elecommunications network demand. As a result, its net impact on the demand for network resources is ambiguous. Network owners depend on forecasts of demand when deciding on the configuration that provides the greatest capacity and the optimal level of reliability at the lowest cost. The ambiguous impact of unbundled access on network demand makes such forecasts considerably more uncertain. The mandatory carriage aspect of unbundled access also prevents the network owner from protecting network performance by responding to any unexpected increases in demand by refusing to carry additional traffic. Unlike other forms of access, unbundled access has the potential to introduce flows deep in the heart of a network at points that may not represent natural points of interface with other providers. As a result, the pattern of flows associated with unbundled access often bears little resemblance to the pattern of flows for which a network was designed. In addition, as we noted in Chapter 2, tying up isolated elements of a network can cause network performance to degrade in ways that are often quite unexpected. Not only can it increase congestion in the portion of the network adjacent to the elements to which network access is sought; as our discussion of the max-flow/min-cut theorem illustrates, the fact that networks attempt to minimize such distortions by rerouting traffic through other portions of the network means that unbundled access can create new bottlenecks in areas of the network that are located far from the elements to which competitors obtain unbundled access. Thus unbundled access can adversely affect network performance in ways that are sharply discontinuous and unpredictable. Unbundled access can also greatly increase the transaction costs of network management. At a minimum, placing some of the traffic outside the network prevents the network owner from observing information regarding the magnitude and variability of network traffic directly. Instead, such information is only available from the network's