om and Bust Led to Glut of Vendors UNE-P Dominated CLEC Statistical Growth An ILEC-Friendly FCC Throws New Obstructions at Surviving CLECs The Triennial Review Order Fiasco ISPs Face New Survival Threat from Bush Reelection Role Reversal: States Become Champions of Competition Endnotes Focusing on the Bottom Line Asset Valuation is Risky Accounting Was Scandalous Investors and Entrepreneurs Played Each Other for a WorldCom and the Limits to Mergers AT&T Acted on Faith in WorldCom's Numbers Global Double Crossing New Services Need to Fit Into a Food Chain Competitive Realities Will Change Old Dinosaurs Die Hard The Next Big Thing Usually Is Not Endnotes List of Acronyms About the Author Index Preface The economic boom of the late 1990s included huge investments in the tele- communications industry and related sectors. It was followed by a downturn of unusual severity, which reduced total paper wealth by trillions of dollars, cost many thousands of jobs, and saw some of the biggest bankruptcies in history. While there certainly was a general business cycle at work, the downturn in tele- com was not just a cyclical correction, itself a healthy event that routinely shakes out the weakest players. The downturn was unusually severe, impacting many well-established as well as young companies; the price pressures that resulted from SO many distressed vendors then put an impossible squeeze on the profit margins of many of their stronger competitors. These conditions led investors to avoid anything remotely resembling telecom; the resulting capital squeeze fur- ther hurt the remaining survivors. This was not just a low point in the business cycle; it was economic metastasis, an epic failure, a full-bore meltdown. Analysts, reporters, and other pundits have frequently sought to identify the cause of the telecom industry crash. So have industry participants them- selves, both market participants and their regulators, eager to pin the blame on someone else. At the top of many commentators' lists is the Telecommunica- tions Ac