re the relatively low estimate of cross- price elasticity should probably be viewed as a lower-bound estimate of today's potential wireless-wireline substitution. Another problem in estimating the effect of relative prices on the choice between wireless and wireline access is that even though wireless rates vary enormously because of the myriad plans offered by the carriers, these plans The Rapid Growth of Wireless Telecommunications are essentially the same throughout the country. Therefore virtually every consumer in the United States faces the same prices for wireless service. Fortunately for this exercise-although not necessarily for consumers- local rates vary substantially across states and even within states. This vari- ance allows us to test for the effect of prices on the choice between a wire- less and a traditional wireline telephone. Using FCC semiannual data on wireless subscriptions across states, I tried to determine if wireless subscriptions are plausibly influenced by the level of wireline rates through a pooled time-series, cross-section regression of wireless penetration rates in December 2000, 2001, 2002, and 2003. 27 As independent variables I used the mean income per capita, the share of the population living in urban areas, and two fixed-wire price variables: the price of basic local residential service and average intrastate long-distance rates. The coefficient for the fixed-wire local price variable was generally significant when no year-specific dummy variables were included. 29 How- ever, when year-specific dummy variables are included in the regression, the coefficients on both price variables become statistically insignificant. Given the imprecision of the price data and the aggregated data being used, I simply cannot find a statistically significant cross-price elasticity of de- mand. Evidence on substitutability of wireless for fixed-wire service may be available elsewhere, however. For instance, it may be that individual households are disconnecting from wireline service and relyin