Problem
Before deregulation of the telephone industry in 1984, AT&T provided both local and long-distance telephone service. A number of firms argued that they could provide long-distance service between major cities more cheaply than AT&T, but AT&T argued against allowing firms to enter only the long-distance market. If those other firms (which had no technological advantage) could actually have offered long-distance service more cheaply, what does that imply about cross subsidies in AT&T's pricing of local and long-distance service? What would have happened if AT&T had been required to continue offering local service at the same price, but competition had been allowed in the long-distance market?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.