ndaries of networks and their pattern of interconnections follow a Coasian theory of networks. Network Proposition. Network connections take the form of access when organizational governance costs exceed market transaction costs. Network connections take the form of management transactions within the network when market transaction costs exceed organizational governance costs. Networks in Telecommunications Firms expand the boundaries of their networks to the farthest point where the incremental costs of management transactions do not exceed the incremental costs of access transactions. The theory of networks presented in this proposition will guide the discussion throughout the rest of the book. The proposition helps to analyze the extent to which companies that own networks are vertically integrated. These issues are a special case of vertical integration, but the implications for networks need to be fully explored. Competitive markets generate an efficient pattern of access and internal con- nections. In competitive markets, optimization by firms and efficient transactions should result in networks with efficient boundaries and efficient interconnections with users of the network. There should be efficient access transactions with cus- tomers, wholesalers, suppliers of complementary services, and competitors. Public policy interventions in markets for communications can be expected to affect the boundaries of networks and their interconnections. Understanding how markets generate efficient networks should prove useful in understanding the impact of public policies on the structure of networks and their pattern of interconnections. The efficient boundary of firms that operate networks is an important but particular case of the boundary of the firm. Networks provide wholesale, unbundled, and platform access when the organizational costs of managing the network are greater than market transaction costs. Networks are vertically integrated when market transaction costs exceed organizational costs. Thus, the efficie