Competitive Local Exchange Carriers (CLEC) are telecommunication providers that compete with the larger incumbent local exchange carriers (ILEC), sometimes referred to as the Phone Company. A CLEC utilizes the ILEC’s local loop to deliver their services. Typically, they offer services that are priced below the ILEC’s.  TW Telecom, XO, Integra and Level 3 are CLEC’s.  AT&T, Verizon and CenturyLink are LEC’s.

CLEC limitations:

• Limited service area
• Can’t provide end to end solutions leading to potential finger pointing
• Regional providers – unable to offer services nationwide
• Unable to provide the suite of services that ILECs possess
• Limited experience servicing the enterprise customer

CLEC strengths:

• Pricing
• More experienced in integrated T1 technology
• Typically more responsive and flexible than ILECs
• Not tariffed – offer more pricing flexibility
• Typically ILEC’s largest customers – possess the buying power to resolve carrier issues quickly
• More “hands on” with installations – conduct site surveys, work directly with a customer’s vendors

Ways to reduce the risk of working with a CLEC:

• Work through an agent that has experience working with the CLEC
• Move a limited amount of business, like a few Internet T1’s or PRI’s, to the CLEC and gradually move more services as confidence grows
• Use CLEC for redundancy
• Use CLEC for less critical services

Ways to maximize the effectiveness of CLECs:

• Include CLECs in RFQs, to offer a benchmark and to keep the ILECs honest
• To diversify your portfolio of services, for bargaining power and as a safeguard against ILEC misconduct
• As a way to compare service levels

CLECs should be part of every company’s telecommunication portfolio. Working through an agent will facilitate the use of CLECs and should help prevent potential pitfalls.

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