A competitive local exchange carrier (CLEC) is a North American telecommunications provider classification that emerged based on the competition model of the Telecommunications Act of 1996 in the United States. The act required the previously established incumbent local exchange carrier (ILEC) in each local market to provide infrastructure hosting and services to CLECs to enable competition with the ILEC.

Background

Local exchange carriers (LECs) are characterized as incumbent (ILECs) or competitive (CLECs). The ILECs are usually the original, monopoly LEC in a given area, and receive different regulatory treatment from the newer CLECs. A data local exchange carrier (DLEC) is a CLEC specializing in DSL services by leasing lines from the ILEC and reselling them to Internet service providers (ISPs).

History

CLECs evolved from the competitive access providers (CAPs) that began to offer private line and special access services in competition with the ILECs beginning in 1985. The CAPs (such as Teleport Communications Group (TCG) and Metropolitan Fiber Systems (MFS)) deployed fiber optic systems in the central business districts of the largest U.S. cities (New York, Chicago, Boston, etc.) A number of state public utilities commissions, particularly New York, Other states followed New York's lead so that, by the mid-1990s, most of the large states had authorized local exchange competition.

Growth

The Telecommunications Act of 1996 incorporated the successful results of the state-by-state authorization process by creating a uniform national law to allow local exchange competition. This had the unintended consequence of stimulating the formation of many more CLECs than the markets could bear. The formation of these CLECs, with easy financing from equipment vendors and IPOs, was a significant contributor to the "telecom bubble" of the late 1990s which then turned into the "bust" of 2001–2002. The FCC agreed earlier in the year to rewrite rather than appeal the validity of the rules. In December 2004, the FCC released another set of rules which phase out, over a year, all CLEC leasing of ILEC local switching, while preserving access to most copper local loops and some interoffice facilities.

Proposed termination

In May 2018, USTelecom, the Washington, D.C. trade group for the major telecommunication companies, filed a petition with the FCC, asking it to end the leasing rule within years, which would terminate the CLEC operations of smaller telecommunications companies.

See also

  • Liberalization
  • Deregulation
  • Regional Bell operating company
  • Mobile virtual network operator
  • Local loop unbundling
  • Cable telephony

References