 his partial concurrence and dissent in Verizon that compelling incumbents to share the cost-reducing benefits of a successful innova- tion destroys the incumbent's incentives to innovate in the first place (535 U.S. at 550-51). As we shall discuss in greater detail in Chapter 9, in Trinko a majority of the Supreme Court later embraced Justice Breyer's concerns about access requirements' impact on the incumbents' incentives to invest in their networks. The concerns identified by the Supreme Court underscore the extent to which access requirements require regulators to strike a very delicate balance. If access prices are set too high, no one will avail themselves of the opportunity, and mandat- ing access will simply impose costs without providing any corresponding benefits. If access prices are set too low, new entrants will forego facilities-based investment and will instead simply take advantage of the pricing offered through regulation. Investment distortions can be avoided only if access prices are set at the precise level that would mimic competitive outcomes. Establishing those prices is extremely difficult in the absence of external, unregulated markets that can serve as bench- marks and when regulators are dependent on the regulated entity for most of their information, as is often the case in local telephony. The pricing challenges are likely to be particularly problematic in industries that are technologically dynamic. A growing empirical literature confirms that rate regulation has deterred entry by new competitors (Abel 2002). In addition, access regulation has largely failed to 27 This order was affirmed on judicial review (S. Pac. Commc'ns Co. V. FCC, 682 F.2d 232 (D.C. Cir. 1982)). Networks in Telecommunications serve as a stepping stone toward full facilities-based competition (Ros and McDer- mott 2000; Eisner and Lehman 2001; Zolnierek et al. 2001; Crandall et al. 2004; Pindyck 2004; Hausman and Sidak 2005; Hazlett 2006; Quast 2008). The conse- quence is that a growing number of advocates who pre