This research compares social welfare between unit fee and proportional fee on competing networks. We show that when demand is sub-convex or isoelastic, proportional fee welfare dominates unit fee, and the comparison is independent of the intensity of network competition. When demand is super-convex, however, unit fee dominates proportional fee if network competition is sufficiently weak. The dominance of unit fee becomes more likely when network competition weakens or if merchants must single-home. For competing networks, proportional fee is each network's dominant strategy, but often leads to a Prisoners' Dilemma that hurts not only networks but also merchants.