The local loop, or last mile, is the stretch of cable that runs from a customer’s premise to a carrier’s point of presence. It’s typically provided by the incumbent phone company that services a given area.
The local phone company, Verizon, AT&T and Qwest (CenturyLink) for example, have agreements with most of their competitors and supply the loop at a pre determined, usually discounted rate. The only companies that don’t utilize the ILEC’s (Incumbent Local Exchange Carrier or phone company) loops are the local cable company and the power company. In some circumstances, if the opportunity is large enough or if the customer is willing to pay for it, a competitive provider can bring in dark fiber and connect to the customer directly, to bypass the phone company.
It would be cost prohibitive for companies to bring their network to every customer they service. Plus, if every carrier brought their own cable to each business they service, no one could see the light of day through the maze of over head cable and the area around office buildings would look more like farm fields than smooth pavement.
ILECs gladly sell local access to their competitors because it’s profitable and doesn’t require the customer support that end-to-end solutions demand. Despite that, their sales reps emphasize to prospects that their competitors will utilize their lines to service them and hint that it could be an issue. They say things like, “one throat to choke”, meanwhile if you’ve ever been tossed around from one phone company employee to another and from one department to the next, you probably wished you could choke about ten throats.
Even on this website, we mention in a provider’s description, under restrictions, when they need to utilize the incumbent’s loop to access a customer. But the practice of reselling local access is what’s made the telecommunications industry so competitive. If every carrier needed to bring their network all the way to a customer’s premise, only the largest companies would see competitive pricing from telecom suppliers.
Who bypasses the phone company’s network entirely? Cable companies and wireless service providers. Cable companies bypass the phone company because they can’t supply their cable TV through the phone company’s wire. Wireless companies created a niche for their services solely by bypassing the phone company’s system. They service companies looking for high bandwidth with limited options.
The main take away from this article is that just because a competitive provider needs to utilize the incumbent carrier’s cable to provide service, it’s not necessarily a bad thing. Local loops have helped increase competition in the telecom industry and bring down the cost of business phone and internet services. Thousands and thousands of businesses utilize voice and data services delivered in this manor without issue, every single day.
So when the sales rep from your local phone company points out that their competitor, who is offering to save you 20 percent or more on your voice and data services, will be utilizing their network to reach your business say, “yeah, yeah” and move forward without a second thought.