Empirical Analysis of Entry in the Local Exchange Market: The Case of Pacific Bell*

This article examines local exchange entry in SBC's California territory. Analysis is conducted based on five‐digit zip code areas. Information on economic, demographic, and regulatory variables, including prices of unbundled loops, is included in the analysis. Results of censored Poisson analysis indicate that these economic, demographic, and regulatory variables play a statistically significant role in leading to higher probabilities of low levels of entry in areas where loop prices are higher, fewer large businesses exist, and costs of self‐provision are higher. (JEL L51, L96)