st be taken into account in any vertical analysis. As the FCC noted, regulations designed to prevent vertical exclu- sion by drawing a distinction between transmission and enhanced services were preventing the realization of certain technological efficiencies resulting from inte- grated provision of broadband services. Indeed, the Computer Inquiry rules were based on the now outmoded belief that "because computer processing occurred at the network's edge or outside the network, the major innovation would occur there too." The rules thus "reflect[ed] a fairly static picture of network development, and an assumption that a line could be drawn between the network functions and computer processing without impeding technological innovation." Technology had invalidated this distinction. Indeed, in the current environment, "[i]nnovation can occur at all network points and at all network layers as well as in non-network appli- cations and equipment. Continued application of the Computer Inquiry rules would prevent much of this innovation from occurring" (FCC 2005d, p. 14890). The industry is thus structured in such a way as to mitigate last-mile broadband providers' ability to engage in vertical exclusion. Continued measures designed to prevent vertical exclusion thus only imposed regulatory costs, deterred innovation, and threatened to prevent the network from evolving toward new architectures that Networks in Telecommunications depend on a tighter integration of the network's functionality and its transmission capabilities. 4. Managed Competition Scholars commenting on the cable television industry have sometimes expressed concern about the ruinous competition that would result from "overbuilding," in which a second cable company would enter into an area already served by an incumbent cable company and begin to compete with it (see, e.g., Johnson and Blau 1974; Smiley 1989). The concern was that the duplication would lead to higher rates. Judge Posner echoed these concerns in a 1982 opinion upholding a city's decision 