anded at a slower pace in these countries. This pat- Telecom Reform in Other Countries Figure 9-3. Growth in Real Spending on Communications Equipment, Selected OECD Countries, 1990-95 versus 1995-2000 Annual growth (percent) 1990-95 1995-2000 Source: Colecchia and Schreyer, ICT Investment and Economic Growth in the 1990s (2001). tern is reflected in an OECD study of the growth in real capital spending on communications equipment, which used an estimate of "harmonized" prices for such equipment across countries. The results are shown in fig- ure 9-3. With the exception of Finland, which emerged from a deep reces- sion in the early 1990s, all of the surveyed countries saw lower growth in communications capital spending in 1995-2000 than did the United States. The real growth rate was 50 percent greater in the United States than in Canada, France, Germany, Italy, and the United Kingdom. Between 1995 and 2000, U.S. telecom capital expenditures grew at an annual rate of 12 percent a year in current dollars, while nominal telecom output grew by only 6.4 percent. 44 For the previous eight years, output and capital spending growth were virtually identical (recall figure 3-3). Although the growth in capital expenditures was not as great in France, Germany, Italy, and Japan, investment surged in these countries also. The Telecom Reform in Other Countries subsequent collapse in investment spending after 2000 was at the heart of the 2001-03 crisis in world telecommunications The excessive surge in U.S. capital spending is notable. Had capital ex- penditures grown at a nominal rate of only 8 percent a year between 1995 and 2000, generating a real growth rate closer to that experienced in the other major OECD countries, the United States telecom sector would have spent $54 billion less on new capital equipment between 1996 and 2000. Capital spending by the largest long-distance companies rose from $10 bil- lion in 1996 to approximately $34 billion in 2000, while CLECs spent an estimated $43 billion over the entire period. Had