The Phone Company’s Competition

A CLEC is a Competitive Local Exchange Carrier.  Any carrier that is not the incumbent (the local phone company) is considered a CLEC.  CLECs are important because they are an alternative to local phone and cable companies, like AT&T, Verizon, Comcast and Cox, and help keep the telecom industry competitive.  Before CLECs existed, interstate long distance was priced as high as a dollar per minute, phone company install charges were never waived and T1s went for more than $1000 per month.

Here’s a list of items that make CLECs different:

They only sell to business customers:  CLECs, like TW Telecom, Windstream and Integra, concentrate their service delivery to metropolitan areas, in more densely populated business communities.  If you utilize a CLEC internet service, for instance, its performance won’t be affected by the surrounding residential usage.

CLECs don’t advertise:  That’s because they don’t service residential customers and have “feet on the street” – large teams of sales people canvassing business parks.  If you’re operating a business in a larger city, you know about CLECs because their sales reps probably have repeatedly visited your business.

They got their start with integrated T1:  The first services CLECs offered were delivered using T1.  They know integrated T1 technology inside and out.  With the incumbents, it’s a more recent service offering.  If you’re subscribing to T1, you might be better off utilizing a CLEC, especially if the price is lower.

CLECs are primarily sales organizations:  CLECs are sales driven, so they should be more willing to do what’s necessary to make a sale.  Incumbents are more regulated and less flexible.

CLECs are not subject to third party billing or subsidizing residential customers:  Incumbent phone companies act as third party billing agents.  With an incumbent, it’s imperative to scan your phone bills to make sure there are no third party charges present.  Also, Incumbents are required to service everyone in their given service area, no matter how remote, and provide lower cost plans for customers that fall below a certain income level.  The remainder of an Incumbent’s customer base ends up paying more to offset the cost of servicing those two customer categories.

CLECs are more apt to work with your vendors:  CLECs offer referral fees and sales commissions to phone vendors and IT consultants.  If your vendor is earning extra money from the services you’re having installed, they will be more willing to work with the providers to assure the installation goes smoothly.

They are less friendly to the competition:  Incumbents are required to provide Customer Service Records and other service detail to their competition.  They’re also required to provide local access to the businesses they service.  CLECs aren’t subject to such requirements and are less cooperative with their competition.

CLECs are the Incumbent’s largest customers: Some business customers are reluctant to purchase services through a CLEC because they feel that they are just reselling the Incumbent’s network.  That’s partially true.  The Incumbent delivers the local loop or access to the customer’s facility, but from that point on, it’s all CLEC.  If you’re worried that it might take longer to resolve service issues, due to two companies being involved, remember that CLECs do a great deal of business with the Incumbent and have direct access to their back office staff.  They don’t have to go through front-end staff like an Incumbent’s typical customer.

CLECs serve a purpose.  They provide competitively priced telecom solutions to business customers.  They can be more aggressive, nimble and flexible than the larger incumbent carriers.  If your company is shopping for business phone and internet services, it’s a good idea to include a few CLECs on your list of potential vendors.

If you would like help identifying and help with the appropriate CLEC providers in your area, contact CarrierBid today.