In that period the company's prices for basic interstate long-distance service have dropped by a total of 38 percent.

A problem is the fate of interstate service if the plan relied on states' money and one or two states did not want to pay.

Traders attributed the moves to the Government's decision not to lower the phone companies' 12 percent rate of return on interstate service.

Phone companies are assessed a percentage of their revenue from interstate and international service, and most pass along those charges to customers.

Today, the only vestige of this interstate service comes by Amtrak's Empire Builder train, running once daily in each direction.

One strategy is to classify Internet-based TV as an interstate service that would be beyond the regulation of municipalities.

Rate-of-Return Carriers-Incumbent telephone companies that are given the opportunity to earn an 11.25% rate of return on their interstate services.

The Rail Safety Act regulates both local and interstate services.

In 1994 Australian National's interstate services were transferred to National Rail.

Under "cost plus" regulation, phone companies providing interstate service are allowed to set prices that cover reasonable costs, including dividends sufficient to keep investors happy.