loyers MCI, Inc. Falling sales, prices Spending in the U.S. telecommunications sector, which totaled $339 billion last year, has slid by more than 4 percent since 2001, according to Red Bank, N.J.-based market researcher RHK Inc. The decline in spending is partly attributable to falling prices. The cost of a long-distance call has plunged to five cents a minute for some consumers from 32 cents in 1984, according to the U.S. Federal Communications Commission. Unfortunately for the industry, the decline began after phone companies invested heavily in new networks. MCI alone spent more than $30 billion on its 98,000-mile high-speed network, one of the world's largest. While phone companies battle the glut of capacity, e-mail is eating into demand for long-distance calls. Unlike AT&T and Sprint, the No. 1 and No. 3 U.S. long-distance companies, MCI lacks a cellular service to cushion the loss of business to wireless providers. At the same time, Verizon and fellow local phone companies have signed up more than 35 million long-distance customers since the federal government opened the market to competition in 1996. Through the looking glass Competitors are closely watching MCI's actions and will use anything that hints at an ethical lapse to lure its customers. AT&T, Verizon and SBC have accused the company of improperly routing calls to avoid fees for using their networks. MCI has said its internal investigation found no evidence to support the allegations. As part of the resolution to a number of disputes between the companies including the call- routing matter, MCI will forgive $120 million in access fees owed by AT&T. AT&T agreed to drop claims related to the allegations, including a racketeering and fraud lawsuit it filed in Virginia in September 2003. The agreement is subject to bankruptcy court approval, and is scheduled for a hearing in March. When the call-routing allegations surfaced in July 2003, the U.S. General Services Administration announced it was barring MCI from new government contracts and said it m