h any deviations from the cartel price. Even absent overt collusion, stan- dardizing products and increasing price transparency facilitates noncooperative oligopoly behavior as well. Retail access can also foreclose welfare-enhancing forms of price discrimination. When fixed costs are SO large relative to variable cost, as is traditionally the case in local telephone service, the average cost curve lies above the marginal cost curve over the entire industry output. Thus any price that allows the network owner to cover its costs necessarily creates some degree of deadweight loss. Discriminatory pricing regimes, such as Ramsey pricing (1927), can ameliorate this deadweight loss by allocating a larger proportion of the fixed costs to those customers whose demand is most inelastic and allocating a smaller proportion to those customers who are most price-sensitive. In fact, price discrimination can theoretically lead to efficient outcomes if fixed costs are allocated in perfect inverse proportion to elasticity of demand. Retail access can also increase transaction costs. Historically, many of the trans- action costs have been the direct costs of participating in the tariffing process. Retail access also increases transaction costs indirectly. As an initial matter, tariffing pro- vides incentives for competitors to challenge rates even when those challenges are unlikely to succeed on the merits. To the extent that retail access requires that all customers pay uniform rates for uniform services, it also limits network owners' ability to customize their offerings to the needs of particular customers. As noted earlier, retail access can also adversely affect the incentives for both incumbents and competitors to invest in network capacity. If retail access prices are set too high, they will have no effect. If retail access prices are set too low, competitors will find entry and expansion of their networks unremunerative, because the regu- lated price will dampen customers' incentive to change networks. At the same time, lo