Selecting Local Exchange Carriers & Services

Selecting Local Exchange Carriers & Services


One of the most important decisions a telecommunications manager needs to make with respect to establishing service for their external customers is who will provide the internal local service and what type of service(s) are required.

Local exchange service is still at the heart of most companies’ telecommunications structure. The telephone system has grown up with procedures, interfaces, and is now designed for single ownership. The closed nature of the telephone network brings stability that is difficult to break. Competitors be allowed to connect to the ILEC at any feasible point. In fact, it carves into the heart of a system that was never designed for this kind of openness.


Pre-competitive Local Networks

The lowest unit in the local exchange is known as a wire center. In larger metropolitan areas, several wire centers combine to make up an exchange. An exchange is a telephone serving area that has uniform rates, services, and tariffs.

Exchanges may be combined into an extended area service (EAS) serving area.

Local Access Transport Area (LATA) is the area in which the BOC is permitted to complete toll calls until the regulatory restrictions are lifted.

The purpose of the local tandem is to allow end offices to route traffic through the tandem if they have insufficient traffic to justify direct trunks or if traffic overflows from direct trunks.


Competitive Local Networks

Competitive Local Exchange Carriers (CLECs’) networks are overlaid on the local calling area.


Access to the Local Loop

The trunking network connections are reasonably straightforward. The CLEC central office connects to the exchange network just as an ILEC does.


CLECs can resell ILEC services.

Many CLECs are also in the competitive access provider (CAP) business and have constructed fiber-optic facilities in the metropolitan area. Where direct connection to the end user is possible, many carriers refer to this as a type 1 connection. A type 2 the ILEC collocates in the LEC’s central office and gains access to its cable pairs.

When a CLEC sells service to an ILEC customer, it must first provision the loop, which is done over its own facilities if possible, and if not, over type 2 facilities. A complex form called the local service request (LSR) is used. CLECs required to forecast their requirements for 3 years in advance,


Number Portability

At the heart are eight number databases run by NeuStar, Inc. Under the local number routing architecture, each switch in the country is assigned a 10-digit location routing number (LRN). The first six digits are the NPA and NXX of the switch. Each ported number is correlated in the database with a particular LRN.

On a local call, when the subscriber dials a telephone number, the serving local central office sends a message over the SS7 network to the database to determine which LRN serves the account.

The ILECs generally do not accept a number portability order until the facility is installed, working and tested.


The Main Listed Number Trap

The problem occurs when moving some of your telephone numbers form an ILEC to a CLEC with the intention of retaining few ILEC numbers-perhaps for backup, fax lines, or other purposes. If the numbers are all billed under a pilot number and that number is being ported to a CLEC number, the ILEC may disconnect all of the numbers under that billed number, even though you intend to retain some of them and have not specifically put them on the porting order.


Transition Traps

Before you begin the transition from ILEC to CLEC, meet with the CLEC’s project manager and go over everything you can think of that can go wrong.

  • Agree ahead of time with CLEC who takes responsibility for disconnecting ILEC lines.
  • Inform the CLEC of every toll-free number you have.
  • Check directory assistance after the cutover to be sure your listing hasn’t been lost.
  • Check numbers that you intend to have remain with ILEC to be sure that none of them has been inadvertently ported.
  • Stay in close touch with the CLEC project manager to be certain the transition date is still on schedule.
  • Check the phone bills carefully on both the CLEC and the ILEC after porting.
  • Check the billing carefully to be sure taxes are properly applied.

Customer Service Record Traps

One of the first steps in the porting process is to get a customer service record (CSR) from the ILEC.


Emergency Number Reporting

The public safety answering point (PSAP) has a database known as the automatic number identification/automatic line identifier (ANI/ALI), which associates an address with the calling number.


LEC Selection Considerations

This section discusses some of the criteria you should consider in selecting a LEC.

Network Architecture

Review the company’s network architecture. ILECs are likely to have straight-forward architecture of the type that has existed for decades. CLEC architectures are more open to evaluation. Look for single points-of-failure. Do they reach your premises on fiber optics or on T carrier riding a cable pair leased from the ILEC? How long is the “local loop”?

Service Protection

Most ILECs construct their buildings to National Equipment Building Standards (NEBS), published by Telcordia (formerly Bell Labs). Properly constructed, the building should be invulnerable to most disasters including fire, earthquake, flood, and civil disturbances.

Note however, that many CLECs use switches from manufacturers who lack the track record of well established manufacturers.

ILECs and CLECs alike use RSUs to extend the line side of the network closer to the subscriber.


Disaster Recovery

Under normal conditions service from ILECs and CLECs should be reasonably equivalent, but the differences are likely to be significant during disaster conditions. CLEC customers may be particularly vulnerable in areas that are subject to storm damage.

Every carrier should have a written disaster plan.

CLECs use central office equipment hat is not built on a solid platform such as those produced by Lucent, Nortel, Siemens, and other CO equipment manufacturers.

You can divide your trunks among two or more LECs and improve the chances of surviving a disaster.


Service Offerings

The CLECs probably will not support the full range of services that the ILEC offers.

CLECs are less likely than ILECs to offer point-to-point services such as dedicated private lines, off-premises extensions, frame relay access and the like.

Virtually all CLECs offer long-distance service, something the ILECs can do only after the FcC approves it.


Digital Subscriber Line

DSL is a hot item for ILECs and CLECs alike. If they collocate a DSL access multiplexer (DSLAM) on ILEC premises, then they should have access to the full range of the cable pairs.

Generally, the ILECs combine DSL with a telephone line. CLECs usually lease the high frequency of the cable pair Line Sharing) from the ILEC and do not provide dial tone with it.


Cost Comparisons

It is important to compare for competitive pricing.


Minimum Quantities

ILECs are required by tariff to provide lines in unit quantities, CLECs are not.


Project Management Capabilities

Before changing from an ILEC to a CLEC, review the CLEC’s project management capabilities. The process of changing carriers is a project with a defined set of tasks and procedures. Determine how the CLEC handles this process.


Review the CLEC’s billing procedures.


Customer Service

A good marketing and customer service department can make a big difference in your satisfaction with telephone service.

  • Review the CLEC’s approach to service management.
  • How many people does it have locally and of what job classifications?
  • What provisions does it have for accepting trouble reports 24 hours day, 7 days week?



In the case of CLECs, review the company’s capitalization. At the time the book is written, most CLECs are not profitable.


Contract Terms and Conditions

The ILEC furnishes its services under a tariff with the state utilities commission. In effect, the utilities commission negotiates the terms and conditions on your behalf and the LEC has little or no flexibility in deviating from them.

ILECs often provide service under contracts. They typically provide frame relay and T-1-based dial tone and private line services under a term agreement. This contract is significantly different than a CLEC contract because the service is still provided under tariff.


The CLEC’s contract will provide for cancellation for nonpayment, which is reasonable. You should ensure that they are not permitted to disconnect your services without a clearly defined advance notice.


Service-Level Agreements (SLAs)

With CLECs, however, you should always consider negotiating SLAs. You will find it difficult to measure many of the important criteria, but the CLEC should be able to measure it and provide evidence of how well they are meeting the criteria, at least on the average through their central office with some criteria such as dial tone speed and blockage.

  • Dial tone delay
  • Service availability: 8,760 hours per year equal 99.97 percent availability
  • Transmission quality
  • Percent blockage



From the user’s standpoint, disruption is the most critical
With the ILEC your recourse is through the utilities commission.


Competitive Rates

Ask for a clause that keeps your rates competitive



Your attorney should review the contract and advise you on other protections you may need.


Other Contractual Issues

  • Does the contract require a minimum number of lines?
  • If the service proves to be unsatisfactory, what provisions does the contract make for terminating the agreement?
  • Does the contract have a “technology out” clause?
  • What is the process for resolving disputes?
  • What are your contractual rights if the LEC discontinues the local exchange business or is sold?
  • Does the contract limit in any way your right to interface the service to any other service?
  • Does the contract levy a penalty for cancellation of a pending service order? What is the penalty and under what conditions is it applied?



One of the most important decisions a telecommunications manager needs to make with respect to establishing service to internal customers is who will provide local service and what type of service is required. The days of monopoly local service providers are gone. In the wake of the Telecommunications Act of 1996, the local loop is not open to competition. Nevertheless, it is important to closely investigate new local operators, especially one that do not invest in their own infrastructure, back office and front office systems, but rather act as parasites to the incumbent’s network. Many with this business case have failed, leaving countless subscribers stranded without service.