lowed to sell necessary inputs to their competitors at a price that reflects all costs, including opportunity costs. For further discussion, see Sidak and Spulber (1997a). For a model of competition with ECPR pricing, see Sidak and Spulber (1997c). Networks in Telecommunications markup in the opportunity cost component for both elements, as this would in effect allow the incumbent LEC to recover twice for the same markup. The retail markup could be divided among the various elements, but doing SO would require some method (probably based on cost accounting) for apportioning the markup to particular elements. While this problem is seen most clearly when the same competitor leases both elements, the identical problem would arise if two different competitors were to lease the same elements or even two different elements in the same chain of production. Although the allocation of foregone retail margin to particular components is inevitably arbitrary, such problems are endemic to any system of establishing prices for inputs. Apportioning the foregone retail margin should not prove any more intractable than the apportionment of common costs that must occur under any regulatory scheme that relies on compelled access (FCC 1996c). In any event, the pricing of the element should at least cover its direct incremental cost, to avoid cross subsidization. The market-determined efficient component pricing rule (M-ECPR) adjusts the calculation of opportunity costs by using a benchmark market price (if one exists), rather than regulated rates, for the incumbent firm's output. It is again likely that regulated rates for network services will not correspond to the market price of competing alternatives. Thus, the M-ECPR provides a method of adjusting access prices to reflect market prices of network services, thus promoting efficient allocation of network services as well as dynamic efficiency of investment decisions (Sidak and Spulber 1997a). Any regulatory method that bases access prices solely on production costs with- out taki