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