mply a form of insurance against the possibility of information loss. The price of additional access should reflect the total demand for capacity, the cost of information loss, and the additional cost of capacity. D. Demand for Capacity: Substitutes and Complements The demand for network services that use transmission capacity is affected by the availability of substitutes and complements. There are many substitute forms of transmission capacity that compete in the marketplace, including traditional telephone service, mobile telecommunications, broadband cable, and broadband telephony. Because different forms of transmission capacity potentially provide distinct types of services, a greater variety of services can increase total demand for telecommunications capacity. Individual network firms may experience reduced demand as a result of competition from substitutes. However, the benefits from a greater variety of services are likely to increase total demand, thus leading to greater provision of capacity by network firms. There are also many complements to transmission capacity. After all, the demand for transmission services is a means to an end, as we have already empha- sized. Consumers demand transmission services based on the demand for the Pricing Network Services communication made possible by those transmission services. The complements to transmission services are the services that are the content of communications. It is useful to view some services that are provided through transmission capac- ity as complementary to transmission services. Thus, the services of networks are complements to the information, entertainment, transactions, and other services that are sent over the network. The demand for network services is affected by the prices of complements. Higher prices of complementary services can reduce the demand for network services. Greater availability of complementary services increases the demand for network services. As the availability of complementary services increases - say there are more 