The paper uses standard concepts of equilibrium and efficiency to analyze certain properties of the telephone system. The property of access/no access plays a central role in the analysis, and it is suggested that many so-called "systems" in modern life have similar access/no access properties. The fundamental discreteness associated with access/no access is handled first in a static resource allocation framework. Also, the concept of transaction cost is brought into the analysis in relation to time budgets. It is shown that the conventional efficiency conditions of the theory of public goods do not hold. Alternative results are given and interpreted. A dynamic analysis of the demand for telephone service is then developed. Using a set of very weak assumptions, we prove, by induction, the existence of a self-sustaining growth process in demand. The underlying assumptions are weak in the sense that they imply stationary conditions: a constant population, with constant incomes, a stationary income distribution, and no change in relative prices. The growth process which nevertheless arises can be explained jointly by the distribution of income and by the public-good property inherent in the telephone system.