role in generating efficient out- comes. 1 Some theorists have also suggested that network economic effects can turn network access into a competitive weapon (Katz and Shapiro 1985). 2 By refusing to interconnect with other networks, network owners can force subscribers to choose one network to the exclusion of others. The fact that each network's value increases with the number of subscribers connected to it provides a powerful incentive for new subscribers to flock to the largest network. According to this view, network economic effects create demand-side scale economies that can be a source of monopoly power. One oft-cited example of this phenomenon is the attempt by the Bell System to use its refusal to interconnect to combat the emergence of competition in local telephone service following the expiration of the initial Bell telephone patents in 1893. The hope was that refusing to interconnect with independent local telephone systems would protect the Bell System's market share by ensuring that it would remain the largest (and thus the most valuable) local telephone provider. 3. Vertical Exclusion The assumption that the telephone network was a natural monopoly gave rise to the related concern that the Bell System would use its control over the net- work to harm competition in vertically related markets. The specific concern was that telephone providers would discriminate against independent companies Thomas Schelling (1978) identified the effects of critical mass on many types of economic and social behavior (see also Leibenstein 1950). For an argument that network externalities turn telecommunications into a winner-take-all monopoly that should be regulated, see Melody (2002). Some economists apply similar argu- ments to suggest that the drag on the shift to new networks caused by these so-called network externalities can also cause markets to become "locked in" to existing technologies long after the arrival of new, more efficient network technologies (Farrell and Saloner 1986; Katz and Shapiro 1994). Netw