This article is concerned with the design of fault‐tolerant access networks for cost‐effective communications—deploying network links and service providers (SPs) at a minimum cost, while ensuring error tolerance ability via the ring architecture. Given a set of service subscribers (SSs) in an access network, we are required to determine the locations and capacities of service providers, and to establish network links in terms of rings connecting SSs to SPs. We pay link costs for ring constructions and pay management costs for selecting SPs with capacities sufficient to manage the SSs in their rings. The network design aims to minimize the sum of the link costs and the management costs. Two APX‐hard problems in the general network design are studied in this article to address the scalable and modular features of SP capacities. Despite the logarithmic inapproximability that we show for one problem, constant‐factor approximation algorithms are proposed to solve the other problem and its variant in quartic time. © 2009 Wiley Periodicals, Inc. NETWORKS, 2009