ongoing involvement in the standard-setting process. At a minimum, the lag inherent in any standard-setting process and the effort needed to change stan- dards are potential sources of transaction costs. Even worse, to have any beneficial effect, the standard-setting authority must intervene at an early stage in the technol- ogy's development, when such judgments are hardest to make (Bresnahan 1999). As such, it may demand a level of technical expertise and ability to anticipate subsequent developments that exceeds the standard-setting body's institutional capability. At the same time, nonstandardization creates transaction costs of its own. In the absence of a standardized interface, customers and providers of complementary services would have to expend considerable resources determining the compatibility of various services. It cannot be determined a priori which set of transaction costs would be larger. 5. Unbundled Access Under the 1996 Act, ILECs must provide CLECs with unbundled access to their network elements and allow the collocation of CLEC equipment. Contrary to popular parlance, CLECs do not buy UNEs from ILECs; they lease facilities, such as lines, switching, or transport. Put differently, CLECs purchase the services of UNEs, SO some capacity of an individual UNE owned by an ILEC is devoted to providing services to a CLEC. Thus, UNEs are unbundled contractually, not physically, because they remain bolted in place as part of the existing network. Providing unbundled access entails transaction costs for the incumbent network firm. The network firm faces two broad categories of transaction costs. First, it incurs organizational costs associated with providing unbundled access to its network to fulfill its side of the transaction. Second, it incurs costs of transacting with the competitors who are purchasing the newly created unbundled services. Economic Effects of Regulating Access to Networks The 1996 Act requires ILECs to provide unbundled access to network elements "at any technically feasible point"