How do network owners make decisions about network creation and configuration? This question is critical for public policy, particularly compelled access to networks. The answer is more complex than it might appear at first blush. First and foremost, private companies create networks by designing network architecture and investing in network facilities. Second, private companies create larger networks by interconnecting with other networks through contracts and physical facilities. Third, consumers help to shape networks by decisions about what types of network services to purchase. Fourth, suppliers of complementary services affect networks by the types of products they invent and sell. Thus, networks come from supply decisions by network providers, interconnection between networks, demand decisions by network customers, and supply decisions by providers of complementary services.

The regulatory actions of public policymakers can have a significant impact on supply, demand, vertical integration, and access decisions. The law of unintended consequences can make these impacts difficult to predict. Regulations that constrain access prices below market rates or compel access reduce incentives to invest in network facilities, while at the same time stimulating demand for network services. Regulatory price constraints and compelled access requirements will not be responsive to increases in market demand, in contrast to market prices, thus further lowering incentives to invest. Also, access price regulations and compelled access can distort interconnection decisions and affect access agreements between companies that build and operate networks.