This deregulation of the telephone network allowed licensed alternative providers to compete with established telephone companies. In my hometown of Santa Rosa, California, the late 1990s saw the emergence of one such CLEC, Advanced TelCom Group, as a major competitor to heel-dragging Pacific Bell (now AT&T) in providing new and advanced telephone services.
ATG targeted communities with populations less than 250,000 people, such as Santa Rosa, back when that company existed in the early 2000s. These were the towns and cities (markets) that the larger incumbent telcos ignored, either because there was not enough money to be had in the smaller markets or because they were too busy fighting off the larger CLECs challenging them in the bigger metropolitan areas, such as San Francisco.
About the Telecom Act, which removed a major obstacle for CLECs, Jeff notes: “There were things going on in the market where optical was certainly getting sexy because everybody needed bandwidth. It was all about optical, and the Telecom Act was hot and heavy and 10 years after the Telecom Act there was all of this glass in the ground that everybody was trying to exploit. Everybody was getting money from everywhere just because of how loose the financial space was back then. There were a lot of different characteristics of what was going on in the market, and not all of them healthy, by the way . . . Those were all of the dynamics that were leading towards the perfect storm.”
Too much of a good thing can be bad. And the euphoria over building optical networks came crashing down during the telecom meltdown, which quickly followed the dot.com bust in the early 2000s.
Jeff wryly observed, “Most everybody we ever sold to was either acquired or going out of business.”
He’s correct. At the time I wrote The Upstart Startup in 2013, of the twenty-two alternative carriers I researched, only four continued to operate, 13 were acquired, and another five filed for bankruptcy. The table below highlights their status:
 According to techtarget.com, “In the United States, a CLEC (competitive local exchange carrier) is a telephone company that competes with the already established local telephone business by providing its own network and switching. The term distinguishes new or potential competitors from established local exchange carriers (LECs) and arises from the [run-up to the] Telecommunications Act of 1996, which was intended to promote competition among both long-distance and local phone service providers.”
 Time Warner Telecom (tw telecom) was acquired by Level 3, in 2014.