, instant messaging, and per- haps even voice over Internet services. The shift of long-distance service to wireless can be further demon- strated by the trend in household expenditures. Between 1995 and 1999, the average household's long-distance carrier bill fluctuated between $250 and $300 a year (see table 6-3). Beginning in 2000, however, the average residential long-distance bill began to plummet, falling by nearly one-half in just three years. At the same time, the average wireless bill rose at an average annual rate of 19 percent despite the sharp drop in wireless rates after 1998. As noted earlier, this increase in wireless spending reflected the rapid rise in wireless use, much of which must have been long-distance usage. Given the continuing sharp decline in long-distance rates, the slow- ing of the decline in access charges, and the substantial loss of minutes to wireless carriers, it can hardly be surprising that long-distance carrier prof- its and stock prices have plummeted. The effect of wireless and Bell company competition on long-distance rates may be estimated through an analysis of monthly data from the con- sumer price index (CPI) for residential long-distance service. Consistent data are available from January 1998 through June 2004 and include observations that antedate the wireless national pricing plans and Bell company entry into long distance. A simple linear regression of this CPI index, deflated by the CPI for all items, on wireless minutes a month and the number of subscriber The Death of Distance and of the Long-Distance Carriers lines in states in which the Bell companies had received approval to offer interLATA service finds both variables statistically significant. 23 The results suggest that the rise in average cellular minutes a month from 136 in mid- 1998 to 507 in mid-2004 caused about a 30 percent reduction in residential long-distance rates. Bell company entry reduced rates by an estimated 7 per- cent between March 2000 and March 2004. Thus restricting Bell company entry i