A competitive local exchange carrier (CLEC) is a US telecom provider that competes with the established local phone company, the incumbent local exchange carrier (ILEC), to provide local phone service and, today, data services such as internet access, Ethernet and SIP trunking. The category grew out of the Telecommunications Act of 1996, which opened local phone markets to competition. A CLEC may build its own fiber and switching, lease parts of the incumbent’s or other carriers’ networks, or combine both.
At a glance
- CLECs compete with incumbent local carriers, such as the regional Bell operating companies and independent telcos.
- They may run their own network, lease facilities from others, or mix the two, depending on the location.
- Many CLECs now focus on business fiber, internet access, Ethernet and SIP trunking rather than copper phone lines.
- The term comes from US telecom regulation; other countries use different terms and rules.
- For buyers, the key questions are whose facilities serve your building and who handles repairs end to end.
What problem it solves
Before local competition, a business usually had one choice for local phone lines: the incumbent phone company. CLECs created alternatives on price, service and technology, and many built fiber networks into business districts that the incumbent had served mainly with copper.
For buyers today, CLECs are often the source of competitive quotes for internet access, Ethernet and voice. They can be regional specialists with deep fiber in a metro area, or national providers that combine their own network with leased access from others. Understanding what a CLEC is, and how it reaches your building, helps you compare quotes that look alike on paper.
How it works
Facilities. A CLEC can serve a location in several ways:
- On its own network, with fiber and equipment it owns into the building (often called on-net).
- Over leased access, using a circuit from the incumbent or another carrier to reach the building, connected to the CLEC’s network (off-net).
- Through resale of another carrier’s service under the CLEC’s own brand and billing, which has become less common.
Rules that once required incumbents to lease parts of their networks to CLECs at regulated rates have narrowed over time, and what is available varies by market and service.
Interconnection. For voice, CLECs exchange calls with incumbents and other telephone carriers through carrier interconnection agreements, so their customers can reach numbers served by other carriers on the public switched telephone network (PSTN). Internet service is a separate arrangement: a CLEC that sells internet access reaches other networks through IP transit and peering, not through its telephone interconnection.
Numbers. CLECs can obtain and assign phone numbers, and customers can usually move numbers between CLECs and incumbents with local number portability (LNP).
Services. Depending on the provider, CLECs sell SIP trunking, dedicated internet access, Ethernet, private lines, hosted voice and, in some markets, analog POTS lines or POTS replacement services.
When it matters for buyers
- When the incumbent’s pricing or service is poor and you want competitive quotes for voice or data.
- When a carrier notice affects copper or legacy lines, and you need an alternative.
- When reviewing a quote from an unfamiliar provider, to understand whether it will be on-net or off-net at your address.
- When repairs take too long because the circuit crosses several carriers.
- When renewing contracts, since CLEC availability at your building may have changed.
Questions to ask vendors
- Is our address on your own network, or will you use another carrier’s access to reach us? Which carrier?
- If access is leased, who owns troubleshooting end to end, and how is repair time measured in the SLA?
- What services do you provide directly, and which do you resell?
- Can you port all of our current numbers, including any toll-free numbers?
- How long have you operated in our market, and what is your network footprint there?
- What happens to our service if the underlying access provider changes its terms or exits?
- What are the term, renewal and early termination terms?
How it differs from an RBOC
A regional Bell operating company (RBOC) is one of the local phone companies formed from the breakup of the Bell System, and is a type of incumbent local exchange carrier. A CLEC is a competitor that entered those markets later. In practice the lines blur: incumbents operate competitive businesses outside their home regions, and some CLECs have grown large through acquisitions. What matters to a buyer is who owns the facilities to your building and who stands behind the service.
To compare competing voice providers, see our SIP trunking solution page.