XO Holdings isn’t ‘holding’ up so well these days. Yesterday the CLEC reported a first-quarter loss of $42.9 million – more than the $20.6 million in losses a year earlier. Ongoing losses, combined with the hiring of an investment bank, make XO look ripe for one of three actions: going private; getting bought by a rival; or filing bankruptcy.

I say that for three reasons.

First, companies don’t hire investment banks unless they need to change something about their business model. XO contracted Morgan Stanley as its “financial advisor” in February.

Second, XO’s stock prices keep dropping – today they’re at 55 cents; yesterday they hit 60 cents. The company has been trading on the Over The Counter Bulletin Board – a place where stocks pretty much go to die – since 2003 (I earlier had written since last October but I had my facts wrong).

Finally, XO is carrying a high debt load and it doesn’t look like refinancing will happen any time soon in this credit-crunched market. The debt comes due in April and July of next year.

On the whole, I’m surprised Carl Icahn has let matters get this bad at XO. Maybe he’s been too focused on cleaning up Motorola. Meanwhile, XO plans to spend another $22 million on capex in 2008. If XO doesn’t spend that money, it fears “it would be difficult to continue to compete against the ever increasing pressures from the regional Bell operating companies.” That’s from its earnings info yesterday.

I’m curious to know what telecom and XO insiders think of the situation. I hear morale at the company is, understandably, in the dumps. (Update: An insider tells me morale actually is high, so I'm getting conflicting information) E-mail me with your thoughts; if I write an article, I’ll keep your name and company confidential.

We now know why Frontline Wireless suddenly closed shop and why the D Block didn’t sell in the FCC’s 700MHz spectrum auction. Turns out, the Public Safety Spectrum Trust (PSST) – the non-profit that holds the D Block licenses but that can’t make any money until there’s a commercial provider operating the bandwidth – attached some pretty incredible conditions to the spectrum.

For starters, the PSST was talking about “negotiable” annual lease payments of $50 million-$55 million. For 10 years. And with no guarantees that public safety or commercial users would ever sign up if Frontline Wireless won the auction, it’s no wonder investors jumped ship.

There were other requirements, too, that made the D Block less and less attractive to equity firms.

The obvious question now is what is the FCC going to do about it? There’s talk of a re-auction of the D Block and something will have to be different the next time around.

But there are better questions the FCC, Congress and the industry should ask themselves. How did this debacle come about? How can it be prevented from recurring? Why are so few companies interested in the D Block? It’s curious to me that a non-profit selected by the FCC also happens to have as its advisor the for-profit company that hoped to serve as the D Block’s MVNO. Frontline Wireless would have been the underlying carrier while Cyren Call – founded by Nextel’s Morgan O’Brien – intended to serve as the reseller whose end users would have been the public safety community.

I know the Inspector General cleared Cyren Call and the PSST of any collusion. But I still am left to wonder why so few entities hold so much power over a critical piece of government – read, the peoples’ – property.

What are the consequences of going green in telecom? I can’t help thinking of Newton’s third law: for every action, there is an equal and opposite reaction. Let me explain ... Remember a few weeks ago, when reports surfaced that the highly touted CFL light bulbs contain mercury? To gain the benefits from those low-energy bulbs, users have to accept an equally negative consequence.

So I’m wondering – how is this principle manifesting itself in telecom? I’ve received many releases this past week – the week leading up to Earth Day – praising the green benefits of broadband, of wireless mesh, of solar power.

Some of those benefits are obvious, as with broadband. For example, USTelecom sent a note yesterday about a new site that discusses broadband benefits such as telecommuting.

As a telecommuter, I can attest that, yes, I put far fewer carbon emissions into the atmosphere because I don’t drive as much as I once did. But, my energy bills are higher because I work from home. This is especially true in summer. Here in Phoenix, you’re supposed to turn up your thermostat a few degrees when you leave the house for an extended period. Well, since that doesn’t happen on a daily basis, my thermostat stays at a steady 78 degrees. So how do the benefits of telecommuting balance with the extra electricity I use? I don’t have the answer...

I am all in favor of green initiatives. It’s way past time the United States took responsibility for its overwhelming contributions to global warming. I just think it’s too easy for people to jump on a bandwagon, get sucked into a trend, and neglect to evaluate the positives and negatives.