exception to the ICE theory. Regulated monopolies have the incentive and opportunity to monopolize related markets in which their monopolized service is an input. Under Baxter's law, a monopolist in a regulated industry is unable to capture the entire monopoly price since their prices are regulated. This monopolist will then seek to use its monopoly on one level of the market to expand into another level of the market, one where price is unregulated. Whereas the ICE theory would normally find this acceptable, Baxter's law explains that the monopolist can use its monopoly position in one level to capture a monopoly in another level, and then capture the monopoly price in this other level of the market. While normal monopolists would suffer losses in their first monopoly level that would offset the gains in the new market level, a regulated monopolist will suffer smaller losses in their first monopoly level due to price regulation, but will still have full gains in the market level, and therefore will seek to expand their monopoly. Example Baxter's law in Internet market: Baxter's law can be illustrated under the context of Internet market before the broadband age. As mentioned above, when the market for platform is subject to price and rate regulation, a monopoly of network provider holds strong incentives to monopolize an unregulated applications market (a downstream level market). For example, because the FCC have capped the price that telephone companies could charge consumers by using the telephone network circuit for Internet access, those companies are unable to extract monopoly profits from the platform. In other words, they are prohibited to increase charges and prices for the exclusive services which they provide in the market. As a result, these monopolies extend their business and service to unregulated markets. Comparing to rivals in these market, monopolies could offer lower, cost-based rates for the same service because of vertical integration. Therefore, the revenues earned in unregulated market can offset the loss due to regulation in monopoly market and increase overall profits. See also Network neutrality One monopoly profit References Jonathan E.Nuechterlein and Philip J. Weiser. Digital Crossroads-American Telecommunications Policy in the Internet Age. Cambridge, Massachusetts: The MIT Press, 2007. Paul L. Joskow and Roger G. Noll. The Bell Doctrine: Applications in Telecommunications, Electricity, and Other Network Industries. Stanford Law Review, Vol. 51, No. 5 (May, 1999), pp. 1249–1315. Joseph Farrell & Philip J. Weiser, ''Modularity,