etail access plant, such as the local loop that services the household or the commercial establishment. The network firm still keeps track of each individual customer's usage of network services, such as the types of services chosen by the customer (e.g., call waiting, caller ID, call forwarding), as well as metering usage (such as time of day and duration of calls). When manufacturers hand off goods to retailers and wholesalers, they avoid all of the costs of distribution, such as transportation, storage, and operating retail stores, as well as the transaction costs of retail, such as marketing, sales, billing, and record keeping. This is not the case for network firms that provide wholesale access. Their internal systems still provide almost all of the information used for retail billing and record keeping. In addition, wholesale access is provided to competitors, which places additional demands on the record keeping of the network firm. The network firm must keep track of which customers have been retained and which customers purchase from the competitor, while still generating the same amount of retail service information that would be required without the wholesale access. Because Economic Effects of Regulating Access to Networks the information is used by the competitor to bill the final customer, the network firm must prepare the billing information for use by the competitor through electronic data interchange (EDI). This again creates transaction costs for the network firm. Thus, owing to the nature of network services, the advantages of outsourcing retail appear to be of limited value. The transaction costs of external retail, other than perhaps the initial signing up of customers, are likely to be higher relative to internal provision. Compelled wholesale access is inefficient if transaction costs of wholesale access exceed the cost of internal retail activities. To understand the complexity and difficulty of these activities, it is useful to consider operations support systems (OSS) in telecommunicatio