to a manufacturer allowing another company to locate its equipment in the manufacturer's factory. Regulating access to inputs raises some of the same issues as regulating access to the services provided by the network as a whole. The best way to price access to inputs is to consider the market price of similar access. If a market benchmark for access is not available, it is necessary to resort to cost-based estimates of providing access to the input. It is misleading to assume, as does the FCC, that the cost to the network of providing the use of an input is confined to the direct cost of that input. 8 The input 7 This order was affirmed in part and reversed in part on judicial review (Southern Co. V. FCC, 293 F.3d 1338, 1346-47 (11th Cir. 2002)). As will be discussed in greater detail in Chapter 8, the FCC issued regulations requiring that prices for the unbundled access to network elements be based on each element's total element long run incremental cost (TELRIC). This cost notion corresponds with the direct cost that a manufacturer would incur in providing another company with the usage of a piece of capital equipment in the manufacturer's factory. It does not include any factors designed to capture opportunity costs. Pricing of Access to Networks part of a network, and accordingly, another company's use of a network component necessarily has an impact on the output of services using the network. The network element's capacity to provide network services is correspondingly diminished, thus reducing the output of services by the network itself. To take a simple example, a set of tires for an automobile may cost only $400, but allowing another motorist to use the tires precludes the owner using the automobile. The foregone value of the entire automobile might then be $20,000. In the same way, the cost of allowing competing telecommunications companies access to unbundled network elements depends not only on the direct cost of providing that element, but also on the indirect cost of removing the services of that