ods. Supplying capacity in one period means that it is also available in all other time periods without additional cost. Usage in one period does not preclude usage in another time period. Of course, usage of a network is not free, because there are operating costs, but the capacity that is available in one time period is essentially available without cost in other time periods. In the public goods litera- ture, the amount of the public good equates total marginal benefits to marginal cost. Access to network capacity is excludable, except of course when regulators compel access. The prices of access that support the efficient outcome are time-of- use prices: The price equals zero in periods of excess capacity Qt < K and is greater than or equal to zero in periods of full capacity Qt = K. Prices are positive when the capacity constraint is binding. The efficient solution equates the marginal cost of capacity to the sum of time-of-use prices: CC(K*). Because access is excludable, it is sufficient to post time-of-use prices in each period to gauge demand in each period. This differs from the public goods problem, in which individual users are asked how much they value the public good. As is well understood, there are incentives to free ride by understating demand, which results in underproduction of the public good because everyone free rides. Of course, simply asking users how much they value access in a particular time period would replicate the free rider problem. To illustrate the solution, suppose that the representative consumer has quadratic utility. Then the price in period t is positive if Pt = a-(bt+y) K* > 0. The efficient capacity level satisfies [[ie-(b,+y)K"]=C(K") prices are positive in all time periods. Otherwise, periods with excess capacity will not add to marginal benefits. Adding usage of the network even in off-peak times adds to the marginal benefits of capacity and therefore can require an increase in capacity. Thus, granting access to network services in off-peak times should not be viewed as