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Three years ago it was clear that technology and regulatory policy were transforming the communications industry and AT&T had to make a transformation of its own. We had to move AT&T from just handling the long-haul portion of long distance voice to providing the next generation of end-to-end broadband communications and information services, in whatever combinations customers wanted. We certainly weren’t walking away from long distance, but it needed to become a smaller percentage of our total revenue as we grew in new areas.

Dear Shareowners: Transitions are tough, and 2000 was a major transition year for the communications industry and for AT&T. It was a year when the decline in long distance prices accelerated sharply throughout the industry while newer segments of our company such as data, wireless and broadband services grew in double digits.

The world's networks carried increasingly more data than voice. More long distance and calling card calls were replaced by wireless calls and e-mail. The lack of widespread competition in local phone service made it clear that the regional Bell companies are not opening their local monopolies to competition as the Telecommunications Act of 1996 required. Yet those companies are entering the long distance market.

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