 regulators can use a discounted cash-flow analysis to determine the present value of the income that the input is projected to earn. Because the earnings are based on the prices charged in the output markets, it is possible to apply this method even if the input being priced is not sold in any external markets. In addition, because the income capitalization approach is based on data derived from actual market transactions, it is still generally regarded as a reasonably reliable means for determining market value. 2. The Second-Best Solution in the Absence of External Markets If a market benchmark is not available, then an estimate based on the economic costs of providing the service may be necessary. Such an estimate should approximate the market value of all the inputs used to create and operate the network, with the understanding that the market price of network access may be greater or less than that estimate. Over time, the market price of access should reflect the economic cost of all of the inputs used to provide network services. In the short run, however, market prices may deviate from economic cost. If network access is scarce, the market price of access would likely be greater than the replacement cost of the network. Conversely, with a glut of network capacity or obsolescence of network technology, the market price of access would likely be less than the replacement cost of the network. For example, a glut in fiber optic capacity would likely reduce the price of access to below the cost of the network. Accordingly, it is important to distinguish the market value of a good from the economic cost of providing it. However, the economic cost of providing that good, properly estimated, provides a second-best alternative. The economic cost of producing a product or service equals the total opportunity costs of all the inputs used to produce that product or service. An input's opportunity cost refers to the value of the best opportunity necessarily foregone, that is, the return from the best alternative empl