" shape of the cost curve in turn presupposed the existence of some local resource that was in fixed supply, such as a beach or the total amount of land available; otherwise, there would be no logical reason to limit community size (Tiebout 1956). Although Tiebout does not specify what causes marginal cost to increase, it is analogous to the congestion costs assumed by the club goods literature. The primary difference between club goods and local public goods is the feasibility of entry. The former assumes that entry by new clubs is possible. The latter assumes that the total number of municipalities is fixed (Scotchmer 1994). The Regulation of Broadband Networks and the Internet standard result is that reliance solely on flat-rate pricing will result in inefficiently high levels of congestion and in overconsumption of the club facilities (see, e.g., Berglas 1976, 1981; Scotchmer 1985). The intuitions underlying this result are quite straightforward. Economic wel- fare is maximized if the market reaches equilibrium at the point where the social benefits equal the social costs. In the case of club goods, this would occur where the benefits each club member derived from the last unit consumed equalled the costs of congestion created by the last unit consumed. The problem is that if club mem- bers are charged rates that are not sensitive to usage, the private cost of consuming an additional unit is zero. That means that utility-maximizing club members will increase their consumption of club resources until the marginal utility from any further increases in usage is zero, at which point the social costs associated with the last unit consumed will exceed the benefits, and welfare is reduced. In short, flat-rate pricing results in excessive consumption of club resources, which arises because the congestion costs represent a negative externality that individual club members responsible for causing the congestion are not forced to bear. The classic solution is to impose a usage-sensitive price that is equal to the conges