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VoIP For Dummies by Timothy V. Kelly

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Appendix A

VoIP Providers

The VoIP provider market has been growing in leaps and bounds since AT&T announced in January 2004 that it was abandoning traditional carrier services as a way of doing business. What they were abandoning was the way of doing business outlined in the Telecommunications Act of 1996. The act defined ILECs, or Incumbent Local Exchange Carriers. ILECs (or simply LECs) owned all the physical lines in a given area. Everyone else had to go through ILEC to get any kind of access. The act also defined CLECs (Competitive Local Exchange Carriers). CLECs leased access lines at wholesale from the ILECs.

The customers, of course, ultimately paid the bill. Either they could get lines directly from an ILEC, or they could get them from a CLEC, who in turn got them from the same ILEC. Many analysts would say that the act had a beneficial effect on the marketplace, particularly with interstate long-distance costs. But in local markets, ILECs dominated because, no matter what, they had a piece of the action. And because ILEC controlled the actual physical installation of the access lines, any shortcomings in their service had a negative impact on the CLEC’s customers.

CLECs, of which AT&T was one, are now using packet-switching protocols to provide VoIP services over their existing networks, rather than leasing POTS lines from ILECs at wholesale pricing. ILECs are now in a position where they could lose significant revenue. The fewer POTS lines installed by ILECs, the less ...

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