e carriers (CLECs) increased from about 1.5 million CAP lines to Local Competition under the 1996 Act Figure 4-1. U.S. Local Competitors' Share of Access Lines, 1997-2004 Percent of U.S. access lines Total Own Net UNE-P UNE-loop Resale Year and quarter Source: FCC, Local Telephone Competition: Status as of December 31, 2003 (June 2004). 2.4 million total entrant lines. Thereafter the pace accelerated, and by the middle of 2004 entrants had 32 million lines, or about 17.8 percent of all switched access lines (figure 4-1). Network Strategy More than two-thirds of the growth in CLEC lines since June 2000 is attributable to resale, including traditional, total service resale and the lines leased as UNE-P (figure 4-1). As might be expected, the share of CLEC lines represented by traditional resale has not grown appreciably since the end of 1999. The 15 to 20 percent gross margins available to the entrants from this form of entry are not very attractive. However, the use of the UNE-P has soared, in large part because entrants have been able to gain access to the entire platform at low TELRIC rates or even less without hav- ing to make any capital expenditures. 16 This use of the entire incumbent's network is, in essence, resale at discounts of 50 percent or more, providing potentially very attractive margins for arbitrageur-entrants (see table 4-1). Local Competition under the 1996 Act Table 4-1. Arbitrage Margins Available in Bell Company Territories, 2002 Average wholesale Average retail UNE-Prate revenues/line Company (dollars/month) (dollars/month) BellSouth 23.10 53.69 16.55 51.23 Verizon 19.40 42.49 Qwest 22.94 51.10 Source: Anna Maria Kovacs, Kristin Burns, and Gregory S. Vitale, The Status of 271 and UNE Plat- form in the Regional Bells' Territories (Commerce Capital Markets, November 8, 2002). As a result, by the end of 2003 nearly two-thirds of all entrants' lines reflected little more than the resale of the incumbents' services. 17 Before 2001 the share of CLEC lines served by their own facilities had been g