Do you remember what long distance cost per minute? even when you don't discount for inflation? ATT was still hitting me for $.35 a minute when I got my LD switched over to a $.05/minute company. ATT sent me ads fairly recently telling me how much I can save by getting their LD service for 20 cents/min. for the first 3 months (plus tax and tag, of course).
Yep and I also know that the technology to make calls cheaper was being installed nation wide just about the time of the split too. The new switches were more or less self running and cost was cut. Administrative cost used to eat up a lot of billing cost. Now it's all done by computer. The split didn't bring the change but rather the change was coming anyway. I haven't paid for a long distance call in several years. I use the cell for that but actually I still do pay as they add it into the service plan.
Expanded service areas for local calls came about mainly due to billing issues. It was cheaper to raise everybody's rates a small bit that do the billing.