on Retail Access Wholesale Access Interconnection Access Platform Access Unbundled Access D. The Possibility of Regulatory Arbitrage E. Markets and the Design of Networks Pricing of Access to Networks A. The Economic Case for Market-Based Pricing of Network Access 1. Market Prices, Regulated Prices, and Efficiency The Difference between Market Prices and Unit Costs Determining Market Price 1. Pricing Based on External Market Transactions 2. The Second-Best Solution in the Absence of External Markets The Efficient Component Pricing Rule Contents C. The Consistency between Network Costs and Market Pricing 1. Economies of Scale and Scope 2. Sunk Costs D. Regulatory Approaches to Setting Rates in Regulated Industries 1. Direct Cost 2. Excess Capacity and Zero Opportunity Costs Constitutional Limits on the Pricing of Access to Networks The Distinction between Physical and Nonpossessory Takings 1. The Emergence of the Nonpossessory Takings Doctrine 2. Loretto and the Distinction between Physical and Regulatory Takings Florida Power and the Distinction between Physical Takings and Confiscatory Ratemaking 4. Toward a Possible Synthesis of Regulatory Takings and Confiscatory Ratemaking Doctrine The Importance of the Shift to Access Regulation Physical Takings Jurisprudence Applied to Network Access 1. Determining Whether a Taking Has Occurred 2. Determining Just Compensation 3. Partial Takings of Utility Property PART III. POLICY APPLICATIONS 8. The Regulation of Local Telephone Networks A. The History of the Regulation of Local Telephony 1. Early State and Federal Regulation and the Communications Act of 1934 2. The Emergence of Competition in Complementary Services The Emergence of Competition in Local Telephony 4. The Telecommunications Act of 1996 The Rationales for Regulating Local Telephone Networks 1. Natural Monopoly 2. Network Economic Effects 3. Vertical Exclusion 4. Managed Competition C. The Different Types of Access to Local Telephone Networks Retail Access Wholesale Access Interconnection Access Platform Acc