ises when some exogenous force disturbs an equilibrium. In chemistry, the Le Chatelier principle (Le Chatelier 1888) states that "Every change of one of the factors of an equilibrium occasions a rearrangement of the system in such a direction that the factor in question experiences a change in a sense opposite to the original change." Newton's third law of motion, which states that "for every action there is an equal and opposite reaction," provides an analogous principle to physics. The Le Chatelier principle is used in physics as well. Paul Samuelson (1947) recognized this principle in his development of comparative static analysis in economics. Economic Effects of Regulating Access to Networks Consider the basic capacity and configuration decision faced by the typical network firm. Let the expected retail demand for network services be given by Q = De(p), and let the actual retail demand for network services be given by Q = Da(p). The network firm will configure its network with capacity K, where K equals the profit-maximizing quantity given the expected demand. The variability of demand makes capacity decisions particularly complicated. Peaks in network traffic can saturate portions of the network, which in turn causes queues to form and the quality of network service (in terms of throughput rates) to degrade. As a result, network owners must calibrate their networks to handle the peaks plus an additional margin to serve as insurance against unanticipated variability in demand. The amount of excess capacity will depend on the tradeoff between network cost and reliability. Clearly, information about the expectations for the magnitude and variability of traffic flows play a critical role in setting network capacity. The price that rations retail demand before access regulation is p*, which solves De(p*) = K. Suppose that regulatory authorities cap retail prices below p*. In that event, demand will increase along the demand curve to the point where it exceeds the available capacity. The natural response is for t