to accusations of substantive biases, anticompetitive Economic Effects of Regulating Access to Networks MCA(Q) MC(Q) D(p,p) + A D0(p) Q* Q** + A Figure 5.5. The effects of unbundled access on costs and demand. activity, and capture. Platform access has the unfortunate effect of institutionaliz- ing centralized decision making at the expense of allowing decisions about network configuration to take place through a myriad of private choices. 5. Unbundled Access Unbundled access also represents incremental demand for network services that consume network capacity. Thus, unbundled access has effects that are similar to wholesale access. However, unbundled access has significant additional effects. Usage of a portion of the network's elements to provide services affects the perfor- mance of the network overall because the capacity of individual network elements such as lines and switches is limited. Usage of network elements potentially creates bottlenecks that generate congestion for the network overall. Congestion effects translate into increased costs if the network firm maintains quality of service. Because the network does not function as it was designed, the network firm must find a way to restore its functions by rerouting traffic and changing the network's configuration. To represent these effects, suppose that marginal cost MC(Q) increases to MCA(Q). This situation is represented in Figure 5.5. Thus, unbundled access shifts out the demand for network capacity while increasing the marginal cost of providing capacity. The result is that the equilibrium retail price increases to reflect both increased capacity usage from the outward shift in demand and increased cost from the upward shift in the marginal cost curve. There is greater crowding out of retail Networks in Telecommunications demand. In Figure 5.5, total capacity usage increases, because the demand effect outweighs the cost effect. However, total capacity usage may fall if the cost effect outweighs the demand effect. In that case, crowding out of retai