 affects network cost, capacity, and the Networks in Telecommunications reliability of the network. Either result will have an adverse impact on the efficiency with which the network owner can provide service. By externalizing the marketing functions, wholesale access can also increase transaction costs. At a minimum, wholesale access requires local telephone compa- nies that were not already offering wholesale access services to the public to establish new systems through which competitors can order wholesale access and to track the quantity of services being provided. Furthermore, according to the Coasian theory of the firm, discussed in greater depth in Chapters 4 and 5, network owners minimize transaction costs by internalizing functions if and only if the internal monitoring and organizational costs associated with producing a particular input internally are lower than the transaction costs to contract for a particular service externally. Indeed, we see a wide variety of arrangements with respect to local telephone service. Consider the wireless telephone industry, for example. In some cases, wireless companies sell part of their output to consumers through propri- etary outlets, while simultaneously selling part of their output through independent retailers, such as Circuit City, Radio Shack, and Best Buy. In addition, some wireless providers voluntarily provide wholesale access to mobile virtual network operators (MVNOs), which buy network services wholesale and combine them with other services, such as customized handsets and priority placement of certain content, to provide a unique product for the customer. Wholesale access disrupts this balance by forcing local network owners to make their entire networks available at wholesale prices even when it is not transaction-cost-minimizing for them to do SO. Congress thought that this non-facilities-based competition made possible by wholesale access might be the only form of competition possible in many markets in which a facilities-based competitor was unlik