Red Herring reports:

XO Communications has connected its telecommunications facilities to Stealth Communications’ VoIP peering fabric, allowing the carrier to bypass the public telephone network and its termination fees.

Stealth operates a Voice Peering Fabric (VPF), essentially a wide-area Ethernet network that is a kind of private Internet, allowing member carriers to route calls to each other’s subscribers without the calls going through the public telephone network.

For instance, a call from an XO subscriber to an RCN subscriber will never leave the network and will be free to the subscriber making the call.

XO, the largest of the member companies on Stealth’s VPF, will become the main outlet for calls to subscribers of traditional telephone companies, the companies said on Tuesday. Calls from a VPF member carrier to a public network subscriber will be routed through XO, which is one of the largest non-Bell carriers in the United States.

“We can exchange traffic with VPF members, and they can hand off their calls to the public network to us,” said Chad Couser, a spokesperson for XO. “We provide all of the members with the ability to terminate calls on the public switched telephone network.”

Shares of Reston, Virginia-based XO were down $0.03 to $2.60 in recent trading.

Gated Phone Community
The VPF acts as a kind of members-only, gated community that exists within a larger community, which is the public network. XO becomes the controlled outlet for outbound and inbound traffic from the outside.

“This reduces the cost not just for service providers, but large enterprise customers can also reduce their telecom spending by 90 percent,” said Stealth CEO Shrihari Pandit. “We are hooking up stock exchanges and banks to the system this quarter. Peering is a new way to interconnect and acquire voice services.”

Stealth’s ENUM database, a database of telephone numbers mapped to individual IP addresses, now comprises more than 10 million numbers, according to Mr. Pandit. Calls among the 10 million numbers on the network are routed for free. ENUM is not an acronym, but could be a shortened version of the term “electronic number.”

Stealth includes Net2Phone, Packet8, China Telecom, 3U Telecom, Popular Telephony, and TelX among its members and partners.

Stealth, based in New York, is a 10-year-old privately held telecommunications systems provider that locates wide-area Ethernet devices in telecommunications “hotels” across the country and abroad. Telecommunications “hotels” are facilities in most major cities across the globe housing the equipment of large providers.

A company such as Stealth can gain access to many of the major carrier networks by locating its equipment in these hotels.

Nerve Center
Google has reportedly been negotiating space in what many consider the nerve center of this hotel network, at 60 Hudson Street in New York City.

“These buildings are crucial in the telecom world. They allow people to connect to each other,” said Mr. Pandit. “The VPF operates under the same principle. A service provider hooking up to our network in Miami can interconnect to any company on the VPF network worldwide.”

The closed VPF network also allows companies to sell services to members on the network. Separate vendors such as VeriSign provide database and gateway services, in addition to mandated services such as Emergency 911.

“A VoIP company needs services such as directory assistance, caller ID, public interface, 411, etc., and we have these companies within the system providing these services,” said Mr. Pandit.