 classification of new communications technologies) will completely collapse. This combination of reductions in fixed costs and increases in the demand for network services has caused much of the telecommunications network to lose its natural monopoly (Spulber 1989, 1995). Wireless networks also involve fewer transaction-specific sunk costs in comparison with wireline networks because Networks in Telecommunications wireless networks are not linked to specific consumers. Multiple facilities-based providers now vie to provide telecommunications to large business enterprises. In addition, intermodal competition from different wireline and wireless technologies is having the same effect on the residential and small business market as well. 2. Network Economic Effects There is also reason to question theories that invoke network economic effects to justify regulation of network industries. Network effects need not create externali- ties. Network effects potentially create externalities only if network subscribers and the network provider somehow cannot internalize the benefits of network effects. In practice, network subscribers can address these benefits by coordinating their subscription decisions. In addition, network providers can internalize the bene- fits of network economic effects through pricing, service offerings, contract terms, marketing, and sales efforts (Spulber 2008a, 2008b). A review of the theoretical literature reveals that arguments that network eco- nomic effects inexorably lead to market failure are too simplistic. 22 Network exter- nalities arguments overlook the ability of private ordering to mitigate or eliminate any problems that may arise. These arguments based on network economic effects presume that those who adopt a new technology create benefits to those who are already members of the network that subscribers joining the network cannot inter- nalize. The usual inference is that network economic effects create an externality that favors incumbent network owners by locking the existing net