nst anticompetitive activity just as effectively. Con- sequently, it allowed local telephone companies to avoid the separate subsidiary requirement SO long as they adhered to a two-phase system of alternative regulatory requirements. The first phase was in essence a nondiscriminatory access mandate known as CEI, which required local telephone providers to provide unaffiliated enhanced service providers with access to the same facilities on the same terms and conditions provided to their own proprietary enhanced and information service offerings. The second phase, known as ONA, in essence required unbundled access to all of the incumbent's network elements (FCC 1986a). A series of judicial chal- lenges prevented the alternative regime created by the Third Computer Inquiry from ever being fully implemented. As we discuss at greater length in Chapter 9, the consent decree ordering the breakup of AT&T also required the local telephone companies to provide equal access to all long distance and information service providers. This regime was later See MCI Telecomms. Corp. V. FCC, 561 F.2d 365 (D.C. Cir. 1977); MCI Telecomms. Corp. V. FCC, 580 F.2d 590 (D.C. Cir. 1978). Both orders were affirmed on judicial review (GTE Serv. Corp. V. FCC, 474 F.2d 724 (2d Cir. 1973); Computer & Commc'ns Indus. Ass'n V. FCC, 693 F.2d 198 (D.C. Cir. 1982)). 6 For the difficulties that the third Computer Inquiry faced in surviving judicial review, see Chapter 4. The Regulation of Local Telephone Networks extended to mandate equal access to CPE as well. These measures made no attempt to introduce competition into local telephony. Instead, they conceded that local telephone service remained a natural monopoly and instead attempted to foster competition in complementary services (FCC 1996b). 3. The Emergence of Competition in Local Telephony Eventually, competition began to emerge not just in services that were complemen- tary to local telephony, but also with respect to local telephone service itself. The arrival of fiber optics fostered the 