esale prices was gener- ally in the range of 15 to 20 percent of the retail rate because incumbents do not have to engage in large marketing programs to enroll their sub- scribers. 11 Hence if a residential customer was paying $360 a year for its local service, the entrant would receive a gross margin of $54 to $72 a year to pay for its marketing, billing, and other customer service costs. Entrants quickly discovered that offering residential resale service at these margins could not be a profitable stand-alone business. Unfortunately, neither is the resale of much higher-priced local business services because the entrant is locked into the incumbent's service package and cannot offer the business customer new or enhanced services. Resale is likely to be an attractive short-term option only for an entrant whose long-range strategy is to build its own network, a strategy that takes time to implement. If the entrant markets its new services throughout a metropolitan area but its network facilities reach only a small share of the Local Competition under the 1996 Act area, it can use resale to serve customers who respond to its marketing in areas that are not yet served by its own network. In other cases, an entrant may be offering a bundle of services over its network that does not include local telephony. For example, RCN has built hybrid fiber-coaxial cable networks to deliver broadband Internet access and video services. If it does not wish to build its own circuit-switched telephone facilities into such a network, preferring to wait for an improve- ment in the technology for delivery of voice over Internet protocol (VoIP) services, it may decide to offer resold local telephony service to fill out its "bundle" of services. Network Unbundling A very large share of the incumbent local telephone network's $1,600 to $2,000 in investment per line is sunk in the distribution plant deployed to reach the final subscriber. Replicating this cost for all but the highest- revenue customers in the more densely populated areas