of other goods and services, pricing it below market rates can cause competitors to make inefficient decisions about which markets to enter. Below-market pricing may mislead competitors into believing that the benefits of serving a particular market exceed the costs by understating the true economic costs associated with entering Pricing of Access to Networks that market. The result not only creates allocative inefficiency in the primary market by stimulating excess demand for network access; it also creates secondary distor- tions in the markets for other inputs by increasing or reducing demand for those inputs. To the extent that the suppliers of access are regulated utilities, customers as well as the utilities will bear the burden. In addition to impeding allocative efficiency, regulated pricing can also impede dynamic efficiency.4 Pricing access at below-market levels discourages existing net- work owners from investing in additional network capacity. At the same time, it also discourages competing companies from investing in alternative capacity, including substitute network technologies. This effect underscores the extent to which access requirements represent a policy anomaly. The central focus of competition policy is to prevent monopolies from emerging and to break them up whenever they occur. Access requirements, in contrast, leave the bottlenecks in place and instead simply require the monopolist to share its facilities. In addition, by rescuing com- peting firms from having to supply the relevant input for themselves, compelled access destroys the incentive to invest in alternative network technologies and thus deprives providers of emerging substitute technologies of their natural strategic partners. As a result, compelled access can entrench any supposed bottleneck facil- ity by forestalling the emergence of alternative network technologies. This perverse effect is particularly problematic in technologically dynamic industries, in which the prospects of developing new ways either to circumvent or t