y capital spending and UNE-P rates. Therefore this regression analysis offers little support for the theory that UNE-P rates have affected Bell company capital spending. A more direct approach to estimating the effect of competition from com- petitive local exchange carriers (CLECs) on Bell investment would be to insert the actual measure of CLEC market share directly into the investment equation instead of its proxy, the UNE-P rate. If Bell companies adjust their investment plans to variations in the UNE-P rate because they anticipate that low UNE-P rates will lead to more competition, this effect could be modeled more directly by using the actual CLEC share of lines rather than one of the contributors to it, the UNE-P rate. The Federal Communications Estimates of Bell Company Cumulative Expenditures Commission publishes data on the entrants' market shares, but in its early reports it withheld the data for a large number of states. In its report on the extent of local competition at the end of 2002, it published these data for thirty-eight states. 4 When I use this measure of competition as a substitute for the various measures of the UNE-P rate, as reported in the last section of table A-3, I find no statistically significant effect of entrant market share on Bell company investment, all things being equal. Notes Notes to Chapter One 1. The Telecommunications Act of 1996, 47 U.S.C. 229. 2. The United States had begun to liberalize telecommunications in the 1960s and 1970s, but the 1996 statute was designed to complete the task. A few other countries, such as the United Kingdom and Japan, began to liberalize their telecom sectors in the 1980s, but none other than New Zealand had as extensive a liberalization policy as the United States. New Zealand deregulated telecommunications in 1989 but has since moved back in the direction of regulation. 3. Most notably, Reed Hundt, chairman of the FCC during the first two years of imple- mentation of the 1996 act, claims that the FCC's decisions during this period "have he