What Is Incumbent Local Exchange Carrier (ILEC)?

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The U.S. telecommunications industry has been a bit like a game of hot potato—except with more lawyers and fewer potatoes. Don't worry. We will explain you in different words so you understand it better. In the 1960s and '70s, much talk was about the need for competition in the telecommunications market. By the 1980s, it seemed like everyone had gotten so caught up in their petty squabbles that they'd forgotten all about that whole "competition" thing. It wasn't until 1996 that things started to change: The Telecommunications Act of 1996 opened up opportunities for new companies to enter the telecommunications market. This was great news for people who wanted to pay less for phone service, but it was terrible news for those already making money. After all, if someone comes along who's willing to offer you less money than you're currently charging? Well… Do you know those annoying guys who always show up at your house and tell you they can give you a better deal on your cable TV? Well, they're not just trying to sell you something—they're also trying to sell you on the idea that they're part of the same company. That's right: local exchange carriers (LECs) have been around for a long time. They were once known as independent telephone companies, but now they're called LECs for short. So if you hear someone talking about an Incumbent Local Exchange Carrier (ILEC), don't be fooled into thinking they mean some ancient artifact from a world before cable TV. They mean exactly what it sounds like a local phone company with a monopoly in its area. Not surprisingly, many incumbent local exchange carriers (ILECs) didn't take this news well. They sued the federal government over this new law, but unfortunately, they lost every time!

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