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Cooperstein says the fact that wholesalers such as Qwest can easily intrude on their retail space doesn't help, either. Qwest, IXC, Williams Communications Group and the new Level3 Communications are too opportunistic and aren't bogged down by the burden of leveraging old networks or living up to dividend promises. "Answering to shareholders means margins can't drop too low, too fast, which happens when you restructure," he says.

"We have to be responsible to shareholders, so pricing for long distance, even voice over IP, has to level out," agrees Mark Siegel, AT&T's Internet telephony communications director.

Jack Wimmer, MCI's executive director of network technology and planning, is more confident. "MCI operates one of the world's most advanced Internet backbones [47,000 miles of fiber optic connectivity]," he says. No matter how much sense it might make to transmit voice, data, video or whatever individually, MCI, Wimmer says, will deliver full-service options.

Changing MCI's business model to accommodate the growing differences between wholesale bandwidth delivery and customer service is part of doing business, says Wimmer. It's also a business, he says, that MCI understands better than Qwest and the others. "Offering cheap bandwidth is one thing," he says. "But have they really factored in the true cost of a full-service network?"

One more factor that may throw a wrench into the scenario is the FCC's pending decision whether to change the status of ISPs to telcos, rather than deem them "enhanced" service providers, says Craig Blakely, an attorney specializing in telecommunications regulation at Gordon & Glickson in Washington. "Enhanced services means that the digitized services ISPs provide aren't subject to the same charges that telecommunications companies are, so ISPs don't pay local access charges to phone companies," Blakely explains. "Phone companies do pay these access charges, however."

If the FCC decides that digitized voice should work in the same fee structure as traditional phone calling, then the price for voice-over-IP long distance will indeed go up, because ISPs are going to pass that additional overhead onto customers, says Blakely. (The FCC decision was pending at press time. To see the results, go to www.fcc.gov.)

AT&T's Siegel may be right about the price leveling out. But Blakely speculates that even if the price does go up, it will still hover around 10 cents per minute. Then service providers will focus competition on service and feature options.

Rivka Tadjer is a freelance journalist and technology columnist based in New York. She can be reached at 72241.2374@compuserve.com.