ong the pipeline, the diameter of the pipeline, and the thickness of the steel used to make the pipeline. 9 For further discussion of these engineering aspects, see Chenery (1949). Networks in Telecommunications The rate of throughput or capacity utilization depends on the compression ratio, which is the ratio of the initial pressure to the terminal pressure. The amount of capital facilities, represented by the amount of steel to build the pipeline and the number of compressor stations, can be summarized by a variable L that represents the amount of capital equipment. The set of supply and delivery nodes is N = {1, 2}, which implicitly specifies the distance. Finally, operation of the compressor stations and the nodes requires an input of energy Z to drive the gas through the pipeline. The energy required depends on the ratio between the initial pressure and the terminal pressure and the amount of throughput. Let Q represent throughput as measured in millions of cubic feet of gas per day per thousand miles. The production technology is summarized by Q=F({1,2},L,Z). Increasing throughput can be achieved by adding to the capacity of the pipeline L by increasing its diameter or the number of pumping stations. Alternatively, throughput can be raised by increasing the energy Z used for compressing the gas. Generally, a transmission pipeline system includes many nodes and many con- necting links, with miles of pipelines and multiple compressor stations forming a complex network. The integrity of such a network depends on its many component elements, which are optimized to form an integrated system. The operational con- trol structure of a pipeline illustrates the interdependence of the parts of a natural gas transmission system. Pipelines operate central command posts that monitor information about the pipeline facilities and transmit operational orders directly to automated equipment and to maintenance personnel. The gas control operator receives information transmitted by telephone, microwave, or satellite. The sys- 