabilities to support mission-critical applications and prioritize network traffic. XOptions Flex with XO MPLS IP-VPN will provide a wide range of access options to connect locations and flexible classes of services to prioritize Internet, intranet, extranet, voice, video and mission-critical business applications – all over a single, high performance application-aware IP network.

Contact us for more information about the newest additions to XO’s portfolio and for a price comparison.

Telarus, Inc., premier telecom master agent has entered into a strategic partnership with BandTel to provide SIP-based services to its growing base of 1,000 sales agents and 2,000 VAR partners. This new relationship will make BandTel the flagship SIP provider in Telarus’ vast buffet of commercial telecom products. “BandTel has proven itself as a leader in the area of SIP,” explained Adam Edwards, president of Telarus, Inc. “As our VAR program grew, so did the demand for SIP products that work in conjunction with the PBX hardware being sold to our customers. We are extremely excited about BandTel and the fact that we can offer their SIP trunking services to our clients without hesitation or reservation. This is their niche, it is what they do.”

Telarus launched its “VAR Program” in 2004 with the goal of creating direct partnerships with telephone and VoIP equipment partners from Cisco, Avaya, Mitel, Nortel, TalkSwitch and others. As these partners, or “VARs”, refer voice and data customers to Telarus, they in turn receive equipment leads.

The VAR Network lead exchange program kicked into high gear in June 2006 and has delivered equipment leads to VARs that have resulted in over $1M of new equipment sales. In recent months, many of the customers who purchased equipment from VARs in the VAR Network have expressed a keen interest in SIP products. “The growth of our reciprocal lead exchange program with VARs depends on our ability to deliver everything their customers need in terms of voice and data service,” added Robert Butler, director of VAR Network. “BandTel fills this need for us and our VAR partners. SIP is their sole focus, not just an alternate product set. This focus will allow us to bring business to BandTel without any trepidation or doubts.”

BandTel is the only SIP Trunking provider that can natively handle extremely high call volumes and provide 99.999% uptime. With its fail-safe architecture, high Quality of Service (QoS) and complete echo cancellation, BandTel ensures complete call integrity and toll-quality VoIP calls worldwide. Its dialing plans are designed for any network and budget, and include both flat rate and minute usage agreements. BandTel’s network also offers location independence and direct IP connections. “SIP is just another example of how Telarus is growing its core product set for commercial telecom customers,” commented Lance Akins, VP of Sales for Telarus. “We created a beach head with single circuit T1s and are moving upstream with full force, adding metro Ethernet and SIP trunking products to our portfolio in the last month. Not only do these products represent more revenue per sale, their complexity helps to minimize churn and extend the life of each account we acquire for our carriers.”

“We look forward to a long and prosperous relationship with BandTel,” concluded Adam Edwards. “As we train our agents how to sell the SIP product and as we make our VARs aware that SIP is available through Telarus, we expect to see great synergies taking shape.”

About Telarus
Telarus is a premier master agency whose goal is to make agents more successful than they can be on their own or with any other master agency. Telarus provides agent tools, automation, and superior support in an atmosphere of cooperation and ethical community. One example of the tools Telarus provides its agents is real-time voice and data price quoting through its patent-pending GeoQuote technology. GeoQuote makes it possible for business shoppers to access instant pricing and availability information for over 30 broadband data and voice service providers which include ACC Business, AireSpring, AT&T, BandTel, Cavalier, Covad, Level3, MegaPath, Network Innovations, NewEdge Networks, Nuvox, PAETEC, One Communications, PowerNet Global, Qwest, TelePacific, Telnes, Time Warner Telecom, UCN, and XO Communications.
Contact us for more information.

About BandTe
l BandTel is a leading worldwide provider of SIP Trunking services. The company is dedicated to ensuring its customers and partners alike have access to the most reliable, end-to-end VoIP service available on the market today. Its N-Plus™ architecture is designed to solve the throughput and redundancy problems on high-capacity SIP-based networks and eliminate any single point of failure. BandTel continues to develop strong partnerships with leading carriers and telecommunications companies such as: Global Crossing, XO Communications, Level 3, Qwest Communications, Verizon Business, and Primus. BandTel is headquartered in Newport Beach, California.

Verizon Business is offering wholesale customers an additional pricing option that provides a detailed breakdown of the rates that are used to calculate the customers’ monthly bills for Verizon Business’ network services.

The new pricing option, Operating Company Number (OCN)-Based Billing, provides rates based on the underlying local exchange carrier (LEC) and geographic region for delivering voice and IP calls over the Verizon Business global network. This enables wholesale customers to better manage costs. 

“Because our wholesale customers come in a range of sophistication and size, we know one size doesn’t fit all when it comes to pricing,” said Jim Tyrrell, vice president of voice product management for Verizon. “OCN-Based Billing better equips our wholesale customers to control costs and pinpoint key markets in which to sell their services.”

This new pricing choice applies to Carrier IP Termination SIP, Carrier IP Termination Transport and SIP Gateway Service long-distance calls; U.S. and non-U.S.-based toll-free calls; traditional long-distance calls; and international calls from the U.S.

With the introduction of OCN-Based Billing, Verizon Business wholesale pricing plans now include a range of options such as Transcend pricing, introduced in November 1995 as the first product to unbundle charges for long-distance transport and local exchange carrier charges; postalized Classic pricing; and Access-Based Billing pricing.

Verizon Business, whose predecessor companies entered the wholesale market in 1985, has supported that market with a wide range of products and services as well as specialized tools that offer choice and flexibility.

Wholesale products are sold by Verizon Partner Solutions and Verizon Business International Partner Solutions.

TelePacific Communications has been named one of Inc. Magazine’s 2007 “Fastest Growing Private Companies in America.” The rankings are based on TelePacific’s impressive 294.5% revenue growth from 2003 through 2006.TelePacific ranked highly on several category lists, including:

• 39 in the Top 100 Companies nationwide by Dollars of Growth;
• 51 in the Top Companies in Telecommunications by Percent of Growth; and
• 67 in the Top Companies in the Los Angeles area by Percent of Growth.

“It is an honor to be recognized for our outstanding growth over the past few years,” said Richard Jalkut, president and CEO of TelePacific. “Since our inception in 1998 we have grown to provide services to more than 75,000 small-and medium-business customers today. We believe all businesses should have access to the quality and variety of telecommunications services normally only available to large companies. We look forward to continuing to grow the company and to continue offering our customers reliable, high-quality services and support.”

TelePacific has expanded through both acquisitions and organic growth, adding new regional call centers, and expanding the markets it serves across California and Nevada to address growing customer demand. The company’s success is attributed to customer satisfaction levels ranking in the 97th percentile, with more than 2,000 customers surveyed each month by Receivable Management Services, an independent firm.

Inc. Magazine’s rankings are based on revenue growth from 2003 through 2006. To be eligible, companies had to be U.S.-based, privately held and independent, with revenue of at least $200,000 in 2003 and $2 million in 2006. More information on the “Fastest Growing Private Companies in America” can be found in the September issue of Inc. and here.

The U.S. Chamber of Commerce’s Business Civic Leadership Center (BCLC) today named PAETEC, headquartered in Fairport, NY, as a finalist for a Corporate Citizenship Award in the category of Corporate Stewardship, Small/Midsize Business.

“The businesses being nominated for the Corporate Stewardship Award are models of business citizenship at its finest,” said U.S. Chamber President and CEO Thomas J. Donohue. “PAETEC has earned this recognition for its dedication and attention to the needs of its customers, investors, employees, and community.”

PAETEC was nominated for a combination of factors that reflect its recent social contributions and economic performance.

The annual Corporate Stewardship Award is a prestigious award that recognizes a company for strong economic performance and a sustained contribution to community and social progress. Four additional companies are honored as finalists in this category this year: Banco Popular North America, ChoicePoint Inc., Greyston Bakery and Symetra Financial.

A committee of prominent Americans, chaired by Harvard University professor Michael Porter, will select the 2007 Corporate Stewardship Award winner. Donohue will announce the winner during a celebration dinner on November 7 at the National Building Museum in Washington, DC. Six hundred business, civic, and government leaders are expected to attend.

BCLC’s mission is to advance the positive role of business in society. The U.S. Chamber of Commerce is the world’s largest business federation representing more than three million businesses and organizations of every size, sector, and region.

“Internet has not been designed for viewing videos” according to Mary Turner from Tiscali in the Financial Times. The British public tv station BBC has received a warning from English broadband carriers that the BBC’s new iPlayer is putting too much strain on their network. The carriers treathen to block iPlayer unless the BBC will start paying for the bandwidth used.

Though streaming videos are not the greatest bandwidth-eaters. According to research by CacheLogic (2007) it is peer-to-peer transfers that are responsible for over 60% of all bandwidth consumption.

http://www.ft.com/cms/s/f3428cd4-48fb-11dc-b326-0000779fd2ac.html

James Q. Crowe (57) , chief executive officer of Level 3 Communications, Inc has to undergo surgery for a most likely benign tumor. Of course we wish him all the best and a lot of strength. James stated:

“During a routine physical examination, my physician discovered a tumor of the pituitary gland. I have been advised that the tumor is almost certainly benign, and that it does not have a negative effect on my ability to conduct my usual business affairs.

“However, if left untreated, this condition could have significant, adverse, long-term health consequences. Therefore, surgical removal is recommended. The procedure is safe and successfully resolves the condition in most cases. In the event surgery is not completely successful, additional treatments are available including medications and radiotherapy.

“I expect to continue my usual business schedule until the surgery, which is anticipated to occur in the last week of August. I plan to resume that schedule after a two to three week recovery period.

“I look forward to a quick recovery and getting back to work. Thank you for your continued support.”

UPDATE:

BROOMFIELD, Colo., August 30, 2007 - Level 3 Communications, Inc. (NASDAQ:LVLT) today issued the following statement concerning the previously announced surgery of its chief executive officer James Q. Crowe.

“Mr. Crowe has undergone his scheduled surgery, which was completed without complications. The tumor was benign. It is anticipated that Mr. Crowe will resume his work schedule following a two to three week recovery period.”

• Revenue of $274.5 million, which represented an 89% increase over second quarter 2006 revenue of $145.6 million;
• Adjusted EBITDA* of $52.5 million, which represented a 109% increase over second quarter 2006 adjusted EBITDA of $25.1 million;
• Net income of $6.0 million compared to a $<5.8> million net loss in second quarter 2006;
• Free cash flow* of $31.5 million, which represented the 18th consecutive quarter in which PAETEC Holding or its predecessor generated positive free cash flow;
• Ended the quarter with a cash balance of $84.5 million;
• An increase of 141% in the number of access line equivalents in service, from 1.10 million as of June 30, 2006 to 2.65 million as of June 30, 2007; and
• Successful completion on July 10, 2007 of amendments to PAETEC’s existing bank credit facility and a $300 million senior note offering priced at the end of the quarter.

PAETEC Holding Corp. (NASDAQ GS: PAET) today announced second quarter 2007 financial and operating results. “Our first full quarter as a publicly traded company is one that we are excited about. PAETEC enjoyed the best financial quarter in our company’s history,” said PAETEC Chairman and CEO Arunas A. Chesonis. “We continued to see significant growth and interest in our data and VoIP product offerings, while also benefiting from the synergies being realized from the US LEC merger.” 
Quarterly Performance
Total revenue for second quarter 2007 increased 89% to $274.5 million from $145.6 million for second quarter 2006, principally due to the addition of US LEC’s results. Adjusted EBITDA for the second quarter 2007 increased 109% to $52.5 million over adjusted EBITDA for the second quarter 2006 of $25.1 million. Adjusted EBITDA margin, which represents adjusted EBITDA as a percentage of total revenue, was 19.1% for the second quarter 2007 compared to an adjusted EBITDA margin of 17.3% for the second quarter 2006. Network operating leverage and merger-related synergies largely accounted for the increase in adjusted EBITDA margins.
Network Services, which accounted for 83% of PAETEC’s second quarter 2007 total revenue, experienced strong growth, increasing 100% year over year to $228 million. US LEC’s operations, PAETEC’s fast growing MPLS VPN product, and its integrated voice and data T1 sales all contributed to the positive results. Carrier Services represented 14% of second quarter 2007 revenues and grew 75% year over year to $37.5 million, largely reflecting the addition of US LEC’s operations as well as solid 19% internal growth. Integrated Services accounted for the remaining 3% of second quarter revenues and experienced an 11% decline year over year. Integrated Services continues to have an annual revenue cycle and tends to provide uneven results on a quarterly basis.

PAETEC ended the second quarter 2007 with 100.9 million common shares outstanding. A fully diluted share count as of the end of the second quarter 2007 also would reflect that the Company had approximately 14.1 million common shares subject to outstanding stock options, 7.5 million common shares represented by outstanding restricted stock units (RSUs), and 2.6 million common shares subject to outstanding warrants, amounting to a total of 24.2 million additional fully diluted common shares. As a result, PAETEC’s fully diluted common share count was approximately 125 million as of June 30, 2007.

“Integration with the former US LEC is proceeding very well, with several milestones - such as the June merger of our respective data networks - occurring faster than anticipated,” said EJ Butler, Jr., chief operating officer for PAETEC. “Our focus now and for the balance of the year is on the integration of systems, back office processes, and employee training. Continued progress should bring the availability of our entire product suite over the combined company footprint during the fourth quarter.”

Capital Expenditures PAETEC continues to invest in the enhancement of its network and product offerings. Capital expenditures for second quarter 2007 increased to $21.0 million, or 8% of total revenue, from $9.8 million, or 7% of total revenue, for second quarter 2006. Capital expenditures increased 26% from the $16.7 million in pro forma combined capital expenditures applied by PAETEC and US LEC in second quarter 2006 (or 7% of total combined revenues). Capital expenditures for second quarter 2007 were associated with investments in the PAETEC network, including expansion in the switching and information technology infrastructure.

As of June 30, 2007, PAETEC’s $50 million revolver remained undrawn and $798 million was outstanding under its credit facility term loan. On July 10, 2007, PAETEC closed on two advantageous financing transactions that did not result in any increase in total debt. PAETEC completed its sale of $300 million 9.5% Senior Notes due 2015 and used the proceeds from this issue to pay down its existing term loan from $798 to $498 million. In conjunction with the paydown, PAETEC amended its existing credit facility to consist of a $50 million revolver and a $500 million term loan.

With these transactions, PAETEC:

• Introduced itself to a new debt investor class-the high yield bond market;
• Layered in long-term debt to better position its balance sheet for growth;
• Reduced its overall cost of capital, with the expectation that its annual interest expense will decrease by approximately $3 million;
• Increased its incremental term loan facility permitted under its bank credit facility from $100 million to $225 million; and
• Obtained debt covenant modifications that provide it with additional operational and financial flexibility.

Full Year 2007 Outlook
“The business continues to track as expected and we remain confident leading into the second half of 2007,” said Keith Wilson, PAETEC’s chief financial officer. “Our EBITDA margin increased significantly year-over-year, and we expect the positive trends to continue. As a result, we are pleased to reaffirm our 2007 guidance.” The table below highlights PAETEC’s revenue, adjusted EBITDA, and capital expenditure expectations on both a reported basis and on the pro forma basis described above, assuming the US LEC merger had occurred on January 1, 2007 instead of February 28, 2007.

Conference Call As previously announced, PAETEC will host a conference call with the investment community today at 8:30 a.m. EDT. Chairman and CEO Arunas Chesonis, Chief Financial Officer Keith Wilson, and Chief Operating Officer EJ Butler, Jr., will be participating. A live webcast and a replay of the call will be available at www.paetec.com.

* Adjusted EBITDA, as defined by PAETEC, represents net income before interest, provision for taxes, depreciation and amortization, change in fair value of Series A convertible redeemable preferred stock conversion rights, stock-based compensation, loss on extinguishment of debt, leveraged recapitalization costs, integration/restructuring costs and, with respect to pro forma adjusted EBITDA, loss related to investment in ETV. Free cash flow, as defined by PAETEC, consists of adjusted EBITDA less capital expenditures (purchases of property and equipment). Neither adjusted EBITDA nor free cash flow is a measurement of financial performance under accounting principles generally accepted in the United States. For additional information as to PAETEC’s reasons for including these measures, for a quantitative reconciliation of the differences between adjusted EBITDA and net loss (income), as net loss (income) is calculated in accordance with generally accepted accounting principles, and for a quantitative reconciliation of free cash flow to net cash provided by (used in) operating activities, as net cash provided by (used in) operating activities is calculated in accordance with generally accepted accounting principles, see the accompanying tables.

• Total Sequential Revenue Grew 1% to $352.9 Million
• Data and IP Services Revenue Up 18%, Core Services Revenue Up 5% Compared to Same Period Last Year
• Total Sales Bookings Up 12% Compared to Same Period Last Year
• Strong Demand for High-Capacity Inter-City Network Transport Services with Number of Orders Up 483% Compared to Same Period Last Year
• Continued Network Investments with Recently Announced 800/Gbps Capacity Upgrade to Meet Current and Future Customer Demand for High-Capacity Services
• Nextlink Expansion to 37 Operating Markets, Creating Nation’s Largest Broadband Fixed Wireless Access Network

RESTON, VA - August 9, 2007 - XO Holdings, Inc. (OTCBB: XOHO.OB) today reported its second quarter 2007 financial and operational results. For the second quarter of 2007, XO Holdings, Inc. (XOH) reported revenue of $352.9 million, $21.8 million of adjusted EBITDA and a net loss of $36.8 million. XOH operates two business segments, XO Communications, LLC (XOC), its nationwide wireline telecommunications business, and Nextlink Wireless, Inc. (Nextlink), its wireless business.

“Overall sales performance in the second quarter was our best in two years, and our strategic network, customer and service initiatives are delivering improved margins and revenue growth in IP-based services for enterprises and wholesale services for carriers and service providers,” said Carl Grivner, XO Holdings’ chief executive officer.

“Revenue from XOptions Flex, our flagship VoIP offering for small and medium-sized businesses, grew for the seventh consecutive quarter. We are also seeing revenue growth for our enterprise-class data and IP services. Our network investments have positioned XO Communications as a new, major player in the long haul network services market with sales orders for these services up significantly. And we have further expanded our broadband wireless capabilities, with Nextlink operating the nation’s largest broadband fixed wireless network.”

“We have good momentum heading into the second half of the year, and our unique combination of metro and nationwide fiber networks and broadband wireless assets positions us well for the long term,” Grivner said.

Service Revenue

(a) Data and IP Services, which are a subset of Core Services, are defined as Collocation, Dedicated Internet Access, Ethernet, MTNS, Private Line, VPN, Carrier VoIP and Commercial VoIP.
(b) Integrated/Voice Services, which are a subset of Core Services, are defined as integrated services and carrier voice services.
(c) Other Services are defined as all small business services, sub- T1 (i.e. dial, DSL), web hosting, interactive voice response and XO One services.

Second Quarter 2007 Financial Results

(1) Gross Margin is a Non-GAAP financial measure. See the discussion below entitled “Non-GAAP Financial Measures.”
(2) Adjusted EBITDA is a Non-GAAP financial measure. See the discussion below entitled “Non-GAAP Financial Measures.”

XO Communications Highlights
• Data and IP Services revenue grew 18% compared to same period last year and 6% compared to previous quarter.
• Number of sales orders for high-capacity inter-city network transport services increased 483% compared to same period last year.
• Revenue from XOptions Flex, the Company’s flagship business VoIP service, grew 131% to $18 million compared with $7.8 million in the same period last year. Surpassed 10,000 XOptions Flex customers in the second quarter 2007.
• Revenue from the Company’s carrier VoIP services, which include VoIP Origination and VoIP Termination, grew 4% to $7.5 million compared to $7.2 million in the same period last year.
• W�holesale network transport business signed with 65 new carrier, content provider and Internet-centric customers in the second quarter 2007. Announced agreements to provide wholesale network services to China Netcom USA, GameRail, NTT America and PCCW Global.
• Continued investments in nationwide network and expanding capacity to an additional 800 Gbps on major coast-to-coast network routes.
• Continued to expand metro Ethernet services footprint through the deployment of Ethernet over copper technology and by leveraging Nextlink broadband wireless capabilities. Signed agreement with Hatteras Networks for deployment of Ethernet over copper technology in 60 major metropolitan markets.

Nextlink Highlights
• Recently announced expansion to 37 markets.
• XO Communications actively selling Nextlink broadband wireless access services in 36 markets.
• Expanded channel partner program to more than 10 regional and nationwide resellers, including XO Communications.

About XO Holdings
XO Holdings, Inc. (OTCBB: XOHO.OB) is the holding company of XO Communications, LLC (XOC) and Nextlink Wireless, Inc. (Nextlink).

• Consolidated revenue grew 19 percent year over year to $547 million.
• Sales order volume for “invest and grow” hit all time high of $4.8 million in May.
• Adjusted cash EBITDA improved to $8 million in the second quarter.
• Company’s cost-cutting initiatives expected to yield close to $40 million per annum savings.

Florham Park, N.J. — Global Crossing (NASDAQ: GLBC) today reported consolidated financial and operational results for the second quarter of 2007.

Summary
The company reported $547 million of consolidated revenue, $266 million of adjusted gross margin and $8 million of adjusted cash EBITDA (non-GAAP metrics that are defined and reconciled below) for the second quarter. The company reduced headcount by 250, resulting in $14 million of severance expenses in the second quarter.

“Through continued sales success and management’s actions in the second quarter, our business is gaining momentum, as reflected in our improved financial performance worldwide,” said John Legere, Global Crossing’s chief executive officer. “The acquisitions of Impsat and Fibernet contributed as we anticipated during the quarter, giving us a glimpse into the full-blown synergies we’ll reap from these key parts of our business as we approach full integration.”

Global Crossing completed its acquisition of Impsat Fiber Networks on May 9, 2007. Integration of the business is proceeding as planned, with synergies of $10 million per annum and one-time costs of $10 million expected. Full integration is expected within 12 to 18 months of the acquisition’s closing. The company maintains its original forecasts for Impsat of $270 million in revenue and $70 million in adjusted cash EBITDA on a run-rate basis once integration is complete.

Through Global Crossing (UK) Telecommunications Limited’s (GCUK’s) acquisition of Fibernet and its metro networks, Global Crossing is now delivering advanced, secure Internet Protocol (IP) solutions to even more midsized multinational companies in the United Kingdom. Integration of Fibernet is substantially complete, and management believes the business is on track to meet originally forecasted net revenue of $80 million and adjusted cash EBITDA of $30 million on a run-rate basis. Integration expenses for the Fibernet business will be lower than the $10 million originally anticipated.

During the second quarter, management reduced the company’s workforce by more than 250 full-time employees and identified various third party costs to be eliminated. These initiatives will generate in-year gross savings of $30 million and net savings of approximately $16 million after severance expenses in 2007. The company incurred $14 million of severance expenses in the second quarter as a result of these headcount reductions ($12 million as part of a restructuring plan). These cost cutting initiatives are expected to generate savings close to $40 million annually, beginning in 2008.

Second Quarter Financial Results
Note: Second quarter 2006 financial results do not include contributions from Fibernet or Impsat. Second quarter 2007 financial results include full contribution from Fibernet and contribution from Impsat beginning May 9, 2007. As the result of the Impsat acquisition, management now operates three business segments: GCUK, GC Impsat and Rest of World (ROW). GC Impsat comprises GC Impsat Holdings I Plc and its subsidiaries (including the Latin American-based business acquired in the Impsat acquisition). Global Crossing’s Latin American subsidiaries owned prior to the Impsat acquisition are currently included in the ROW segment.

Revenue and Margin
During the second quarter of 2007, Global Crossing generated $547 million in revenue on a consolidated basis, representing $86 million or 19 percent year-over-year growth and $43 million or 9 percent sequential growth. GC Impsat contributed $50 million of revenue from May 9, 2007 through the end of the second quarter, most of which was within the company’s core “invest and grow” business — namely its business category focused on serving global enterprises, carrier data and indirect channel customers.

“Invest and grow” revenue was $432 million for the quarter, an increase of $51 million or 13 percent over the first quarter of 2007 and $133 million or 44 percent over the second quarter of 2006. The company’s GCUK segment generated $139 million of “invest and grow” revenue in the second quarter, down $2 million on a sequential basis due to a reduction of equipment sales and incremental billing in the first quarter resulting from a customer settlement. GCUK’s revenue increased 35 percent year over year, aided by Fibernet’s net contribution of $25 million of revenue in the second quarter of 2007. The GC Impsat segment contributed $49 million of revenue to “invest and grow.” ROW generated $247 million of “invest and grow” revenue for the second quarter, an increase of 3 percent or $7 million over the first quarter of 2007 and 26 percent or $51 million over the second quarter of 2006.

“Our sales engine continues to be strong, with monthly recurring order value in our ‘invest and grow’ business hitting a new all-time high of $4.8 million in May,” said Mr. Legere. “Not only does market demand for our solutions continue to be high, but we’re also seeing significant growth in bids and customer wins for converged services.”

Wholesale voice revenue for the second quarter was $114 million, compared with $122 million in the first quarter of 2007 and $160 million in the second quarter of 2006. The company expects this business will remain relatively flat going forward. More than 95 percent of wholesale voice revenue resides in the company’s ROW segment.

The company reported adjusted gross margin at 49 percent of revenue, or $266 million in absolute terms for the consolidated business in the second quarter. This compared with 44 percent or $220 million in the first quarter of 2007 and 38 percent or $175 million in the second quarter of 2006. The “invest and grow” business generated $252 million in adjusted gross margin or 58 percent of revenue, compared to 54 percent or $207 million in the first quarter of 2007 and 52 percent or $155 million in the second quarter of 2006.

Costs
Global Crossing made significant strides in managing its access expenses in the second quarter, resulting in improved adjusted gross margin. Cost of access expense for the second quarter was $281 million, compared with $284 million in the first quarter of 2007 and $286 million in the second quarter of 2006. The reduction in cost of access expense was achieved despite the inclusion of $14 million in cost of access expense for GC Impsat in the second quarter. Cost of revenue — which includes cost of access; technical real estate, network and operations; third party maintenance; and cost of equipment sales — was $430 million in the second quarter, compared with $421 million in the previous quarter and $393 million second quarter of 2006. The sequential increase in cost of revenue expense resulted principally from including GC Impsat’s $14 million of access expense and GC Impsat’s $11 million of “other” cost of revenue expense.

Sales, general and administrative (SG&A) expenses were $128 million in the second quarter, compared with $106 million in the first quarter of 2007 and $85 million in the second quarter of 2006. The company incurred a total of $14 million in severance expense during the second quarter, $12 million of which was recorded as a restructuring charge. In addition, the inclusion of GC Impsat resulted in $16 million in incremental SG&A costs in the quarter after May 9, 2007. Non-cash stock compensation accounted for $19 million in the second quarter, compared with $15 million in the previous quarter and $7 million in the second quarter of 2006. The sequential increase in non-cash stock compensation was primarily attributable to a previously announced motivation and retention bonus for employees.

As noted above, the company expects to generate annual savings of close to $40 million beginning in 2008 through cost reductions identified in the second quarter, with approximately $30 million of gross savings ($16 million of net savings after severance costs) in 2007.

Earnings
Global Crossing reported $8 million of adjusted cash EBITDA for the second quarter, including $14 million in severance expenses. This compared to an adjusted cash EBITDA loss of $8 million in the first quarter of 2007 and an adjusted cash EBITDA loss of $10 million in the second quarter of last year. GCUK contributed $30 million of adjusted cash EBITDA in the second quarter, including $3 million in severance expense, compared to $34 million in the first quarter of 2007 and $22 million in the second quarter of 2006. GC Impsat contributed $9 million of adjusted cash EBITDA in the quarter. ROW incurred an adjusted cash EBITDA loss of $31 million in the second quarter, including $11 million in severance expense, compared to a loss of $42 million in the first quarter of 2007 and a loss of $32 million in the second quarter of 2006.

Consolidated net loss applicable to common shareholders was $101 million for the second quarter, compared with a loss of $121 million in the first quarter and a loss of $77 million in the second quarter of 2006. The company recorded a settlement gain of $27 million as a result of the Impsat acquisition in the second quarter of 2007.

Cash and Liquidity
As of June 30, 2007, Global Crossing had $462 million of unrestricted cash and cash equivalents. In addition, the company held $59 million in restricted cash and cash equivalents. During the quarter, the company used a total of $385 million in connection with the closing of the Impsat acquisition, comprised of $160 million of cash and $225 million in senior unsecured notes. The company also completed a senior secured term loan for gross proceeds of $350 million.

Outside of financing activities and cash used for acquisitions, the company used $85 million of cash during the second quarter. Cash use included $57 million for capital expenditures and principal on capital leases and long-term debt associated with capital expenditures, as well as $30 million for interest on indebtedness. The company also used working capital to continue to reduce days payable with key access vendors, which should facilitate more favorable terms and operational throughput. These cash expenditures were partially offset by $39 million in proceeds from the sale of indefeasible rights of use.

Guidance
The following table represents the company’s 2007 guidance provided on May 10, 2007.

Note:
(1) Cash use guidance and actuals for 2007 do not include cash used for the purchase of Impsat, fees for financing and M&A activities or proceeds from financing activities.

Non-GAAP Metrics
Pursuant to the Securities and Exchange Commission’s (SEC’s) Regulation G, the attached schedules include definitions of Global Crossing’s adjusted cash EBITDA and adjusted gross margin measures, as well as reconciliations of such measures to the most directly comparable financial measures calculated and presented in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP).

Conference Call
The company will hold a conference call on Thursday, August 9, 2007 at 9:00 a.m. EDT to discuss its financial results. The call may be accessed at +1 212 231 6010 or +44 (0) 870 001 3146. Callers are advised to access the call 15 minutes prior to the start time. A Webcast with presentation slides will be available at investors.globalcrossing.com/events.cfm.

A replay of the call will be available on Thursday, August 9, 2007 beginning at 11:00 a.m. EDT and will be accessible until Thursday, August 16, 2007 at 11:00 a.m. EDT. The replay may be accessed by dialing +1 402 977 9140 or +1 800 633 8284 and entering reservation 21346003. Callers in the UK can dial +44 (0) 870 000 3081 or +44 (0) 800 692 0831 and enter reservation number 21346003.

Telarus today announced the launch of a new marketing web site that focuses on businesses looking for Ethernet over Copper (EoC), Ethernet over Serial (DS1), fast (100 mbps) and gigabit (1 gbps) Ethernet broadband availability: ShopforEthernet. The web site, powered by GeoQuote and Google maps, enables the general public to search for lit buildings where broadband carriers have a physical presence. The results are displayed on a dynamically generated map for easy viewing.

“We are very excited about the launch of ShopforEthernet,” commented Adam Edwards, president of Telarus. “Giving the public visibility into the location of telecommunications equipment is a major advance in this industry, which has traditionally kept this information very close to the vest.”
Finding “lit” buildings where Ethernet broadband is available is very important to larger companies with high bandwidth requirements. By plugging in directly to a telecommunications carrier via Ethernet, customers avoid the expensive loop charges assessed by the local phone company.

Speeds up to 10 gigabits per second are possible using Ethernet technology, with plans to increase that to 40 gbps. According to Infonetics Research, the market for managed Ethernet services is expected to grow by 30% per year until 2010, when it will top $25 billion worldwide.
“Ethernet is the future of commercial broadband,” added Lance Akins, VP of Sales for Telarus. “Helping our agents find the buildings where coveted Ethernet services are available is our primary goal. It benefits the users and carriers together, since the cost per meg is lower to the end user, and the margin is much higher for the service provider - all without the local Bell in the middle of the relationship.”
It is anticipated that the information Telarus’ Ethernet lookup tool provides will be of great help for people looking to:
• move into a building with existing carrier facilities.
• substantially upgrade their current broadband connections.
• establish a direct relationship with a provider without the local Bell in the equation.
• find a carrier who provides QoS (Quality of Service) guarantees.
• gather information that will be helpful in the planning stages of broadband deployment for a new real-estate development.
The initial roster of service providers who have supplied the information necessary for inclusion in the GeoQuote Ethernet tool include Cavalier, Telnes, Level3, MegaPath, Time Warner Telecom, and XO Communications. To protect the proprietary and trade secret information provided by these carriers, the GeoQuote Ethernet lookup tool runs in “carrier agnostic mode” on the public ShopforEthernet web site. This means that no carrier Lit Building information is accessible to the general public at any time. However, the authorized Telarus sales agent who ends up working with prospects (who enter their information into the web site) have total access to carrier data. This enables agents to drastically shorten the time it takes to research carrier offerings, not to mention reducing the amount of wasted time carriers spend researching opportunities that just don’t exist.
“It took our team of programmers and research staff a significant amount of time to pull this project together,” commented Andrew Morgan, VP of Web Development. “Judging from the potential attention this tool will surely bring Telarus and the emerging technologies of fast (100 mbps) and gigabit (1 gbps) Ethernet broadband, I’d say the investment will yield huge dividends to our agents and carriers.”
“We believe Ethernet is the future of commercial broadband and are excited to be in a position where we can help our carriers determine where to best spend their build-out dollars, since we’ll know where the demand is” concluded Mr. Edwards.
About Telarus
Telarus is a premier master agency whose goal is to make agents more successful than they can be on their own or with any other master agency. Telarus provides agent tools, automation, and superior support in an atmosphere of cooperation and ethical community. One example of the tools Telarus provides its agents is real-time voice and data price quoting through its patent-pending GeoQuote technology. GeoQuote makes it possible for business shoppers to access instant pricing and availability information for over 30 broadband data and voice service providers which include ACC Business, AireSpring, AT&T, Cavalier, Covad, Level3, MegaPath, Network Innovations, NewEdge Networks, Nuvox, PAETEC, One Communications, PowerNet Global, Qwest, TelePacific, Telnes, Time Warner Telecom, UCN, and XO Communications.
If you are interested in selling Ethernet services through XO, Level3, Telnes, Cavalier, Time Warner Telecom, and more using the GeoQuote Ethernet plotting tool, please contact us for Telarus contact info.

  The number of wordwide fiber broadband connections is growing quickly. Though worldwide the number of fiber connections is only half of the number of cable-tv connections. ADSL is the most common method of delivering broadband.

 However in 2006 alone Fiber broadband connections have reached a global coverage percentage of 23%. A total of almost 300 million broadband lines were counted in this 2007 research.  And (at Q1 2007) 33 mililion of these were fiber based broadband connections.

The content and figures of this post about fiber broadband are based on: link
Use our contact form at the top of the page to enquire about more information or any kind of feedback.

According to the FCC Public notive below some CLEC’s are still fighting Verizon. It looks like this forbearance order slipped the cracks before without any action. Covad, Nuvox and XO are the original filer of the petition.

PUBLIC NOTICE
Federal Communications Commission
445 12th St., S.W.
Washington, D.C. 20554
News Media Information 202 / 418-0500
Internet: http://www.fcc.gov
TTY: 1-888-835-5322
DA 07-3473
Released:  July 30, 2007
WIRELINE COMPETITION BUREAU SEEKS COMMENT ON THE MOTION OF
COVAD COMMUNICATIONS GROUP, NUVOX COMMUNICATIONS, INC., AND XO
COMMUNICATIONS, LLC FOR EXPEDITED ORDER ON VERIZON PETITION FOR
FORBEARANCE
PLEADING CYCLE ESTABLISHED
WC Docket No. 04-440
Comment Date:  August 13, 2007
Reply Comment Date:  August 17, 2007
In this Notice, the Wireline Competition Bureau seeks comment on a petition filed by
Covad Communications Group, NuVox Communications, Inc., and XO Communications, LLC
(jointly, Petitioners) requesting that the Commission issue a written order addressing the Verizon
Telephone Companies’ (Verizon) petition seeking forbearance from certain regulatory
requirements applicable to its provision of broadband services.1 Specifically, Petitioners seek
either a written order denying Verizon any regulatory forbearance for its broadband services, or
an order expressly limiting the grant of forbearance to the particular types of broadband services
and the Title II regulations specified by Verizon in its February 7, 2006 ex parte letter.2 
Petitio