, actual costs do not lend themselves to such neat separations of fixed and variable costs or to such clear attributable costs. Accordingly, allocating nonattributable costs is likely to be an exercise in regulatory accounting that bears little relation to market prices. In the FCC's TELRIC system, each component that constitutes part of a network, such as a switch or a line, can be assigned a specific cost equal to its replacement cost. Any joint costs can be arbitrarily broken up and assigned to all of the elements. If such a system were accurate, the cost of a network would be independent of its configuration. This is impossible, because varying a network's configuration affects its performance. A network's configuration thus affects the production function relationship between the network's output and its inputs. Thus, the network's cost function also reflects its configuration. It is therefore not possible to divide a network's costs among its components in a meaningful way. 2. Long-Run versus Short-Run Costs Of course, the expenditures needed to establish, operate, and maintain the net- work can be separated into their components. These are purchase prices times the purchased amounts of individual components. In this sense, perhaps, the cost of components is easily identified based on market prices. Thus, there are market prices for switches or fiber optic equipment offered by original equipment manufacturers (OEMs). However, once they are integrated into a network, a fundamental change takes place in the effect of inputs on cost. Access to an unbundled component is not provided by unbolting or disconnecting the component and reselling its services. Were that the case, market prices would provide a good guide to value. The problem is that unbundled access is provided in situ; that is, access to the element is provided while it is a functioning part of the network. The costs of access then include (1) recovery of the costs that were incurred in including the component in the network, (2) the costs of making 