VON: Broadwing, XO merger rumored

BOSTON--Rumors that competitive service providers Broadwing Communications and XO Communications are about to announce a merger are whistling through the VON trade show.

A spokeswoman for Broadwing said the company does not comment on rumors, and an XO spokesman also declined to address the rumors.

According to multiple sources, however, the two sides have been talking about a merger and are on the verge of finalizing a deal.

While consolidation within the competitive service provider industry has become commonplace and rumors of further mergers are frequent, the Broadwing/XO hookup has many puzzled.

Both companies have been through their share of financial and competitive problems. XO was purchased out of bankruptcy by financier Carl Icahn and almost sold him its national landline business for $700 million last November, but the deal was opposed by some shareholders and eventually fell through. Broadwing’s complicated financial history includes being acquired by its major equipment provider, Corvis, for $91 million in 2003. Corvis founder David Huber stepped down as the company’s CEO earlier this year.