at the incumbents' rates have not moved in nominal dol- lars.65 Even if the entrants were offering local rates that were, say, 15 to 20 percent lower than the incumbents' rates, they would only have reduced the average local rate by 1.5 to 2.0 percent by 2002, assuming no corre- sponding decline in incumbent rates. The effect of this decline would only be sufficient to offset 16 to 21 percent of the effect of the FCC's increase in subscriber line charges. The FCC reported that competitive local carriers received $17.7 billion end-user revenues in 2003. 66 It also reported that the CLECs had 16.7 million small business and residential lines as of June 30, 2003. Given that the average residential subscriber spent $441 in 2003 on ser- vices from local carriers, the CLECs' small business and residential rev- enues may be estimated at $7.4 billion, leaving $10.3 billion in end-user revenues from medium and large business ("enterprise") customers. 67 Assuming that the residential and small business customers received dis- counts of 15 percent from the incumbents' rates, these customers saved $1.3 billion in 2003. 68 Given that these lines are likely to be delivered mostly through the UNE-P, there is no innovation in such a service, and residential and small business demand is extremely price inelastic. As a result, there is no increase in output to consumers. If the competitors' vari- Local Competition under the 1996 Act Figure 4-7. Producer and Consumer Price Indexes for Local Telephone Service, Constant Dollars, 1996-2003 Index, 1996 = 100 CPI local service PPI local business service PPI local residential service Source: Bureau of Labor Statistics, Consumer Price Index and Producer Price Index; Bureau of Eco- nomic Analysis, Gross Domestic Product (chain price deflator). able costs are no greater than the incumbents' avoided costs, an extremely unlikely assumption, the amount of noncapital resources devoted to these local services is unchanged, and there is no net welfare gain or loss to the economy other than the in