XO Holdings today announced a new broadband wireless subsidiary--Nextlink--using the same name XO itself once had, and the same spectrum XO has owned for many years to deliver carrier, large business and government services.

However, the move that carries a strong sense of deja vu also means some entirely new benefits for XO Communications, the company's wireline service provider subsidiary. XO Communications will use Nextlink's fixed wireless technology to deliver business-grade broadband services at speeds ranging from 3 Mb/s to 622 Mb/s.

Nextlink's fixed wireless network will serve as an extension of XO's national IP network, with its IP network connecting to Nextlink wireless hubs, which in turn will be capable of connecting to remote terminals located at customer locations within seven miles of those hubs While expanding the reach of XO's network and bandwidth capabilities, the addition of wireless access also will help reduce local network access costs associated with serving customers by bypassing incumbent telephone companies. Tom Cady, president f XO's new Nextlink unit, told Telephony that will be particularly important as the regulatory environment continues to change.

"It's the right time and the right situation for us to put this spectrum to work in this manner," he said. Carl Grivner, CEO of XO Holdings, added in a statement, "For XO, broadband wireless will be an extension of our national, facilities-based IP network, allowing us to serve virtually any customer within visible range of each wireless hub and help reduce the local access costs we typically pay to local incumbents."

XO Communications will begin offering the new wireless services during the second quarter of this year in Dallas, Los Angeles, Miami, San Diego, Tampa and Washington, D.C., with the launch of these markets by Nextlink. XO will expand service availability in additional markets as Nextlink builds out its wireless network infrastructure, which Cady said Nextlink will expand to 75 markets over the next 18-24 months.

The new Nextlink actually will pursue a three-pronged broadband wireless service strategy that will reach into those 75 major markets in the U.S. to deliver wireless backhaul capacity, business services to large enterprises and alternative ingress/egress communications capabilities to government facilities.

In doing so, its two biggest weapons will be the two assets that have been collecting dust on a shelf for the last six years: LMDS spectrum licenses in the range of 28 Ghz to 31 Ghz for those 75 markets, and a company name that started with the founding of Nextlink Communications by Craig McCaw in the 1990s, but was retired in 2000 when the company changed its name to XO Communications as part of a strategic redirection. Perhaps surprisingly, XO Holdings was able to hold onto both of the assets for more than a half decade characterized first by a savage industry downturn and more recently by cautious growth and an emerging wave of mergers and acquisitions.

Nextlink plans to focus intently, though not exclusively, “on the middle mile, as opposed to the last mile,” Cady said. The provider enters the backhaul market at a time when broadband wireless options already account for much of the backhaul applications in Europe, while the potential to use them in the U.S. is beginning to emerge.

Cady pointed to 3G data and content trends as a primary driver for a heightened need for more backhaul capacity than mobile carriers currently can get from T-1s. Industry evidence backs up that reasoning--Cingular Wireless reported in its first quarter earnings last week that overall average revenue per user fell, but data ARPU increased by more than 40%.

The backhaul market is tightly competitive, with traditional wireline carriers and vendor improving their existing T-1 options, and other wireless providers vying to replace them.

Cady claimed Nextlink will have an edge not only with the quantity of its spectrum-- an average of 1 Ghz of spectrum in each of its 75 markets, but also with its potential to work with corporate parent XO to package wireless and wireline links.