een paying approximately $5 per month to US West. But the new rule hit the ILECs hard. Most had imputed zero cost to their own shared-loop ADSL to make it more competitive with cable, SO that became the monthly fee for CLECs using the HFE. (Sometimes a small administrative or testing fee could be added, but even that was often under a dollar.) CLECs were now able to compete for the consumer ADSL business. Another aspect of the FCC's ruling impacted collocation. The require- ment for cages was removed. Cageless collocation became available at a much lower price. A CLEC could now collocate a single rack; the typical nonrecurring cost for a single rack was around $10,000 and the monthly rent was under $100. (Power, however, could still cost several hundred dollars per month.) The early CLECs had already filled many of their collocation rooms with often nearly empty cages; cageless collocation not only lowered the price of admission, but it made space available for more CLECs than before. Capital Poisoning Led DLECs to Overexpand Covad had received a good reception from capital markets. Receiving ample venture funding, it went public in January 1999. But Covad was far from alone. Several other companies also received extensive funding to open DSL-oriented CLECs, and they were in a hurry to spend it. Northpoint, established in San Francisco in 1997, raced Covad to have coverage of the same prime markets. It also went public in 1999. And Colorado-based Rhythms NetConnections did the same, having both been founded and gone public in the same years as Northpoint. Both Covad-wannabees had ample capital from the best venture firms, which seemed to be impressed with their name-brand management. Northpoint was led by Liz Fetter, a Pacific Bell veteran, and Michael Malaga, previously with MFS WorldCom. Rhythms was led by Catherine Hapka, a well-placed former US West executive. And in the boom years, profits were not important; Northpoint's Malaga was quoted in 1999 as pooh-poohing a $100 million loss with a line that could be