EXHIBIT 1
                                                                       ---------


October 23, 2009

Robert Knauss
Chairman
Special Committee of the Board of Directors
XO Holdings, Inc.
13865 Sunrise Valley Drive
Herndon, VA 20171

Dear Bob:

On  September  28, 2009,  the Special  Committee of the Board of Directors of XO
Holdings,  Inc.  ("XO")  announced  that it did not  support  the  offer  by ACF
Industries Holding Corp. ("ACF Holding"),  an entity wholly owned by Carl Icahn,
the  Chairman  and  holder of a  majority  of the  outstanding  shares of XO, to
acquire all of the outstanding shares of XO's common stock which it does not own
for $0.55 net per  share in cash.  ACF  Holding  hereby  increases  its offer to
purchase such shares to an aggregate of $0.80 net per share in cash.  This offer
will expire at 6:00 pm (EST) on Monday, October 26, 2009.

This letter shall not constitute a binding agreement between us and no agreement
shall exist between us regarding  the  foregoing  unless and until we enter into
mutually satisfactory  definitive agreements.  Please do not hesitate to contact
the undersigned at 212-702-4300 with any questions or comments.


                                                  Very truly yours,

                                                  ACF INDUSTRIES HOLDING CORP.


                                                  By: /s/ Keith Cozza
                                                      ---------------
                                                      Name:  Keith Cozza
                                                      Title:  Vice President


cc:  Carl Grivner
     Simone Wu