uch of their revenue derived simply from reselling the incum- bents' services. As a result, the CLECs were a substantial drag on industry productivity growth between 1996 and 2002. To estimate the extent of this drag, I adjust the Bureau of Labor Statistics productivity figures for CLEC output and labor inputs. 80 As figure 4-8 shows, without the CLECs the fixed-wire sector's productivity growth would have accelerated, but at a lesser rate than that experienced by the wireless carriers (see chapter 3). One might argue that the discounted value of future gains could offset the $55 billion in additional capital expenditures made by entrants in 1996-2003, but given the collapse of many of these companies, it seems unlikely that entrant revenues will grow very much in the next few years. Surely these revenues would not defray both the capital charges and the additional SG&A incurred by the CLECs. In short, most of the cost of the 1996-2003 exercise in promoting local entry must at this point be written off as a failed experiment. This is not to say that competition will not emerge or has not emerged (see chapter 7). Rather, the competitors in- duced into the marketplace through 2003 by regulatory incentives de- signed to encourage resale in one form or another have not generated ben- efits that can justify their huge investments in facilities, start-up costs, and marketing expense. 81 Local Competition under the 1996 Act Conclusion The FCC no doubt attempted to implement the 1996 act with the best of intentions, hoping that its liberal "interconnection" policy would encour- age sustainable entry. In fact, a large number of entrants did appear, invest- ing at least $55 billion in capital facilities. Eight years later, few of these entrants remain viable. Entry has not reduced subscriber rates measurably, nor has it provided a notable increase in new services. 82 Local competition seems to be settling down to a battle between the incumbents, the cable television companies, and the wireless carriers. In chapter 5, I exa