erse effect of rein- forcing both of these sources of market failure. 20 In other words, network neutrality can actually make matters worse by short-circuiting one of the most promising ways that smaller players use to survive when confronted with unexhausted returns to scale. If true, this raises the specter that network neutrality could be the source of, rather than the solution to, market failure. Allowing networks to differentiate themselves can also alleviate the economies of scale associated with declining average costs (Yoo 2003b, 2004a). It is the fact that price is the only dimension along which firms can compete that gives the largest players their decisive advantage. A different equilibrium can obtain if competitors are allowed to compete along dimensions other than price. If so, a smaller player may be able to survive notwithstanding lower sales volumes and higher unit costs (and thus higher prices) by tailoring its network toward services that a subsegment of the market values particularly highly. The greater value provided by the differentiation of the network allows a specialized provider to generate sufficient revenue to cover its up-front costs even though its volume is significantly smaller than that of the leading players. How could such differentiation occur in the context of broadband? One way is through protocol nonstandardization, such as through the adoption of a different routing protocol. As discussed above, all protocols necessarily favor certain appli- cations over others. If discrete subgroups of end users place sufficiently different valuations on different types of applications, multiple networks will be able to coex- ist simply by targeting their networks toward the needs of different subgroups (Yoo 2004b). If demand is sufficiently heterogeneous, the greater utility derived from allowing consumers to access consumer services that they value more highly can more than compensate for any cost disadvantages resulting from the reduction in 20 For a preliminary sketch of this argument, 