se caveats are not relevant to the network neutrality debate. 8 One caveat that is applicable, however, is that the standard result depends on the assumption that exclusion and metering are costless. A literature has emerged relaxing this assumption and exploring the results that obtain when metering and exclusion require the incurrence of transaction costs. It draws on the insight that someone buying ten units of a good is indifferent between a price of $1 per unit and a $10 entry fee with a ten-unit limit per customer. In other words, the equilibrium under usage-sensitive pricing can be replicated by charging a flat-rate price set equal to the unit price under usage-sensitive pricing times the optimal number of units consumed. Given the identity of these two pricing mechanisms, providers are free to choose the pricing regime that imposes the fewer transaction costs. Thus, if the transaction costs of metering and exclusion are sufficiently high, charging a flat-rate price based on the contribution to congestion by the average club member may well prove economically superior to usage-sensitive pricing (Barro and Romer 1987; Helsley and Strange 1991). 8 For example, as a purely formal matter, a club good equilibrium is only stable if dividing the overall population by the optimal club size results in an integer. When that occurs, the solution is said to be in the core, which in turn implies that the equilibrium is Pareto optimal, in that no individual or set of individuals can improve their situation by forming a different club. A noninteger result destabilizes the equilibrium, however, because anyone excluded from club membership will have the incentive to attempt to bid his or her way into a club by offering to accept a lower payoff than a current club member. The result is a constant shuffling of club composition. See, e.g., Pauly (1967). Fortunately, the introduction of a concept known as the approximate core renders the nonexistence of an equilibrium less problematic than initially appears. If the number of c