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This paper develops near-optimal designs of wireless networks in the presence of fading. The novel approach optimizes jointly application level rates, routes, link capacities, power consumption and physical layer parameters. The physical layer is interference limited with terminals distributing their power budget among frequency tones, neighboring nodes and fading states. The present contribution builds on recent results establishing the optimality of layered architectures and develops physical layer resource allocation algorithms that are seamlessly integrated into layered architectures without loss of optimality.