Definition: CLEC

(Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) to offer voice and data services via both landline and wireless delivery. Many specialize in one type such as fixed wireless or DSL, while others offer a range of services. Although the ILECs were required to offer their facilities and last-mile transport to the CLECs at a fair cost, many did not make the process simple or expedient.

Although most CLECs are established as a telecommunications service organization, any large company, university or city government has the option of becoming a CLEC and supplying its own employees with telephone service at reduced cost. It must have a telephone switch, satisfy state regulations, pay significant filing fees and also make its services available to outside customers. See ILEC, BLEC, ELEC and TELRIC.