on, Industry Analysis Division, Common Carrier Bureau, May 25, 2000). 63. FCC, Trends in Telephone Service, table 13.1. 64. Data from the Bureau of Labor Statistics (BLS) (www.bls.gov). 65. FCC, Local Telephone Competition, table 2. 66. FCC, Telephone Industry Revenues, Quarterly Roll-ups (October 2004). 67. FCC, Reference Book of Rates, Price Indices, and Household Expenditures on Telephone Service (July 2004), table 2.6. In this analysis, I assume that the CLECs charged 15 percent less than the incumbents charged for local residential service, but I use the $441 average res- idential rate anyway because I am applying it to the CLECs' residential and small business subscribers. 68. Since there is no evidence that ILEC rates fell, I do not include any effect of this rate competition on ILEC rates. 69. FCC. Statistics of Communications Common Carriers, 2003-04 (October 2004), table 2.8. 70. "Declaration of William E. Taylor Regarding Special Access Pricing on Behalf of Verizon," submitted to the FCC, WC Docket 04-313 and CC Docket 01-338 (October 4, 2004). 71. Under these assumptions, it appears that the competitors have replaced about one- third of the special access and private lines that the incumbents would have had in 2003. If the competitors are more efficient than the incumbents in providing these lines-say, 30 percent more efficient-then one-third of the $8.4 billion may be a net savings to the economy. 72. Because most of the entry was predicated on the use of incumbents' facilities, the diversion of customers from incumbents to entrants has not reduced the incumbents' need for capital expenditures to maintain their facilities. 73. Author's tabulation from reports of forty-five carriers to the SEC. This does not include local investments by MCI or AT&T. 74. Association for Local Telecommunication Services (ALTS), The State of Local Com- petition, 2004 (July 2004). The ALTS data include expenditures by Level 3, AT&T, MCI, and some cable companies. 75. Even if the assets had infinite life, a 15 percent befo