 transportation system that completes a circuit. It is also useful for a system of product distribution in which freight transportation completes a circuit between warehouses and retail outlets. The least-cost cycle network is shown in Figure 2.4. The least-cost cycle network is an integrated network not only because each link is needed to complete the cycle, but also as a result of the optimization decision. The network designer can have multiple alternative cycles to choose from, depending on the initial graph. Accordingly, regulatory decisions that increase the cost of individual links can significantly alter the configuration of the least-cost network. 4. Network Configurations with Economies of Scale in Links The characteristics of links, including the technology used for transmission, play an important role in determining the optimal network configuration. If there are sufficient economies of scale in links, the network designer may choose a network configuration that consolidates traffic. Again, the optimal network configuration is highly sensitive to the costs of links. Regulatory policy cannot treat links as separable from the network because the costs of individual links affect the choice of network design. To illustrate this effect, consider a network with n nodes that are located in two clusters. The network designer must choose between two network configurations. The network designer can create a star network by establishing a central hub and Networks in Telecommunications TC = an TC = cn + F Figure 2.5. One hub or two? The choice between a star network and a trunk line network. connecting all the terminal nodes with individual spokes. Alternatively, the network designer can create two hubs, one for each cluster, and connect them with a high- capacity trunk line. Choosing between the star network and the two-hub network depends on a comparison of the cost of the spokes in the star network and the cost of the trunk line. Suppose for simplicity that there is no difference between the cost of establishi