2002), the fact that application designers are waiting in the wings with ever more bandwidth-intensive applications dictates that there is no compelling reason to believe that bandwidth will necessarily increase faster than demand, especially in light of the fact that the number of potential connections goes up exponentially with the number of computers added to the system. In addition, decisions about capacity expansion can be difficult when facing uncertainty about the magnitude, heterogeneity, and variability of the demand that will be placed on the network. Decision making is complicated still further by the "lumpiness" of network capacity created by the indivisibility of fixed costs and the fact that increasing network capacity typically takes a considerable amount of time. In such an environment, it seems unrealistic to tie network owners' hands by limiting the number of ways in which they can manage network demand. An example from the early days of the Internet illustrates the point nicely. In 1987, end users began to rely increasingly on personal computers instead of dumb terminals to connect to what was then the NSFNET. The increased functionality provided by the shift to personal computers increased the intensity of the demands that end users were placing on the network. The resulting congestion caused terminal sessions to run unacceptably slowly, and the fact that fixed cost investments cannot be made instantaneously created an inevitable delay in adding network capacity. This is precisely the type of technology- and demand-driven exogenous shock that makes network management SO difficult. NSFNET's interim solution was to reprogram its routers to give terminal sessions higher priority than file transfer sessions until additional bandwidth could be added (Mackie-Mason and Varian 1995b). Indeed, such solutions need not be temporary: in a technologically dynamic world, one would expect the relative costs of different types of solutions to change over time. Sometimes increases in bandwidth would be cheaper