ported a $3.9 billion loss for the first three quarters of 2004. 29 Sprint reported a $1.7 billion operating loss for the first three quarters of 2004 in its long-distance operations. Conclusion The only reasonable conclusion that can be drawn from the empirical evi- dence on the U.S. long-distance sector is that independent long-distance companies are disappearing. Given the onslaught of competition from wireless companies, the recently emancipated Bell companies, and- now-VoIP, the revenues of the long-distance carriers are falling at the rate of 10 percent a year or more. Unless these companies can develop a full array of telecom services, including local access, broadband, and wireless, they are unlikely to continue to operate profitably. Without their own local networks, they will be unable develop these services, and it is surely too late for them to enter (or reenter) the wireless business. AT&T has a substan- tial investment in fiber rings in large cities to serve the largest business cus- The Death of Distance and of the Long-Distance Carriers tomers, as does MCI, but neither can reach the mass market with its own facilities. Unfortunately, none of the long-distance companies is investing any further in its own local infrastructure. Thus they are in the process of allowing most of their business to migrate to wireless carriers, incumbent local exchange carriers, and-eventually-cable television companies. For much of the past eight years, the long-distance carriers were pro- tected from Bell company competition in interLATA markets by the 1996 Telecommunications Act. Keeping the Bell companies out of the long- distance market cost consumers $20 billion. By the end of 2003, this pro- tection had vanished, and the burden on consumers had been lifted. Much has been made of the accounting scandals that have gripped this sector, such as those that led to the collapse of Global Crossing and World- Com and converted Qwest back to a local exchange company. These scan- dals undoubtedly exacerbated the sector's pro