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Frequently Asked Questions

What is a CLEC? 

Competitive Local Exchange Carrier, or simply stated, a CLEC is a mini telephone company. 

Why should my ISP become a CLEC?

There are two basic reasons, the first is simply that even a small ISP can potentially save thousands of dollars every month just by becoming a CLEC. Many ISPs consider that reason enough to become a CLEC. The second reason is that as a CLEC you are afforded more opportunities to offer new products and services such as VOIP, IPTV, Metro Ethernet and long distance. 

Don't I need to buy expensive telephone switching equipment to become a CLEC?

No.  You will need Cisco Modem Banks. These can typically be purchased used from third party sources; the sale of your old modems will substantially cover the cost of the third-party purchase. It is possible that you might need a router, but that will depend upon your current configuration. If you already have Cisco Modem Banks then there is no additional cost.

Thanks, but don't I need to pay American CLEC a lot of money.

While there is a minimum charge associated with our services, the vast majority of our fees are not paid until your ISP starts realizing the tremendous savings of being a CLEC. If you don't save money, we don't get paid.

What kinds of CLECs are there?
There are two kinds: Facilities-based and Reseller. Facilities-based means you have physical equipment that is interconnecting with the incumbent phone company's network. American CLEC helps your ISP become a facilities-based CLEC. This is the path to the deepest savings. Your CLEC will also have the ability to act as a reseller of phone company services.

Who can become a CLEC?
There are no restriction upon who can become a CLEC. Most states require financial information as part of the application process. There are many companies, including quite small companies, which have become CLECs.

We have several CLECs in our area, can't we achieve as much savings by just buying from them?
No. Traditional CLECs use expensive traditional telephone switching equipment. Even if they were willing to sell to your ISP, at cost, their costs will be substantially higher than your costs.  By focusing on the specific needs of ISPs, we avoid unnecessary, expensive equipment.  This gives you a competitive edge in the marketplace.

In what areas do I save the most money?
Savings typically comes from these areas:
1. Replacement of phone lines (typically PRIs)
2. Replacement of point to point customer T1 lines
3. Elimination of remote POPs (establish LATA wide service)
4. Elimination/reductions of backbone T1s & T3s due to network
simplification and possibly moving into the ILEC's Central Office

What kind of equipment do I need to purchase to be a CLEC?
You already have it - your modem banks. With external call control your modem banks are transformed into a phone switch with one purpose: to answer modem calls. We recommend working with Cisco 5300/5350/5400 series modem banks (Media Gateways). If you don't have Cisco modem banks, your existing modems banks can be sold (eBay) and comparable Cisco equipment can be purchased on a near even dollar basis. These same Cisco modem banks can also used to interconnect VOIP calls to the public telephone network.

What about remote POPs?
If you have remote Points of Presence so that you can provide local dial-up service or point-to-point T1 service, these remote POPs can be consolidated into one central location in each LATA.

What do all these acronyms mean?
CLEC - Competitive Local Exchange Carrier. A new phone company as defined in the 1996 Telecommunications Act.

CO - Central Office. Your local telephone company building where call switching equipment is located.

ILEC - Incumbent Local Exchange Carrier, i.e., the traditional local phone company.
 

ISP - Hey, we all have our acronyms: Internet Service Provider.

IXC - Interexchange Carrier - a long distance company.
 

LATA - Local Access and Transport Area. A local region of telephone use which is larger than the local calling area, 

           typically much larger than a city, and smaller than a state. It tended to correspond roughly to the area covered

           by an Area Code back before so many new area codes came into being. Until recently, ILECs were restricted to

           only transporting calls within LATAs. Calls between LATAs were handled by the Long Distance Companies. This is

           where the strange distinction between local long distance and long long distance came from.
 

POP - Point of Presence. An ISP term for a place where physical equipment is located. Remote POPs usually consist of a

         minimal amount of equipment.
 

Switch - The term for the equipment within a CO that provides dial-tone, listens to your Touch Tones, and routes phone

             calls to where they are going.

Isn't being a CLEC too complicated for most ISPs?
Being a CLEC is actually quite easy - not much different than what you do now. Becoming a CLEC is the problem. We do all the work for you to become a CLEC. Most of the work is all one-time only kinds of things that you would never have to do again. We take you all the way through to operational.

I have term contracts on most of my PRIs, T1s, etc., is that a problem?
Contracts are certainly an issue and will determine in part the pace for you obtaining the maximum savings. It takes about six to nine months to become operational as a CLEC. Most ISPs have services on a variety of contracts that expire at a various times. One thing we do early on is collect all of the contract information on your circuits so we can set up a plan. Also, some contracts have more flexible cancellation terms than others. In the end, most find that a reasonable number of circuits can be switched over as soon as they are operational with the rest coming as additional savings over the following one to two years. This pacing can actually be an advantage in that it gives you time to migrate your network in stages.

How does American CLEC get paid?
Most of our payment comes as a portion of the savings we obtain for you. After we meet with you we will write a detailed proposal which will include our total fee. We work on a flat rate basis. Once you have us on your side we are available for whatever time it takes. Typically we charge $2,000/month for the implementation period which is approximately six months. At the end of that period, you will be operational and will begin to save money over circuits that you had before. We take a portion of that monthly savings toward the remainder of the fee. Of course, it is in our interest to get you up and running as quickly as possible and to save you as much as possible. We don't get paid until you do!

Can't I just create this CLEC myself?
Yes, certainly. But it is a lot of work. If you take the path we recommend and avoid the additional time and considerable expense of a traditional phone switch, you will find - best case - that you will have spent six to nine months of head down, all day, every day, working hard discovering and implementing what is needed and hoping you didn't make a critical mistake. American CLEC is paid mostly from a portion of the savings we obtain for you - savings that unless you start right now - you won't have saved. Since we are paid out of savings, you can think of this as your ILEC and CLEC vendors paying us to do this for you!

What if I need help after the CLEC is established?
There are some responsibilities that come with running a CLEC. They include updating your tariff, filing statements with your state public service commissions, filing semi-annual Number Resource Utilization Forms to the FCC, along with calculating, paying, and filing state and federal taxes. You can also expect to periodically update/negotiate new terms in your Interconnection agreement. But don't worry, American CLEC is available on a retainer basis to handle all of this for you, plus ongoing help for new circuit conversions and to add new services, collocation, etc. This ongoing retainer is not required.  It is purely at your option.

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