The effect that a non-smoking bar would be untenable (and would require a ban of smoking to exist) because the nonsmokers would want to go to the bars with the smokers in them (the smokers would not go into the bars that had a non-smoking policy even though THEIR friends were there for some reason) was negated because bars were forced to be smoking or non-smoking. Huh? A ban of smoking was NOT necessary for non-smoking bars to exist, the government didn't have to force them to choose the nonsmoking option over the smoking option (they just chose WHICH customer base they wanted to serve); and smokers DO go to non-smoking bars (even though they don't smoke inside) to hang out with their friends.
Network what?
I'll say it again - the 'network effect' in this case is a rationalisation for people that want to force their own choices on others.