Before the deregulation in telecommunications,AT&T charged higher rates on long-distance service in order to make local service rates lower.Such a practice is an example of

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Cross-subsidization of local phone service refers to the practice of charging higher rates on one service to subsidize or offset the costs of another service with lower rates. In this case, AT&T charged higher rates on long-distance service to subsidize local phone service and keep rates lower for local customers. This was a common practice before deregulation in telecommunications allowed for more competition and pricing flexibility.

Before the Deregulation in Telecommunications,AT&T Charged Higher Rates on Long-Distance