Julie Snyder found herself in a ten-month battle with her phone company (MCI Worldcom), which had overcharged her $946.36. She spent hours on hold, in a bureaucratic nowhere. No one seemed able to fix her problem, and there was no way she could make the company pay her back for all her lost time and aggravation.

Behind the scenes, a fierce battle is emerging among rival companies and between federal and state regulators over the shape of new government regulations and control of the service, which has the potential to be the most significant development in telecommunications since the breakup of the AT&T monopoly 20 years ago.

The regional Bell phone companies, long dismissed as laggards stuck with a declining fixed-line businesses, are coming back into favor again. The companies have gained the upper hand in their battle with the country's long-distance carriers, and are now stealing momentum from the cable industry in the fight for broadband customers.

Most Carriers are trapped. They are faced with equally unpalatable choices: "lose-if-you-win" and "lose-if-you-lose."

Anyone looking to understand the economic future of the telecom industry must begin to look at global as well as regional assumptions about culture, technology policy and economics.

Over the last three decades, Western technologists have designed vast, complex greenfield systems like the Public Internet. For a while they built and people came. As Moore's Law turned their products into commodities, they found themselves too top heavy to compete.

The IT and telecom companies of Europe and North America are locked in to a complex systems concept frame of mind from which they are unlikely to escape.

In reviewing both the marketing and profit and loss lessons of the last quarter of the last century, from automobiles to fine china to radio to agriculture, we find that the adoption of "one size fits all" economies of scale lead irreversibly to "production cost below sales price" commodities that either require governmental subsidies or an entire re-thinking of the system's goals.

AT&T's capitulation is not necessarily the Bells' victory. The future poses its own uncertainties for the Bell companies.

"The Bells should enjoy it while it lasts."

The Bells are benefiting from the now largely irrelevant distinction between local and long-distance calls, and the emergence of service "bundles," in which consumers pay a single monthly price for local, long-distance and even Internet service.

AT&T said Thursday it would stop seeking new customers for its traditional consumer long-distance service.

Troubled telecom equipment maker Nortel Networks has agreed to outsource most of its manufacturing in a deal worth between $675 million and $725 million.

At SuperComm last week, the big announcement was SBC Communications' plan to spend up to $6 billion stringing fiber-optic lines in its customers' neighborhoods. SBC is second in size only to Verizon, which recently announced its own service offering of fiber-to-the-premises, or FTTP.

For investors, however, these big FTTP announcements should really be no big deal. That's because FTTP has proven no big deal for telecom suppliers, who are seeing ... well, no big deals.

Phone companies are reeling from the plummeting price of their cash-cow franchise -- voice.

When MCI emerged from bankruptcy in April, it had the makings of a fearsome competitor.

Scant months into MCI's new life, the company's rivals are hardly quivering.

"Everybody is doing Internet convergence. It's not a way to [solve] their problems."

How did things get so dire?