Difference Between ILEC and CLEC

In the telecommunications business, the terms "ILEC" (incumbent local exchange carrier) and "CLEC" (competitive local exchange carrier) refer to two types of companies that provide local phone service.

Traditional local phone companies that were created before 1996 and keep exclusive rights to provide local phone service are known as ILECs. CLECs are newer companies that entered the market after 1996 and compete with ILECs by leasing physical infrastructure in order to provide phone service to their own consumers.

Read this article to find out more about ILEC and CLEC and how they are different from each other.

What is ILEC?

The term ILEC refers to traditional local telephone companies that existed before the Telecommunications Act of 1996. These companies were given exclusive rights to provide local phone service in their service areas, and they were frequently monopolies in their territories.

ILECs often control the physical infrastructure that transports phone calls, such as copper or fibre-optic lines, and use this infrastructure to provide local phone service to subscribers. In many situations, they also provide other services such as long-distance calling, the internet, and television.

ILECs have been in existence for decades and have become the primary providers of local phone service in many locations. They have made significant investments in the physical infrastructure required to deliver dependable phone service to its consumers.

The necessity to adapt to constantly changing technologies and consumer preferences is one of the issues that ILECs face. As demand for mobile and internet-based communication services has increased, ILECs must modify their offerings in order to stay competitive. They have also faced growing competition from newer companies known as CLECs, which lease physical infrastructure from ILECs in order to provide their own phone services.

What is CLEC?

CLECs typically do not own the physical infrastructure required to provide local phone service, such as copper or fiber optic lines. Instead, they lease these lines from ILECs and use them to provide phone service to their own customers. In some cases, CLECs may also use newer technologies, like Voice over Internet Protocol (VoIP), to deliver phone service.

CLECs compete with ILECs by lowering their pricing, providing better customer service, and introducing new features. They have increased competition and choice in the local phone service industry, resulting in cheaper pricing and better services for consumers.

The expense of leasing infrastructure from ILECs is one of the issues that CLECs encounter. Because CLECs do not own the physical infrastructure, they must pay ILECs fees to use their lines, making it difficult for CLECs to offer competitive prices. In addition, because ILECs have historically had monopoly rights to provide local phone service, they face regulatory and legal issues in some locations.

Difference between ILEC and CLEC

The following table highlights the major differences between ILEC and CLEC −





ILEC was established in 1996.

CLEC was established in 1996.


It owns physical infrastructure.

It leases physical infrastructure for ILEC to provide service.


It may face limited competition in some of the regions.

It introduces competition to ILEC and offers alternative service options to consumers.


ILEC is regulated by the FCC.

CLECs are regulated by the FCC and must follow regulations set by ILECs.


AT&T, Verizon, and CenturyLink

Windstream, EarthLink, and XO Communications


It adapts to changing technologies and consumer preferences.

It pays a fee to ILECs for infrastructure leasing, facing regulatory and legal challenges.

Full Form

Incumbent Local Exchange Carrier

Competitive Local Exchange Carrier


In conclusion, competition between ILECs and CLECs has increased options and innovation in the telecommunications business, resulting in better services and reduced pricing for consumers. Understanding the differences between these two types of companies will help consumers make informed decisions when selecting a local phone service provider.

Updated on: 14-Apr-2023


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