 on the Digital Multiplexed Interface (DMI) Mode 3 that it had designed for IVD PBXs. But AT&T did not have a success- ful Frame Relay product of its own until it purchased Ascend, which had earlier purchased Cascade, in 1999. Regulators Made the Deal, but Fiber Did Not Make it Home SONET put ample bandwidth into the RBOC backbone networks, but the "last mile," the local loop to the subscriber, was still almost always the same old twisted-pair copper wire that had been only designed to carry voice. By the mid-1980s, there was talk about "fiber to the home," which was expected to fol- low the deployment of fiber elsewhere in the network. By the early 1990s, the RBOCs were willing to talk about it more openly, to the point of making promises. But they wanted something in return. The RBOCs, as monopolies, had been subject to the same kind of rate-of-return regulation that the old Bell Sys- tem had, with profits capped at a percentage of their undepreciated capital rate base. With new technology lowering the cost of doing business (digital switches required less capital and less labor than their older counterparts), the RBOCs wanted to keep more of the savings. So they petitioned the states and the FCC to move to "rate cap" regulation. This would allow them pricing flexibility, with their rates capped at a level that reflected inflation minus a productivity factor. In exchange for this, they promised to undertake a costly network upgrade, to install "broadband" capability-usually defined then at 45 Mbps in both direc- tions-to a large fraction of homes. Note that this was just before public Internet service was readily available; typical broadband applications were expected to include telecommuting, teleconferencing and "video on demand." Indeed a major goal was to provide competition for the cable companies, which at that time were largely held in low regard by customers and regulators alike, but which had won, in the 1992 Cable Act, their own freedom from most local rate regulation, in exchange for the possibility 