Local Exchange Carrier

What are local exchange carriers?

A Local Exchange Carrier (LEC) is a telecommunications provider serving a specific local area, referred to as a local access and transport area (LATA). 

The term, specific to the United States, arose after antitrust regulations broke the Bell system up into LECs. These carriers could only handle local calls and could not operate long distance traffic, as a result. 

How did LECs arise? 

The telephony industry has seen various changes over time, from new mergers and acquisitions to new technologies changing how consumers use telephony services. 

Alexander Graham Bell, well-known today as the inventor of the telephone back in 1876, began his Bell company which later evolved into AT&T. This company had a monopoly on telecommunications, providing both long distance support and regional local exchanges. 

An antitrust suit in 1982 broke AT&T up into 7 independent LECs known as Regional Bell Operating Companies (RBOCs), or “Baby Bells.” 

How do local exchange carriers function? 

The Telecommunications Act of 1996 further advanced the development of modern local exchange carriers by drawing a distinction between Incumbent Local Exchange Carriers (ILECs) and Competitive Local Exchange Carriers (​​CLECs). 

ILECs had monopolies in their local areas when the Telecommunications Act passed, though the law also introduced new companies known as CLECs to the market. Existing carriers had to allow these smaller carriers to access their lines and exchanges to foster competition. 

The majority of LECs are under management of Regional Bell Operating Companies, though independent operators have control in some areas in the country. 

A local exchange is the central office of a LEC handling call traffic for a specific local area. It provides service for local homes and businesses. 

What are the roles of a local exchange carrier? 

A LEC offers telephony users the following functionalities. 

• Number portability. Users can transfer a phone number to another provider with the assistance and technical support of the LEC. The telephone commission guarantees this right to end users. 
• Dialing parity. Users operating within the region of a LEC’s control dial the same number of digits for every call, even if the telecommunications service provider of the caller or the called individual are different. 
• Resale of services. LECs must allow users to resell telecommunications services and must not interfere or impose restrictions on such transactions. 
• Reciprocal compensation. If a carrier terminates a telecommunications call originating from another carrier, the first carrier pays compensation to the other. 

All users of a LEC’s services may expect legal compliance with all laws, standards, and policies. LECs generally must avoid discriminatory practices against competing providers and help foster a competitive marketplace for telecommunications. 

Should businesses continue to work with LECs? 

Many consider traditional telephony to be on the way out thanks to the proliferation of cellular networks. However, businesses still have many reasons to continue supporting landline calling. 

• Landline calls continue functioning even during Internet or power outages. 
• Landlines are not susceptible to cybersecurity vulnerabilities. 
• The infrastructure LECs provide is pre-existing already. 
• Most employees, customers, and business partners are already familiar with traditional telephony. 

While we’re seeing fewer landlines in homes, businesses should still look to support landline communications. 

How do interexchange carriers (IXC) compare with LECs? 

The United States supports two landline telephone services, the local exchange carrier and the interexchange carrier (IXC). 

LECs handle local calling, while interchange deals with long distance communication. A call is local if it originates and terminates within the same local access and transport area. A LEC may assist with connecting long distance calls originating or terminating within its area of control. 

An IXC essentially connects multiple local exchange carriers and their local access and transport areas together. It manages the switching equipment at LEC facilities to allow long distance calls across the IXC network. The access point for IXC services at every LEC is known as a point-of-presence. 

What are the benefits of LECs? 

LECs offer several benefits for customers who need reliable and affordable communication services. Some of these benefits are: 

• LECs can provide lower rates for local calls than IXCs, as they do not have to pay access fees or tariffs to other carriers. 
• LECs can offer a variety of services, such as voice, data, internet, video, and wireless, depending on their capabilities and customer demand. 
• LECs can leverage their existing infrastructure and customer base to innovate and compete with other providers, such as cable companies or VoIP providers. 
• LECs can ensure quality of service and network security for their customers, as they have more control over their own network and equipment. 

How does Sinch work with LECs? 

Sinch works with LECs to provide seamless communication solutions for businesses and individuals around the world. Sinch partners with LECs to access their network and offer services such as voice, SMS, video, chat, and verification. Sinch also helps LECs to monetize their network assets and increase their revenue by enabling them to offer new services and features to their customers. Sinch’s cloud-based platform allows LECs to easily integrate with Sinch’s APIs and SDKs, and leverage Sinch’s global reach and scalability.