Unable to create Docker-Compose specified overlay networks in swarm mode

I am specifying the use of an overlay network in my compose file:

networks: mynet: driver: overlay

But when running docker-compose up I get the following:
ERROR: driver name: if driver is specified name is required

Anyone have any thoughts to what is happening here? Specifying a known wrong driver bring back a different, and correct, error. An overlay network exists so that should be setup and working.

Ubuntu 16.04, Docker 1.12-RC2, Compose 1.8.0-rc1

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From what I can see, you cannot use overlay networks in your compose file if you are using Docker 1.12. You’ll need to start looking at docker service and docker bundle.

Also see my comment on this issue: