LATA (Local Area and Transport Area) was the result of the 1982 Modification of Final Judgement that enabled companies like Sprint and MCI to carry long distance traffic by breaking up the Bell Operating Companies and requiring they divest to form the 7 local phone service providers (AKA LECs, “Baby Bells”, RBOCs (Regional Bell Operating companies), local telcos, and a spate of other names)―Pacific Telesis, US West, Southwestern Bell, Ameritech, Bell Atlantic, Cincinnati Bell, and BellSouth. The ability for companies to compete on consumers’ long distance traffic would create competition, spur innovation, and give consumers what they’d never had―options. Back in the day when you’d set up your phone service, you’d be asked by the LEC which long distance carrier, or PIC (Primary Interexchange Carrier, AKA IXC (Interexchange Carrier), you’d like to use: Sprint, MCI, or AT&T. Wait, AT&T? Aren’t they part of Bell, which was required to divest into the 7 LECs? Yes, they were, and we’ll get to that in a future blog.

Now, to the good stuff. LATAs, which are regions created within each LEC’s area of service, were the boundaries separating areas served by contiguous LECs (ones sharing borders). OK, that’s fine, but it begs the question Why not just use LEC boundaries as the dividing line? It’s a good questions and hopefully the following will answer it.

First, let’s imagine that LATAs were never created in the early 1980’s. It would have meant the LECs, which could only carry local traffic, would be connecting “local” calls between hundreds of miles…for free. For instance, a call between Padre Island, TX. and Kansas City, MO., 2 cities served by Southwestern Bell and separated by over a thousand miles, would not only be free, but would prevent the  long distance companies from carrying that traffic. As a result, the IXCs would only be allowed to carry long distance calls between LECs, which would have dramatically reduced their revenue and prevented what the government wanted to create―competition, moe innovation, and choices for consumers. The long distance carriers had different, lower rates for calls made within the LATAs, called intra-LATA calls, and higher rates for long distance calls between LATAs and the LECs.