e, must show staying power. Ninety- two percent of all business customers want to work with an account team when purchasing services; yet, according to both formal and informal surveys that have been conducted, account teams are not creating long- lasting relationships or loyalty in their day-to-day dealings with cus- tomers. Eighty-eight percent of those customers buy their services from the local provider, but only 53 percent say that they would continue to do SO if presented with a capable alternative. According to numerous stud- ies, the single most important factor that customers take into considera- tion when selecting a service provider is cost. Yet, the most important factor identified for improvement is customer service. The most daunting challenge that has historically faced service providers is the requirement to provide true universal service, in rural areas as well as in metropolitan and suburban areas. The American Communications Act of 1934, signed into law by President Roosevelt, mandated that telephony service be universal and affordable. To make this happen, AT&T agreed in the 1940s to offer low-cost service with the Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright © 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website. The Byzantine World of Telecom Regulation Chapter 4 Photo courtesy merican DISTANCE TELEPHONE tacit approval of the Justice Department to charge a slightly higher price for long distance, some business line services, and value-added services, as a way to offset the cost of deploying high-cost rural service and to sup- port low-income families. These subsidies made it possible for AT&T to offer true universal, low-cost service. Today, 60 to 70 percent of the local loops in the United States are still subsidized to the tune of anywhere from $3 to $15 per month. As a result, the incumbent service providers often charge significantly less for the service they sell tha