ad, the outlook could not be said to be optimistic for anyone except the wealthiest incumbents. Role Reversal: States Become Champions of Competition When the Telecom Act first passed, proponents of competition supported greater federal power and less state authority, in large part because state regula- tors had often proven themselves, up to then, as opponents of competition. Although a few states had been supportive, others undertook rear-guard actions against the CLECs. This was an example of regulatory capture, when a regulatory body becomes largely beholden to the companies it is supposed to regulate. RBOCs and other ILECs had played that game well. It was the Iowa Utilities Board, after all, that was the lead plaintiff against the original unbundling rules. But a funny thing happened as time went on. Local telephone competition did not simply save businesses money while resulting in higher rates for granny, as the incumbents had warned. Instead, UNE-P dramatically lowered rates for many consumers, even granny, providing ILECs with real price pressure for the first time. This proved to be politically popular, even in rural states. And indeed it was the rural states that were most dependent on UNE-P, because they were least likely to be able to support more elaborate facilities-based competition. So while the Powell FCC was contemplating the abolition of UNE-P in the TRO, CLECs Winning Strategies Are Met by Rule Changes Kevin Martin's compromise, putting the onus on the states, was seen as very procompetitive. And after the D.C. Circuit vacated the TRO and potentially made most UNEs unavailable, numerous states took independent action to pre- serve them. The CLEC sector had never been wealthy or strong. Early facilities-based CLECs had, for the most part, lost money. But that is typical for many pioneers; the first entrants in many businesses make the big mistakes and pave the path for more successful successors. With CLECs, though, the confluence of the boom- bust cycle with the regulatory changes that follo