Method for computing all-terminal reliability for arbitrarily interconnected networks such as the United States public switched telephone network. The method includes an efficient search algorithm to generate minimal cut sets for nonhierarchical networks directly from the network connectivity diagram. Efficiency of the search algorithm stems in part from its basis on only link failures. The method also includes a novel quantification scheme that likewise reduces computational effort associated with assessing network reliability based on traditional risk importance measures. Vast reductions in computational effort are realized since combinatorial expansion and subsequent Boolean reduction steps are eliminated through analysis of network segmentations using a technique of assuming node failures to occur on only one side of a break in the network, and repeating the technique for all minimal cut sets generated with the search algorithm. The method functions equally well for planar and non-planar networks.