ges were twenty to thirty times higher than the current cost-based interconnection rate, providing enormous incentives for long-distance carriers to attempt to circumvent interstate switched access. This circumvention could occur legally through the leasing of dedicated "special access" lines to large customers or illegally by attempting to pass off interstate traffic as local traffic. 8 Since the shift from switched access charges to special access during the 1990s, at least one carrier, MCI-WorldCom, has been accused of divert- ing interstate traffic to other channels through which it could avoid switched access charges. If this were true, the FCC's calculation of inter- state rates would be biased upward after 1991 because it would have used a downward-biased series on switched access minutes in the denominator of the calculation. The Death of Distance and of the Long-Distance Carriers Figure 6-1. Actual versus Predicted Wireline Interstate Terminating Switched Access Minutes, 1992-2002 Billions of minutes/year Access Wireless Predicted diversion diversion adjusted begins? begins Predicted Actual Source: FCC, Telecommunications Industry Revenue Data, 2002 (March 2004); Bureau of Economic Analysis (GDP); author's calculations. To obtain a rough measure of the extent of this potential bias, I relied on FCC reports of the real average revenue per interstate conversation minute, population data, and real GDP. From this I simulated terminating interstate switched access minutes (that is, the number of minutes that the local car- riers billed for completing ordinary interstate calls) for the period since 1992 based on movement in real prices, real GDP, and population. 10 The result is shown in figure 6-1. Note that the predicted and actual minutes track each other closely through 1996. Thereafter the series begin to diverge, with the predicted number of switched access minutes exceeding reported minutes by 2.5 to 6.9 percent in 1997-99, just before wireless competition for long- distance minutes begins in earnest. 1