 transactions, or as a second-best alternative, adopt methods that base access rates on market prices. Because access transactions are central to the organization of network industries and the organizational structure of firms in those industries, competition and efficiency require unfettered access transactions. To summarize, we argue that the fundamental shift in regulatory approach toward compelled access demands an equally fundamental shift in the approach to setting prices. If there is to be public intervention in private access transactions, economic principles still dictate that access prices should be based on the market value of the incremental network services provided by the relevant input. In addi- tion, to the extent that compelled access to a telecommunications network requires that competitors be permitted to place equipment on the network owner's property, access requirements constitute physical takings for which market-based compen- sation must be paid. Although the unavailability of market-based determinants Introduction once justified basing prices on some measure of cost, the shift in regulatory policy (especially when combined with the emergence of direct, facilities-based competi- tion made possible by technological convergence) has caused the justifications for refusing to set rates on the basis of market prices to fall away. Although the absence of comparable transactions in external markets histori- cally led regulatory authorities to eschew market-based pricing in favor of cost-based pricing, platform competition and the shift to access regulation have drained this justification of its vitality. The emergence of direct facilities-based competition from alternative telecommunications networks has created market-based benchmarks that can serve as independent bases for setting rates. Contrary to the suggestion of some commentators, distinctive economic features of networks such as sunk costs, economies of scale and scope, and network economic effects do not alter this core conclusion. Our p