Identifying Telecom Carriers

A telecom carrier is an entity that provides and bills for phone service. It would be convenient if I could classify a carrier based on the fact that it owns a large fiberoptic network and multimillion-dollar phone switches, but not all of them do.

Some carriers own no hardware and simply contract with other companies that have sophisticated hardware networks. Actually, all carriers have contracts with other carriers to sublet space on their networks. Subletting enables them to build more redundancy into their systems (which is good thing for customers).

In some areas, subcontracting also helps carriers get substantial price breaks when they try to negotiate new contracts to gain entrance into a specific market. In fact, the best way to understand carriers is based on their functions.

Carriers treat local networks, long-distance networks, mobile networks, and more. Local carriers provide local service. If you call from your office to the building next door, your local carrier receives the call and completes it to the other building.

In addition to providing local calling services, local carriers also provide you with dial tone on your residential or simple business phone lines, assign your phone number, provide 911 (emergency service), 411 (information), toll-free service and a host of other features like call waiting, caller ID, and sometimes even voicemail.

One of the most important functions of the local carrier is to identify every call you make as being local, long distance, or toll free, and then to route it to the appropriate carrier to complete. The industry refers to local carriers primarily as local exchange carriers (LECs).

When you think of LECs, names like Bell Atlantic, Bell South, Ameritech, or Verizon come to mind. These are all companies that were lucky enough to be given the limited monopoly to provide local service to a specific geographic area. America was carved up based on local population statistics and state borders when the Ma Bell monopoly got broken up in the 1980s.

LECs are also known by other names. The LECs that were part of the initial monopolies given by the U.S. government and generally have the word Bell in their names are sometimes grouped as RBOCs (pronounced ahrr-boks). An RBOC is a Regional Bell Operating Company. At times, RBOCs are also referred to as ILECs (pronounced eye-leks).

The ILEC designation identifies a carrier as being the senior LEC in the area, specifically, the incumbent local exchange carrier. Throughout this book, I avoid using too much jargon by simply referring to the carrier that supplies your local telecom service as your local carrier.

Long-distance carriers receive and complete calls that terminate outside of the U.S., across a state border, or across a geographically defined border within the state called a LATA (Local Access Transport Area). Long-distance functions were specifically denied to the local carriers during deregulation and spawned the growth of the long-distance industry.

You can break long-distance carriers into two categories:

  • Facilities-based long-distance carriers. The first companies that come to mind when you think of long-distance carriers are AT&T, Sprint, and MCI. These are companies that own huge telecom networks, million-dollar telephony routing switches, and enough cabling to tie us to the moon ten times.

All the equipment and stuff — the hardware and cabling — that these companies own establish these carriers as facilities-based providers. Generally, only large companies worth hundreds of millions of dollars fall into this category, but ever since the long-distance industry was born, the number of facilities-based long-distance carriers has been growing.

  • Switchless resellers. Along with the AT&Ts and MCIs of the U.S. came a new breed of long-distance carrier. These companies don’t own any hardware or network facilities, but simply resell existing services from the larger facilities-based carriers like Sprint or Qwest. So-called switchless resellers sign contracts with large carriers for a specific per-minute rate and then resell the service to companies and residences for a profit.

Wireless communication is a method of transporting a call more than it is a standard division of labor within the telecom world. The wireless industry was born after the telecom industry was deregulated and as a result, the industry enjoys all the benefits of the breakup.

The wireless companies function just as CLECs do, but can also provide long-distance service. Wireless providers have the benefit of much lower start-up costs than other telecom providers, because they simply install hardware to transmit and receive wireless calls where the hardware is needed instead of digging up endless miles of roads to lay down new cabling.

Today, technology has evolved to the point that you can send and receive e-mail and text messages, surf the Internet, and download video — all with your wireless phone. This is the one part of telecom that enables you to have it all in one device.