What Is a Carrier Service

  • Updated on Jun 26, 2024
  • Published on May 29, 2024
  • 9 minute(s) read
  • Cody Schilke
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This article is intended for anyone interested in learning more about the many segments of the North American telecommunications industry. More specifically, this article is intended for those who wish to learn more about the areas related to interconnected Voice-Over-IP technologies and services. For anyone operating a Managed Service Provider (MSP) company and/or anyone responsible for telecommunications at their current employer, this is a must read.

Carrier Service providers, or CSP’s, are companies who operate in an exchange capacity, such as Wiretap Telecom. CSP’s can be hard to define and lines can get blurred. This said, we’ve listed 10 items below that help define a true CSP. If your current provider can’t answer yes to all of the items below then the provider is not a true CSP and is likely a reseller of a CSP. This isn’t necessarily a negative, but if you’re looking for a company with direct access to the PSTN (Public Switched Telephone Network) in hopes of gaining wholesale pricing access, then the list below is important.

Please note that this is not an exhaustive list, however, we recommend that you ask your current provider if they can answer yes to the following:

  1. Contributes to the Universal Service Administrative Company

  2. Is listed in the Robocall Mitigation Database

  3. Has one or more OCN’s

  4. Is a member of NPAC

  5. Has an FCC issued FRN

  6. Has numbering authorization to obtain number resources granted by the FCC

  7. Be a member of BIRRDS/LERG and NANPA

  8. Be recognized by NECA as an IPES

  9. Be a member of the Number Pooling Administration

  10. Be a Facilities-Based Provider

A true CSP will tend to focus primarily on number routing, number porting, number pooling, and related technologies such as fax and SMS/MMS technologies. The CSP will typically not engage in direct PBX and phone support such as voicemail, auto-attendants, call queues, etc. for reasons defined later in this article.

If your current provider doesn’t meet the 10 items listed above then you could be paying too much for services since your provider is paying a CSP for services they then resell to you. That is, there are two middle-men (or more) in your configuration. Additionally, this could also signify a lack of capital investment by your provider, which could indicate poor redundancy and/or call quality.

A carrier service reseller, or CSR, is not as obvious as it might seem. In general, all service providers depend on other service providers to route calls. That is, it is unusual for one service provider to originate and terminate a call without other intermediary service providers being in part of the call leg. Carrier services all compete with one another and, in a way, we all depend on each other for call routing.

A CSR can be defined as a company who doesn’t meet the 10 items listed above, but claims to route calls to and from a PBX to other destinations. In short, a CSR cannot hold numbers in the North American Numbering plan and must rely solely on other carriers, which can also be their competitors. This said, a CSR can avoid cost to become an actual CSP, but the customer could be exposed to poor services due to a potentially inadequate network infrastructure offered by the reseller.

As we mentioned above, even a CSP needs to resell services from other CSP’s from time to time. This is completely normal and expected, however, this is not a CSR situation since one CSP resells another CSP’s numbers only (not services). To further define what a CSR is:

  1. A CSR MUST resell numbers and services from a CSP since they have access to hold their own numbers and, therefore, they resell 100% of the services they purchase from a CSP.

  2. A CSR routes calls from a CSP to their own network infrastructure and then to the customer. Therefore, a CSR is typically NOT an MSP, which is described later on in this article.

  3. A CSR is NOT a CSP selling number access to another CSP, which is a common situation in the telecommunications industry.

The image below describes a simplified relationship between a CSP and a CSR, where the CSR is providing the CSP services to the customer.

Please keep in mind, however, that even carriers that meet the above 10 requirements need to resell from other carriers from time to time. Few, if any, CSP’s can directly hold numbers in all areas of the North American Numbering Plan (NANP). And, if a CSP does then their costs will be exorbitant and those costs will be extended to the customer and any provider in the downstream call path. This said, all CSP’s resell when another CSP is in an area in which they are not. This is not a negative so long as the carrier service meets the 10 above requirements. This is mainly due to the fact that those CSP’s can offer wholesale rates and have invested heavily in their network infrastructure, which is a requirement to operate within the PSTN.

The image below describes a simplified relationship between a CSP reselling (numbers only) from another CSP and then directly to the customer.

This article will not describe in entirety what an MSP is or what an MSP can provide in terms of services. An MSP typically works directly with the end-user and provides managed services support for a customer’s network (LAN/WAN) and phone system (PBX). This requires extensive knowledge of network configuration, network security, phone systems, telephone and network equipment, routers, switches and managed software.

An MSP plays a critical role in the telecommunications industry and the MSP can act as a CSR, but rarely is an MSP also a CSP due to the immense scope of various technologies, systems, and industry knowledge. In short, the telecommunications industry is an extremely horizontal and vertical industry in terms of scope of technological diversity (i.e., horizontal) and depth of knowledge (i.e., vertical) required to succeed in each area. This being said, an MSP typically relies on a CSP for direct access and the CSP’s numbering and resources. The MSP can work directly with CSP’s.

A typical MSP configuration shouldn’t include a CSR, but unfortunately this does happen with too much frequency. Below you can see a simplified view of this type of configuration

The above example demonstrates a high retail cost scenario for the customer and, therefore, the CSR, MSP, and CSP could potentially lose the account due to the CSR middleman. Combining the MSP into the CSP only scenario is preferred since this reduces costs by removing the middleman as shows below:

In addition to the above, an MSP can avoid becoming a CSR, which requires that calls route through their own network infrastructure for reasons that are not needed in most cases, and instead white-label a CSP’s product offerings and services (if the CSP offers such a product). For instance, an MSP can resell Wiretap Telecom products and services through our Core-MSP white-label software. This keeps the above illustration in tact since the customer receives products directly from Wiretap Telecom (the CSP), but as products and services white-labeled to the MSP’s specifications.

For the purpose of this article, three CSP models will be discussed.

  • Incumbent Local Exchange Carrier (ILEC)

  • Competitive Local Exchange Carrier (CLEC)

  • Internet Protocol Enabled Service Provider (IPES)

Incumbent Local Exchange Carrier

This type of provider existed prior to the Telecommunications Act of 1996. These are companies that once held a monopoly in telecommunications in the geographic areas they served. These incumbents were broken apart as part of Telecommunications Act of 1996 and are required to compete with CLEC and IPES companies. ILEC’s have significant costs as they were the original investors in the telecommunications infrastructure in the United States. CLEC’s and IPES companies must compete with as well as negotiate traversal across ILEC networks. This said, for MSP’s and end-users, working directly with an ILEC is typically price prohibitive since the ILEC target customer is mostly IPES-centric due to the ILEC desire to work with volume-based providers such as Wiretap Telecom. An Incumbent Local Exchange Carrier is a legacy carrier by definition and new ILEC’s entrants are not possible.

Competitive Local Exchange Carrier

A CLEC is a type of provider that spawned from the Telecommunications Act of 1996. Prior to the wide adoption of voice over internet protocol (VoIP), the CLEC was the only option for companies to begin competing with the monopolies of the past (i.e., ILEC’s). CLEC’s build their own infrastructure, but also rely heavily on ILEC ingress and egress services. Many CLEC’s were created in the early 2000’s, but many also failed due to the number of new entrants into the industry in a short period of time. Today the telecommunications industry still relies heavily on CLEC’s, especially for “last mile” services in rural areas.

Internet Protocol Enabled Service Provider

An internet protocol enabled service provider, or IPES, is a relatively new designation from the FCC. In recent years VoIP technologies have matured and have become the industry standard for data, voice, SMS, MMS, and many other services. With consistent pressure from the VoIP industry, and with the robocalling epidemic in the United States, the FCC has recently allowed “Interconnected Voice over IP” to reach deeper into the telecommunications industry by regulating calls via the new STIR/SHAKEN policies, which were imposed mainly on legitimate Interconnected VoIP companies such as Wiretap Telecom. This, in turn, opened up number pooling and authorization and, in turn, allowed these companies to compete directly with ILEC/CLEC companies.

Wiretap Telecom recognizes itself in the telecom industry as a Carrier Service Provider (CSP) and intends to never blur the lines. That is, we work directly with our MSP partners, who provide the direct support that our mutual customers deserve. We’ve found that drawing a clear distinction between a Carrier Service Provider (CSP), a Carrier Service Reseller (CSR) and a Manage Services Provider (MSP) is critical both the MSP’s who are looking for new partnerships and for end-users who might be looking for an MSP for direct support or for a direct connect to an CSP. It can be difficult to distinguish between a CSP, a CSR, and an MSP since some MSP’s attempt to position themselves as CSP or CSR while a CSR typically positions themselves as a CSP. In the end Wiretap Telecom offers wholesale services to MSP’s and low retail rates to direct end-users.

We offer a Core-MSP partner program that eliminates the need for a CSR to exist in the call path and, therefore, greatly reduces superfluous technologies, call hops, outages and the like. Connecting a customer PBX to a CSP is clearly the best solution and Wiretap Telecom offers a minimum of quadruple redundancy and fully redundant geographic redundancy to all of our customers.

Wiretap Telecom offers free 24/7 support services and focuses heavily on its facilities-based infrastructure, which is located in data centers within the Unites States. Wiretap Telecom is a debt free Carrier Service Provider (CSP) and has been in operation since November of 2012.

As discussed above, it is critically important that an MSP or end-user determine with whom they’re doing business with. It rarely makes any sense to do business with a Carrier Service Reseller as this will increase costs and potentially reduce product and service quality. To keep costs down and to provide our MSP partners and customers with the lowest possible rates and pricing, Wiretap Telecom doesn’t engage in commercial agreements with PBX manufactures or other CSP’s. Simply put, we focus on what we do best, which is providing pure and reliable telecommunications services and products to businesses and organizations across the United States.