tability theory draws on the insight that high fixed costs need not inexorably lead to natural monopoly SO long as a new entrant can resell the assets that it has to purchase should it have to exit. So long as fixed costs are not also sunk costs, any attempt by an existing player to charge supracompetitive prices will only invite hit-and-run entry by firms that gather the available profits and depart as soon as competition drives prices down to com- petitive levels. Contestability theory underscores a critical difference between wireless and wireline transmission technologies. Because telephone wires have historically been useless for any other purpose, fixed cost investments in telephone wires can properly be regarded as sunk and thus a potential source of market failure. The same is not necessarily true for the infrastructure needed to construct a wireless transmission network. Wireless technologies require equipment located on transmission towers as well as the legal right to use particular portions of the electromagnetic spectrum. Because alternative uses exist for both of these assets (either by other wireless Network Regulation Basics telephone providers or by providers of wireless broadband or other spectrum-based services), investments in wireless network technologies are less likely to be regarded as sunk costs and thus less likely to give rise to the market failures associated with natural monopoly. The tendency toward natural monopoly created by the fixed costs is also sub- stantially mitigated by the decommodification of telecommunications technolo- gies and the increasing differentiation among the services provided by different network providers (Yoo 2005). It has been recognized since Edward Chamberlin's seminal work on monopolistic competition (1962) that product differentiation can allow markets to reach equilibrium with multiple producers each producing on the declining portion of the average cost curve. In other words, SO long as products are differentiated, the existence of unexhausted economie