ated to their boundaries. The economy's communications depend on the boundaries of individual networks and their interconnections with retail customers, wholesalers, competitors, and partners who use network elements and content providers who depend on platform access. Finally, the interconnections between networks themselves determine the form of the economy's overall communications network. This is a special case of a much more general issue, namely, what determines the boundaries of the firm? The answer was first given by Nobel Prize winner Ronald Coase (1937, 1988, 1994) and is the foundation for the New Institutional Economics. The theory of the firm in the presence of transaction costs can be specialized to address the boundaries of networks. Network connections are internal to the firm when the organizational costs of managing the connection as part of a network are less than market transaction costs. Network connections are external to the firm and take the form of access when the organizational costs of managing the connection as part of a network are greater than market transaction costs. Consider first retail access. Networks do not vertically integrate with buyers because retail access for final customers is a product of the network, yet even these connections have internetwork aspects. Households and business customers of The Structure and Functions of Networks telecommunications networks often have internal communications networks. The division of the network between retail customers and the network provider depends on the relative size of the costs of managing network connections internally and transaction costs of external connections. Wholesale access is provided when the network owner finds the organizational costs of conducting retail sales greater than the market transaction costs of dealing with independent wholesalers. Unbundled access is provided when the network owner finds the organizational costs of managing particular nodes and links in the network to be greater than the transaction cos