This bag is worked in the round from the bottom up. The base is worked in garter stitch and the sides are worked in a stockinette wave pattern, ending with the netting border. The handles are knitted onto the upper edge of the bag in garter stitch.
The instruction for the base of this bag can be a little confusing. I am including this errata to clear things up.
Rnd 1 and all odd rounds of base: Purl
Rnd 2 and all even rounds of base: K to marker, M1, sm; rep from to end.
What you will be doing when you make the base is increasing 1 stitch right before each of the markers on all even rounds and purling all of the odd rounds. This will give the bag a nice flat base. You will end with a purl round before beginning the garter ridge and the sides of the bag.
Photos © by Matt Bowen for Wiley Publishing 2009.