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Frequently Asked Questions

What is a CLEC? 

Companies in the United States and Canada that provide local telephone service are known as Local Exchange Carriers (LECs), either incumbent or competitive.  The traditional monopoly Carriers are the ILECs while new Carriers are called CLECs (Competitive Local Exchnage Carriers) as of the passage of the 1996 Telecommunications Act in the U.S. or Decision 97-8 of the CRTC in Canada.

Why should I become a CLEC?

There are two basic reasons.   The first is simply that even a small provider can potentially save thousands of dollars every month.  Many consider that reason enough.  The second reason is that as a CLEC you are afforded access to an array of new service products at amazingly low costs.  Products such as ADSL2+ (24/1 Mbs service, bonded 48/2 Mbs), G.SHDSL (1-8 pair bonded symmetrical Ethernet circuits, 5-60 Mbs), T1s, NxT1s (bonded T1s), and Combinations of Voice and Internet T1s and other circuits.  Plus ISDN PRI, Fax/Alarm capible analog circuits, voice T1s, SIP Trunking, Hosted PBX, and VOIP service.

Don't I need to buy expensive telephone switching equipment to become a CLEC?

No.  With the Infinity Switch(TM) service from American Softswitch, you can use relatively inexpensive and highly reliable Cisco Media Gateway equipment to act as your switch.  It will handle SS7 based Inter-Machine trunks from the incumbent (or other provider) as well as provide true ISDN PRI circuits, VOIP gateway services, Internet T1s, and Combination circuits.

Thanks, but don't I need to pay American CLEC a lot of money.

We spread out our fee over 24-36 months so that you can afford to make the decision to become a CLEC without having to finance equipment or make a large lump-sum payment.  Existing providers are often able to fully recover the cost of becoming a CLEC within a year with access to continued savings and products for years thereafter.

What kinds of CLECs are there?
There are two kinds: Facilities-based and Reseller.  Facilities-based means you have physical equipment that is interconnecting with the incumbent phone company's network.  American CLEC helps you become a facilities-based CLEC.  This is the path to the deepest savings. Your CLEC will also have the ability to act as a reseller of ILEC services.

Who can become a CLEC?
There are no restriction on who can become a CLEC.  Most states require financial information as part of the application process.  There are many companies, including quite small companies, which have become CLECs.  We've never yet not been able to get someone through.

We have several CLECs in our area, can't we achieve as much savings by just buying from them?
No.  Traditional CLECs use expensive traditional telephone switching equipment.  Even if they were willing to sell to you at cost, their costs will be substantially higher than your costs.  By focusing on the specific needs of Internet and Voice providers we avoid unnecessary, expensive equipment.  This gives you a competitive edge in the marketplace.

In what areas do I save the most money?
Savings typically comes from these areas:
1.  Replacement of backend phone lines (PRIs or SIP termination)
2.  Replacement of point to point customer T1 lines
3.  Elimination of remote POPs (establish LATA wide service)
4.  Elimination/reductions of backbone T1s & T3s due to network
simplification and possibly moving into the ILEC's Central Office

What about remote POPs?
If you have remote Points of Presence so that you can provide local phone service or point-to-point T1 service, these remote POPs can be consolidated into one central location in each LATA.

What do all these acronyms mean?
CLEC - Competitive Local Exchange Carrier. A new phone company as defined in the 1996 Telecommunications Act and Decision 97-8 of the CRTC in Canada.


CO - Central Office. The ILEC building where call switching equipment is located.


ILEC - Incumbent Local Exchange Carrier, i.e., the traditional local phone company.

ISP - Internet Service Provider


IXC - Interexchange Carrier - a long distance company.

LATA - Local Access and Transport Area.  A local region of telephone service which is typically larger than the

           local calling area.   On average there are four LATAs per state, though this will vary depending upon

           the size and population denisty of your state.

POP - Point of Presence. An ISP term for a place where physical equipment is located.  Remote POPs usually consist of a

         minimal amount of equipment.

Switch - The term for the equipment within a CO that provides dial-tone, listens to your Touch Tones, and routes phone

             calls to where they are going.

Isn't being a CLEC too complicated for most Internet or Voice providers?
Being a CLEC is actually quite easy - not much different than what you do now.  Becoming a CLEC is the problem.  We do all the work for you to become a CLEC.  Most of the work is all one-time only kinds of things that you would never have to do again.  We take you all the way through to operational.

I have term contracts on most of my PRIs, T1s, etc., is that a problem?
Contracts are certainly an issue and will determine in part the pace for you obtaining the maximum savings.  It takes about fifteen months from idea to implementation to become operational as a CLEC.  Most providers have services on a variety of contracts that expire at a various times.   This allows conversion in stages.  One very nice feature of being a CLEC is that there are no term contracts on any of the services you purchase from the ILEC as a CLEC.

How does American CLEC get paid?
We are paid monthly in even payments of $2,500 - $3,500 until paid in full.   Usually the CLEC is operational and either saving your company money or making your company new money before our payments are complete.

Can't I just create this CLEC myself?
Yes, certainly.  But it is a lot of work.  If you take the path we recommend and avoid the additional time and considerable expense of a traditional phone switch, you will find - best case - that you will have spent one to two years of heads down, all day, every day, working hard discovering and implementing what is needed and hoping you didn't make a critical mistake.  We've been down this path many times; you benefit from our experience.

What if I need help after the CLEC is established?
There are some responsibilities that come with running a CLEC.  They include updating your tariff, filing statements with your state public service commissions, filing semi-annual Number Resource Utilization Forms to the FCC, along with calculating, paying, and filing state and federal taxes.  You can also expect to periodically update/negotiate new terms in your Interconnection agreement.  But don't worry, American CLEC is available on a retainer basis to handle all of this for you, plus ongoing help for new circuit conversions and to add new services, collocation, etc.  This ongoing retainer is not required.  It is purely at your option.

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