" proposal, which has now re- duced access charges to slightly more than 1 cent a conversation minute. 4 Once access charges fall to roughly 1 cent a conversation minute, as cur- rently required by the CALLS plan, they obviously cannot be depressed The Death of Distance and of the Long-Distance Carriers much farther. Indeed, the margins from long-distance service have shriv- eled now that interstate access charges have stabilized, wireless carriers have begun to offer national calling plans, and the Bell companies have been permitted to enter interstate long distance. With consumer rates often as low as 4 or 5 cents a minute, the margins have shrunk SO much that the in- dependent long-distance carriers would be in severe financial difficulty even if they were not losing call volumes at an alarming rate. Carrier Concentration and Long-Distance Rates The price data examined here are average revenues per conversation minute as reported by the FCC or the large carriers (see table 6-2). The FCC obtained its data for 1984-91 directly from AT&T, but since then has calculated averages from reported revenue and carrier minutes. Hence any reporting problems will obviously introduce errors. One likely source of bias is the diversion of reported switched access minutes as carriers try to avoid the very high access charges maintained by regulators in the name of "universal service" policy. These access charges are designed to transfer income from subscribers who make large numbers of nonlocal calls to those who do not and to all subscribers in rural areas. 5 Even after the CALLS plan is fully effective and switched interstate access charges drop to little more than 1 cent a conversation minute, access charges are still likely to be above the long-run incremental cost of origi- nating and terminating calls. Under the current "reciprocal compensation" rule for terminating local calls, for example, carriers charge between 0.2 and 0.3 cents a minute for terminating local calls.6 In the mid-1990s, inter- state switched access char