With the passage of the Telecommunications Act of 1996, there has been an explosion in the number of CLECs. The Act allows companies with CLEC status to use ILEC infrastructure in two ways:
1) Access to UNEs
Important to CLEC telecommunications networking is the availability of unbundled network elements or UNEs (through a collocation arrangement). UNEs are defined by the Act as any "facility or equipment used in the provision of a telecommunications service," as well as "features, functions, and capabilities that are provided by means of such facility or equipment." For CLECs the most important UNE available to them is the local loop, which connects the ILEC switches to the ILEC's present customers. With the local loop, CLECs will be able to connect their switches with the ILEC's switches, thus giving them access to ILEC customers.
2) Resale
Another option open to CLECs is the resale strategy. The Act states that any telecommunications services ILECs offer at retail, must be offered to CLECs at a wholesale discount. This saves the CLEC from having to invest in switches, fiber optic transmission facilities, or collocation arrangements.
In any case, a CLEC may decide on one or the other or even both. CLEC status is very beneficial, especially for ISPs, who may easily get access to the copper loops and other switching elements necessary to provide xDSL services.
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