ing economics (Lopatka and Page 2001; Thierer 2005; Owen and Rosston 2006). Networks in Telecommunications A. The Economic Case for Network Diversity The existing debate has largely overlooked how product differentiation can amelio- rate both the supply-side scale economies associated with high sunk costs and the demand-side scale economies associated with network economic effects. In other words, increasing the number of dimensions along which networks compete can allow smaller producers to survive despite having lower sales volumes and higher per-unit costs. Allowing network owners to differentiate their networks can also better satisfy the increasing heterogeneity of end-user demand. Restated in terms of the Internet, network diversity might make it possible for three different last- mile networks to coexist: one optimized for traditional Internet applications such as e-mail and Web site access; another incorporating security features to facilitate e-commerce and to guard against viruses, spam, and other undesirable aspects of life on the Internet; and a third that prioritizes packets in the manner needed to facilitate bandwidth-intensive, time-sensitive applications such as streaming media and virtual worlds. Each would survive by catering to the market segment that places the highest value on a particular type of service. Extended to its logical conclusion, this analysis suggests that public policy would be better served if Congress and the FCC were to embrace a "network diversity" principle that permitted network owners to deploy proprietary protocols and to enter into exclusivity agreements with content providers. Preventing network own- ers from differentiating their offerings would forestall this process. In other words, standardization on TCP/IP would have the effect of narrowing the dimensions of competition, forcing networks to compete solely on the basis of price and network size. The commodification of bandwidth would foreclose one avenue for mitigating the advantages enjoyed by the largest players.