on for Local Telecommunication Services, and the Cellular Telecommunications Industry Associ- ation (CTIA) and from the financial reports of the large long-distance carriers. 4. The indexes in figure 3-2 are calculated from monthly closing prices of individual equities, weighted by initial-period market capitalization. The RBOC index is a weighted average of the common equities of SBC, Bell South, and Verizon. The CLEC index is a weighted average of the equities of Allegiance, Covad, McLeod, Time Warner Telecom, and XO Communications, with weights based on base-period market capitalization. The wire- less index is a weighted average of the equities of Leap, Nextel, RCCC, and Sprint PCS, with weights based on base-period market capitalization. The long-distance index is a weighted average of the equities of Sprint and WorldCom. As firms disappear, the weights are adjusted to reflect the intial-period market caps of the survivors. 5. The "long-distance companies" in figure 3-2 are Sprint and MCI-WorldCom. AT&T is excluded because for much of 1996-2004 it was a cable television company and owned one of the largest wireless carriers. Its decline was nearly as great as that shown for the other Notes to Pages 18-26 two carriers in figure 3-2, as its market capitalization declined from nearly $200 billion in early 2000 to $11.5 billion at the end of June 2004. 6. Yochi J. Dreazen, "Wildly Optimistic Data Drove Telecoms to Build Fiber Glut," Wall Street Journal Online, September 26, 2002. 7. It is unclear how much of this reported capital spending was devoted to productive capacity. Much of it may have been spent on office facilities, collocation cages, marketing- related equipment, and the like. For a discussion of this issue, see Larry F. Darby, Jeffrey A. Eisenach, and Joseph S. Kraemer, The CLEC Experiment: Anatomy of a Meltdown (Wash- ington: Progress and Freedom Foundation, September 2002), pp. 10-15. 8. CTIA, Semiannual Wireless Survey (www.wow-com.com/industry/stats/surveys/ [2003]). The CTIA publishes total inve