An ILEC, or Incumbent Local Exchange Carrier, refers to a telephone company that provided local service prior to the Telecommunications Act of 1996 in the United States. This act was designed to open up markets to competition, and it distinguished between incumbent carriers (the existing telephone companies) and new entrant carriers.
Key Points about ILECs:
- Origins: ILECs are the original, traditional telephone companies that existed before the deregulation of the telecom market. They have been operating in their respective areas for many years, often for decades.
- Monopoly Hold: Before the Telecommunications Act of 1996, many ILECs held monopolies in their service areas. They were the sole providers of local telephone service.
- Deregulation and Competition: The Telecommunications Act aimed to introduce competition into local phone service markets by allowing other service providers to access ILECs’ infrastructure. This led to the emergence of Competitive Local Exchange Carriers (CLECs).
- Services: While originally focused on providing local telephone service, many ILECs have expanded their offerings over the years to include services like broadband internet, digital television, and cellular service.
- Examples: In the U.S., examples of ILECs include AT&T (in certain regions), Verizon, and CenturyLink, among others. These companies were the original phone service providers in their areas before the market was opened to competition.
- Regulation: Due to their historical dominance and infrastructure ownership, ILECs are subject to certain regulatory obligations to ensure fair competition. For instance, they may be required to lease their infrastructure to CLECs at regulated rates.
In essence, an ILEC represents the established, traditional local phone companies that have been around for a long time. The introduction of competition aimed to reduce prices and improve service offerings for consumers, and today’s telecom landscape features a mix of both ILECs and newer entrant companies.