XO Communications, Inc. today announced that it has entered into an operating agreement that will allow the company to operate the assets of Allegianc...

XO Communications, Inc. today announced that it has entered into an operating agreement that will allow the company to operate the assets of Allegiance Telecom, Inc. that XO is acquiring until final closing of the acquisition. XO also announced today its new senior management team, including the creation of the new position of chief operating officer.

“We are moving very quickly to integrate the assets of Allegiance Telecom with XO, bringing together the best from both companies in terms of people, network facilities, technology and business processes,” said Carl Grivner, chief executive officer of XO Communications. “With our new senior management team, we can move even faster to put into place what is one of the nation’s largest facilities-based providers of national local telecommunications services to businesses.”

“As one of the nation’s largest facilities-based local services competitors to the regional Bell operating companies, it is critical that we drive maximum efficiency from our operations while ensuring that our products are competitive and our organization is customer-solutions oriented,” said Grivner. “Toward that end, we have created a new role of chief operating officer and named Wayne Rehberger to fill the position.” “As XO’s chief financial officer for the past three years, Wayne has been involved in all aspects of our operations and has played an instrumental role in improving XO’s operational and financial performance,” added Grivner. “In this new position, he will play an even larger role in XO’s transformation, and will be a driving force behind XO’s laser like focus on bringing businesses more choices for their local, national and end-to-end telecommunications needs.”

Matt Harty, previously regional vice president for the northeast region at Allegiance Telecom, will assume the role of president of Commercial Sales for the combined Allegiance-XO sales force. “By combining the best of the two companies’ sales forces, XO has a tremendous opportunity to gain a greater share of the market for business customers,” said Wayne Rehberger, Chief Operating Officer at XO Communications. “Matt Harty, who has done a superb job leading Allegiance’s sales force in one the most competitive regions of the country, will join with Ernie Ortega and Rob Westervelt to lead XO’s sales efforts as we move to compete even more aggressively with the regional Bell operating companies.”

Tom Cady, who was previously president and CEO of SOTAS, will join the company as chief marketing officer. XO has also named Doug Sobieski, previously XO’s vice president for the Pacific region, to lead the company’s national roll out of its Fixed Broadband Wireless services, following successful trials completed in southern California earlier this year.

On February 13, 2004, XO Communications was selected as the winning bidder for Allegiance Telecom, which had filed for financial restructuring under Chapter 11 of the U.S. Bankruptcy Code on May 14, 2003. Under the terms of the purchase agreement, XO agreed to purchase substantially all of the assets of Allegiance Telecom and its subsidiaries except for Allegiance’s customer premises equipment sales and maintenance business, operated under the name of Shared Technologies, its dedicated dial up access services business operated under an agreement with Level 3 Communications, its shared hosting business, and certain other Allegiance assets and operations.

XO expects to complete its acquisition of Allegiance and obtain final state regulatory approvals during the second quarter of 2004.


About Allegiance Telecom
Allegiance Telecom is a facilities-based national local exchange carrier headquartered in Dallas, Texas. Allegiance Telecom is currently pursuing financial restructuring plans under Chapter 11 of the U.S. Bankruptcy Code, as previously announced on May 14, 2003. As a leader in competitive local service for medium and small businesses, Allegiance offers “One source for business telecom” - a complete package of telecommunications services, including local, long distance, international calling, high-speed data transmission and Internet services and a full suite of customer premise communications equipment and service offerings. Allegiance serves 36 major metropolitan areas in the U.S. with its single source provider approach.


About XO Communications
XO Communications is a leading broadband telecommunications services provider offering a complete portfolio of telecommunications services, including: local and long distance voice, Internet access, Virtual Private Networking (VPN), Ethernet, Wavelength, Web Hosting and Integrated voice and data services. XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships in the United States. XO currently offers facilities-based broadband telecommunications services within and between more than 70 markets throughout the United States.

For more information on XO, please visit www.xo.com