rictions on Home Networking Another practice that has drawn the ire of network neutrality proponents is restric- tions on home networking, either prohibiting home networking or charging those who connect more than one computer to the network more for their service. Restric- tions on home networking may make sense for reasons similar to those justifying restrictions on the resale of bandwidth. Home networking technologies permit multiple computers to access the Internet through a single connection. This would be unproblematic under usage-sensitive pricing, because each subscriber would be forced to compensate the network owner and other users for the additional contribution to network congestion. The situation is quite different if transaction costs make it more economical for network owners to rely on flat-rate pricing. In that case, the network owner sets the flat-rate price SO that it equals the congestion costs imposed by the average subscriber. Calibrating this price becomes significantly more difficult if the number of computers attached to any link varies, because bandwidth usage will vary from customer to customer depending on the number of computers attached. Further- more, the absence of any restrictions on the number of computers attached to a single connection can give rise to an adverse selection problem, as high-volume end users take advantage of information asymmetries to consume greater network resources without paying any additional compensation (Lee 1991). The Regulation of Broadband Networks and the Internet The result will be to increase the flat rate charged, which simultaneously excludes some users from access and forces low-volume users to cross-subsidize those who place more intensive demands on the Internet. It should thus come as no surprise that network owners have experimented with prohibiting home net- working or charging those attaching multiple computers more for their service. Such an approach is perfectly sensible when viewed through the lens of congestion economics. 3. Restriction