companies were designated Other Common Carriers (OCC) and AT&T was still subject to a large degree of regulation to which the OCCs were not. At the same time that AT&T faced considerable difficulty adjusting prices, its new competitors were able to significantly undercut the larger company's rate structure. Because AT&T's long distance service was used to subsidize local phone service, its rates were artificially high. The new companies, which did not provide local service, were not burdened by this and so could charge significantly less than AT&T for long distance.
The two largest OCCs, US Sprint and MCI, as well as AT&T, have developed fiber optic networks that offer significantly better communication than copper wire, but which require a large amount of capital investment. The result is that entry into the long distance market is again difficult to achieve on a nationwide basis. MCI and US Sprint achieved market entry because they entered the market during the growth stage of the product lifecycle. However, as the market became mor
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