PAETEC Holding Corp.
PAETEC Holding Corp. was a United States telecommunications company serving business and institutional customers with voice, data, Internet, and related communications services.
Last updated August 31, 2026
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Overview
PAETEC Holding Corp. was a telecommunications company headquartered in Perinton, New York, and focused primarily on business and institutional communications. The company originated in 1998 as PaeTec Communications, Inc., a privately held venture founded by Arunas A. Chesonis. Its name was formed from the initials of the first names of Chesonis's wife, Pam, and their four children, Adam, Erik, Tessa, and Emma. PAETEC operated in the United States and supplied communications services to medium-sized and large businesses, colleges and universities, hospitals, hotels, government organizations, and other institutions. Its portfolio included local and long-distance voice services, data connectivity, Internet services, and software applications. Rather than positioning itself primarily as a consumer telephone provider, the company built its identity around managed and enterprise telecommunications for organizations with more complex communications requirements. The company's growth relied substantially on acquisitions. It purchased CAMPUSLINK Communications Systems in 1999, Covista North East Call Zone in 2004, and American Long Lines in 2005. A major turning point came in February 2007, when it acquired US LEC, a telecommunications provider based in Charlotte, North Carolina. The transaction resulted in the creation of the publicly traded PAETEC Holding Corp. The merged company subsequently expanded through additional acquisitions, including Allworx, McLeodUSA, Cavalier Telephone Corporation, the Leap RevChain subsidiary of FTS Ltd., and XETA Technologies. PAETEC also developed a visible presence in the Rochester, New York, region. It held naming rights for PAETEC Park, a soccer-specific stadium, from the stadium's opening in 2006 until 2008. In 2007, the company and New York Governor Eliot Spitzer announced plans connected with the redevelopment of Rochester's Midtown Plaza and the construction of a new corporate headquarters, although those plans were later canceled. PAETEC additionally sponsored the Rochester Institute of Technology's Imagine RIT innovation and creativity festival in 2008. The company remained independent only briefly after completing its acquisition program. Windstream Communications acquired PAETEC in December 2011, ending PAETEC's existence as an independent publicly traded telecommunications company. Its operations and assets were absorbed into Windstream. The PAETEC name is therefore primarily of historical significance as the brand of a regional and enterprise-focused telecommunications group that grew through consolidation during the 2000s. Reference material also records controversy involving the use of PAETEC-associated VoIP services by telephone scammers; the available material does not establish that PAETEC itself participated in those scams.
History
PAETEC began in 1998 as PaeTec Communications, Inc., a privately held telecommunications company founded by Arunas A. Chesonis. The unusual spelling of PaeTec was derived from the initials of Chesonis's wife and four children. From its inception, the company concentrated on communications services for business and institutional users rather than building a mass consumer brand. Its service scope included local and long-distance voice calling, data and Internet services, and software applications. PAETEC's customers included medium and large businesses as well as colleges and universities, hospitals, hotels, government organizations, and other institutions within its service area. This focus gave the company a role in the consolidation of U.S. business telecommunications providers during the late 1990s and 2000s. PAETEC expanded through a series of acquisitions. In September 1999 it purchased CAMPUSLINK Communications Systems, a privately owned telecommunications company based in Ann Arbor, Michigan. In August 2004 it acquired Covista North East Call Zone, also associated with the Total Tel name. In January 2005 it purchased American Long Lines. These transactions broadened its customer base and network footprint before the company's most consequential deal. On February 28, 2007, PAETEC acquired US LEC, a telecommunications company headquartered in Charlotte, North Carolina. The combination transformed the private company into PAETEC Holding Corp., a publicly traded telecommunications group. The company continued its acquisition-led expansion by acquiring Allworx in October 2007 and McLeodUSA in February 2008. In December 2010, it acquired Cavalier Telephone Corporation and the Leap RevChain subsidiary of FTS Ltd. In May 2011, it acquired XETA Technologies. The company also pursued regional visibility and civic engagement in the Rochester area. PAETEC owned naming rights to PAETEC Park, a soccer-specific stadium near Rochester, from its opening in 2006 through 2008. In October 2007, Chesonis and Governor Eliot Spitzer announced a plan involving the removal of Rochester's Midtown Plaza and development of a new PAETEC corporate headquarters. That project did not proceed. In May 2008, PAETEC sponsored the Rochester Institute of Technology's Imagine RIT: Innovation and Creativity Festival. PAETEC's independent corporate history ended in December 2011, when Windstream Communications acquired the company. The acquisition followed a period in which PAETEC had assembled a broad telecommunications platform through mergers and purchases. After the transaction, PAETEC was no longer an independent public company. The brand's history consequently reflects both the growth of enterprise telecommunications services and the sector's broader consolidation. Reference material also records controversy concerning the listing of PAETEC or STARNET PAETEC as a provider of VoIP services used by telephone scammers. This is a reputational and compliance-related issue in the historical record, but the supplied material does not provide enough detail to attribute the fraudulent conduct to PAETEC itself.
- 2011
XETA Technologies acquisition
[1]PAETEC acquired XETA Technologies, Inc.
- 2011
Windstream acquisition
[1]Windstream Communications acquired PAETEC, ending its independent corporate existence.
- 2010
Cavalier Telephone acquisition
[1]PAETEC acquired Cavalier Telephone Corporation.
- 2010
Leap RevChain acquisition
[1]PAETEC acquired Leap RevChain, a subsidiary of FTS Ltd.
- 2008
McLeodUSA acquisition
[1]PAETEC acquired McLeodUSA as part of its continued telecommunications expansion.
- 2007
US LEC acquisition creates PAETEC Holding Corp.
[1]PAETEC acquired US LEC and became a publicly traded holding company.
- 2007
Allworx acquisition
[1]PAETEC acquired Allworx Corp., extending its communications technology portfolio.
- 2006
PAETEC Park naming rights begin
[1]PAETEC held naming rights for a soccer-specific stadium near Rochester beginning with the venue's opening.
- 2005
American Long Lines acquisition
[1]PAETEC acquired privately owned telecommunications provider American Long Lines.
- 2004
Covista North East Call Zone acquisition
[1]The company acquired Covista North East Call Zone, also operating under the Total Tel name.
Products and positioning
A United States business telecommunications provider serving medium-sized and large organizations, including educational, healthcare, hospitality, government, and other institutional customers.
Telecommunications
Business voice services
PAETEC provided local and long-distance voice services for business and institutional customers. These offerings formed part of its broader enterprise communications portfolio and were marketed to organizations such as companies, hospitals, educational institutions, hotels, and government bodies.
Connectivity
Data and Internet services
Data connectivity and Internet services supported the networking needs of PAETEC's enterprise and institutional customer base. The services complemented its voice portfolio and helped position the company as a broader business communications provider rather than a single-service telephone carrier.
Communications software
Software applications
PAETEC's stated service portfolio included software applications alongside voice, data, and Internet services. The available reference material does not identify individual application names, so this entry describes the category without attributing specific products.
Controversies
PAETEC-associated VoIP services cited in telephone-scam controversy
Reference material states that PAETEC, also known as STARNET PAETEC, was listed several times as a provider of VoIP services used by telephone scammers. The supplied information does not establish that PAETEC itself organized or carried out the scams.
Marketing campaigns
- 2008Imagine RIT sponsorship
Rochester, New York region
PAETEC sponsored the Rochester Institute of Technology's Imagine RIT: Innovation and Creativity Festival, associating the company with regional technology, creativity, and education.
Outcome. The sponsorship was recorded for the festival held on May 3, 2008.
- 2006PAETEC Park naming-rights sponsorship
Rochester, New York region
PAETEC attached its name to a soccer-specific stadium near Rochester, giving the telecommunications company a prominent local brand presence.
Outcome. The naming-rights arrangement ran from the stadium's opening in 2006 through 2008.
Brand decisions
2011
Accept Windstream acquisitionM&ABackground
After a period of expansion through telecommunications acquisitions, PAETEC became part of a larger communications group.
Action taken
Windstream Communications acquired PAETEC on December 1, 2011.
Aftermath
PAETEC ceased to operate as an independent publicly traded company and its operations were absorbed by Windstream.
2007
Acquire US LEC and form the public PAETEC Holding Corp.M&ABackground
PAETEC was seeking to expand its telecommunications platform and customer base through consolidation.
Action taken
The company acquired Charlotte-based US LEC on February 28, 2007, and became the publicly traded PAETEC Holding Corp.
Aftermath
The transaction was followed by additional acquisitions, including Allworx, McLeodUSA, Cavalier Telephone, Leap RevChain, and XETA Technologies.
2007
Plan a new Rochester corporate headquartersStrategyBackground
PAETEC and state officials proposed a redevelopment project connected with Rochester's Midtown Plaza.
Action taken
The company announced plans to tear down Midtown Plaza and build a new corporate headquarters.
Aftermath
The announced headquarters plans were later canceled.
Recent events
- 2011
PAETEC is acquired by Windstream Communications[1]
M&A
Windstream Communications acquired PAETEC, ending PAETEC's independent corporate and public-market existence.
- 2007
PAETEC acquires US LEC and becomes a publicly traded company[1]
M&A · Leadership change
PAETEC acquired US LEC, a Charlotte-based telecommunications company. The transaction created the publicly traded PAETEC Holding Corp. and marked a major expansion of the company's operating platform.
- 2007
PAETEC announces planned Rochester headquarters redevelopment[1]
Other
PAETEC and New York Governor Eliot Spitzer announced plans involving the demolition of Rochester's Midtown Plaza and construction of a new corporate headquarters. The plans were subsequently canceled.
Sources1 sources
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