Local and Interexchange Channels

Rates for private lines are based on distance and speed. Higher-speed lines that run over longer distances cost more than slower, shorter circuits. A T-1 line at 1.544 mbps is less expensive than a T-3, 44 mbps line. Pricing for dedicated lines consists of two items:

Local channels - local channels run from a customer's premises to the carrier's equipment. One local channel is required at each end of the private line. A carrier with no fiber installed in the customer's area will lease the local channel from the incumbent telephone company or another carrier. Local channels are also referred to as local loops. Local channels are often supplied by the incumbent telephone company. Because of limited competition for this service, pricing on these short links is often close to the same price as the longer interexchange circuit.

Interexchange miles - Interexchange mileage is the portion of the circuit located within a carrier's network, to the egress point, where it leaves the carrier's switch. These are carrier's points of presence (POPs).