local exchange carrier (LEC)
Definition of local exchange carrier (LEC) in The Network Encyclopedia.
The largest LECs came into existence with the breakup of AT&T in the early 1980s, which led to the formation of several independent Regional Bell Operating Companies (RBOCs), but there are also a number of smaller independent LECs in the United States, especially in rural areas that were never part of the Bell system. LECs connect their communication networks using inter-exchange carriers (IXCs), which are long-distance carriers such as Sprint, AT&T, and MCI WorldCom.
The Telecommunications Act of 1996 changed the landscape of the telephone system in the United States by allowing LECs to compete in the deregulated long-distance market and by allowing IXCs to provide services directly to customer premises through mergers, acquisitions, and new technologies. Before 1996, each LEC was also an incumbent local exchange carrier (ILEC) that was the sole provider of telephone services to subscribers in its geographical region. The Telecommunications Act allowed companies to become competitive local exchange carriers (CLECs) that could compete with ILECs in their area by leasing or purchasing services from the ILECs or installing their own systems. LECs have an advantage in that they already own a right-of-access to customer premises, while IXCs have an advantage in that they are larger, more highly capitalized companies that can afford to invest heavily in new technologies and services or even acquire LECs directly.