Incumbent Local Exchange Carrier

What is an incumbent local exchange carrier?

An incumbent local exchange carrier (ILEC) is a telephony service provider that was originally part of the Bell company’s PSTN network monopoly before it split into local exchange carriers (LECs) after the antitrust Telecommunications Act of 1996. 

Major telecom companies in the United States like AT&T, Verizon, and CenturyLink are examples of incumbent LECs. 

How did the United States’ modern telephony system develop? 

To understand local exchange carriers and their types, it’s important to know the history of telephony services in the United States. 

After Alexander Graham Bell invented the telephone, he started the Bell company, which had a monopoly on telecommunication services throughout the country. 

In 1982, an antitrust suit broke Bell (then known as AT&T) into 7 independent local exchange carriers, or LECs. These were regional bell operating companies (RBOCs) that could only serve their specific local areas known as a local access and transport area (LATA). 

In 1996, the Telecommunications Act further strengthened competition in the telecom space by introducing the distinction between incumbent local exchange carriers (ILECs) and competitive local exchange carriers (CLECs). ILECs were the original RBOCs, while additional companies known as CLECs entered the market to introduce more competition. 

By law, ILECs had to lease out their lines and exchanges to these newer CLECs to give them a chance to compete. 

What responsibilities do incumbent local exchange carriers have? 

Much like LECs in general, ILECs must offer: 

• Number portability. The LEC must provide support for users wanting to transfer a phone number to another provider. 
• Dialing parity. Users dial the same number of digits for any call within the LATA, even if the service provider for the parties on both ends of the call are different. 
• Long distance support. LECs support long distance calling by transferring callers to another LEC as specified.  

The Telecommunications Act added some additional responsibilities exclusive to incumbent local exchange carriers. 

• Reselling unbundled services. Any CLEC should be able to purchase unbundled services and network elements from an ILEC individually and resell them in its own custom service package to users. Discounts or bulk pricing are also necessary. 
• Maintenance services. Because a CLEC must borrow equipment from the ILEC, the ILEC is still responsible for the maintenance and easy access of its hardware. 

How do incumbent LECs differ from the competitive ones? 

Because incumbent local exchange carriers were part of the original monopoly, they have direct ownership over the telephone infrastructure. Competitive LECs lease out this equipment and repackage the serve as an alternative for consumers in the region. ILECs are essentially tier 1 suppliers, and CLECs are tier 2. 

Competitive LECs often offer more attractive pricing or include special features like cloud connectivity. However, commercial clients may still find ILECs more ideal for their business communication needs. 

• Direct ownership of the infrastructure means you have more control over the telephony equipment. If any issues arise, the company can get started on fixes immediately instead of going through a middleman. 
• Service coverage is often larger from an ILEC since it’s more well-established in the market and is simply a larger organization. 
• Industry experience is stronger at an ILEC since it had its roots in the original Bell company. 

The introduction of CLECs into the market nonetheless increased competition. Even if you aren’t working with CLECs, their presence alone improves the experience for you since it forces ILECs to offer better services at lower prices. 

What are some examples of incumbent local exchange carriers? 

The largest ILECs in the United States today were regional bell operating companies, parts of the original Bell monopoly broken up by antitrust suits. Those are: 

• AT&T, the American Telephone and Telegraph Company, which remains the world’s largest telecom corporation. 
• Verizon, formed after a merger between Bell Atlantic and GTE. 
• ​​CenturyLink, which recently rebranded as Lumen Technologies. 

Beyond these RBOCs, other incumbent LECs operating in the nation include: 

• Cincinnati Bell, which began operations fairly early though did not feel the impact of the antitrust suit since it had a minor stake in Bell. 
• Claro Puerto Rico, which, as its name suggests, serves local exchanges in Puerto Rico. 
• Consolidated Communications, which was initially the Mattoon Telephone Company. 
• Frontier Communications, specializing in rural areas and smaller communities. 
• Telephone and Data Systems, which began in Wisconsin as a rural phone company. 
• Windstream, which began as a merger between Alltel and Balor. 

Some ILECs do operate outside of the United States. For example, Canada’s original telephone companies are Telus, Bell, Manitoba Telephone Systems, and Aliant. 

What are the benefits of ILECs? 

• Extensive Network Infrastructure: ILECs have wide coverage, providing reliable telecommunications services. 
• High Service Quality: ILECs prioritize network maintenance and upgrades for reliable communication. 
• Broad Service Portfolio: ILECs offer diverse services, including local and long-distance calling, broadband internet, and data services. 
• Regulatory Compliance: ILECs navigate regulations, ensuring stability and compliance with telecommunications requirements. 
• Robust Customer Support: ILECs have dedicated support teams, offering prompt assistance and personalized service to customers. 

How does Sinch work with ILECs? 

As Sinch, we collaborate with ILECs to enhance their communication services. We provide connectivity solutions, assist in the transition to all-IP services, support various call types, offer a large PSTN replacement network, and provide dedicated project management and regional support.