Is A CLEC (Competitive Local Exchange Carrier) A Good Business Choice?
A CLEC, or a Competitive Local Exchange Carrier, is the phone company’s biggest competition on the telecommunications scene. A CLEC is a local and small company that offers many or all of the same services that the larger company does, just as lower prices under almost any circumstance. Voice data and video services are rendered in the same way the larger company offers with a lower overhead to keep costs down.
CLEC systems are generally just as reliable and just as high quality as the LEC (Local Exchange Carrier) because the CLEC is using the same wiring and the same basic lines that the LEC is offering. In these cases the CLEC has installed identical equipment for the lines of communications, has brought their own and has purchased space from the LEC, or is piggy backing on the LEC’s existing equipment. The mandate of 1966 required that the utility company shared its space with other providers to ensure that landscapes were not needlessly marred and that there was not an over run of cable laying.
The details of a CLEC arrangement with a LEC can be difficult to understand, and the each have their benefits. If a CLEC opts to purchase the space they are basically using the same system and are deriving the same quality of that system. Piggy backing basically allows the CLEC access to the materials and the areas of interest 24 hours a day, 7 days a week.
In the event that the purchasing arrangement offers only remote access, the LEC has to notify and sometimes improve upon, the CLEC in the event of a system upgrade. The CLEC gets all the benefits without the investment, and the customers of the CLEC are happier with their service.
When smaller companies offer lower prices they often win over larger companies. Even when the larger company is assumed to have a broader base and thereby have more reliability, this isn’t always the case. The CLEC simply buys what it needs from the LEC at a wholesale price. This decrease in overhead means that the buyer now has a significant savings from which to decrease their overall price, which works out very well for the little guy.
Approximately just under 20% of all small to medium businesses around the country use a CLEC for their telecommunication services. Many businesses worry about terms of service and reliability when in fact they would be receiving the exact same reliability as they do with the original company. With the same base equipment it is unlikely that a CLEC would fail where a LEC wouldn’t.
The biggest concern of CLEC networks is the potential for fiber optics. Under the current mandate, fiber optic cable are not included in the space sharing arrangement. Thus, CLEC affiliates would have to lay their own fiber optic cable.
Fiber optic cables are not made from copper which the utility is required to share, but are essentially glass, which they are not required to share. Since fiber optics are not as readily available to date, there is no need to be concerned with this angle, and many CLEC companies are already making plans to deal with such a scenario.
