 manner in which they interact with one another. Even more impor- tantly, the recent upsurge in attention from economists has focused primarily on the phenomenon known as network economic effects, which occurs when a network's value is largely a function of the number of other users connected to it. 1 The problem with this approach is that it focuses on only one aspect of networks: their size. As a result, it is unable to provide insights into the relative benefits of different network architectures or the interrelationship among the various network components. Legal scholarship and the substantive decisions of regulatory authorities have proven similarly unhelpful. They have reflexively adhered to the cost-based ap- proaches associated with traditional rate regulation and have based access prices on the costs of particular network elements, with the primary policy issue centering on whether these calculations should be based on historical or replacement cost. Cost-based approaches violate one of the central precepts of economics by focusing solely on the supply side without providing a way to take demand-side consider- ations into account (Yoo 2003a). Even more problematically, by considering each component as if it existed in isolation, this approach fails to capture one of the cen- tral characteristics of networks, which is how the aggregation of individual network components into an integrated system causes them to interact with one another in complex ways. In the words of one noted network theorist: First, real networks represent populations of individual components that are actually doing something - generating power, sending data, or even making decisions. Although the structure of the relationships between a network's components is interesting, it is important principally because it affects either their individual behavior or the behavior of the system as a whole. Second, networks are dynamic objects not just because things happen in networked systems, but because the networks themselves are evolving and 