s. Long Distance Rate Restructuring Had Been Planned Before Divestiture Prior to divestiture, the BOCs (and the many smaller independent telephone companies serving mostly rural areas) divided long distance revenues with AT&T Long Lines based on the separations and settlements process. It produced the implicit subsidies from AT&T that ENFIA tariffs produced from competi- tive carriers. Separations involved some clever accounting, taking into account such factors as relative per-subscriber investment in plant and the percentage of mileage carried by each company. High-cost rural companies could collect well over a 100% share of AT&T's revenues for calls to their subscribers. And it kept an ever-growing share of the local telephone network within the interstate Divestiture: Equal Access and Chinese Walls jurisdiction, where its heavy fixed costs could be covered by usage-based billing (tolls). The District of Columbia Circuit Court of Appeals Execunet decision in 1977 hinged on a determination that the FCC, in broadly approving private line competition, did not properly take steps to prohibit competition in the closely related MTS and WATS (retail and bulk long distance calling) markets. This left the commission with a problem; it could affirmatively determine that competition should be disallowed, or it could accept competition and come up with new rules for it. Thus in 1978, it opened the MTS and WATS Market Structure proceeding [9]. The ENFIA agreement that year led to a tentative détente between AT&T and GTE, the largest incumbents, and the competitive providers. (The smaller independent telephone companies were not initially required to interconnect with competitive switched long distance providers.) There was, by then, no serious chance of going back to a monopoly. In April 1980, two days after releasing its landmark final Computer II ruling and before divestiture was being spoken of in public, the FCC adopted a Second Supplemen- tal Notice in 78-72, proposing a system of "access charges" to replace the old s