 about $1,300 per line at the end of 2002. 36 By the end of 2003, the surviving CLECs were valued at only about one-quarter Local Competition under the 1996 Act Figure 4-3. Local Telecom Company Stock Prices, 1996-2004 Index, February 1996 = 100 CLECs Bell companies Source: Author's calculations and www.quote.yahoo.com. of all listed CLECs' cumulative capital expenditures since 1996.37 The equity markets reacted harshly when it became clear that these companies are not likely to grow very rapidly in the foreseeable future. As discussed in the next section, the long-distance carriers (IXCs) also plummeted in value, whereas cable and regional Bell operating companies (RBOCs) experienced a more modest decline, generally outperforming the overall equity market. The telecom "meltdown" (see figure 3-2) therefore affected primarily the long-distance carriers, the wireless companies, the wholesale fiber suppliers, and the CLECs (the travails of the first two are examined in chapters 6 and 7). Subscriber Revenues One of the reasons why the CLEC market valuations shown in fig- ure 4-2 did not persist is that these new companies were unable to gener- ate revenue growth from their modest subscriber base. As the CLECs grew, their end-user revenues per subscriber fell steadily (see figure 4-4). Apparently these entrants were unable to attract many large business and institutional customers or to "cherry-pick" residential customers with large monthly bills. As a result, the CLECs' average annual end-user rev- Local Competition under the 1996 Act Figure 4-4. ILEC and CLEC End-User Revenues per Line, 1997-2003 Dollars/year ILECs CLECs Source: FCC, Telecommunications Industry Revenues, 2002 (March 2004); FCC, Local Telephone Competition: Status as of December 31, 2003 (June 2004). Revenues per line are equal to the full year's revenue divided by the average of December 31 end-user lines data for the current and preceding years. enue per line fell by more than $150 between 1997 and 2001, a period in which ILEC revenues per line inc