rvice between 1896 and 1907, described above, during which time mandating interconnection would only have served to slow the buildout of the network. Once the telephone industry used mergers and division of markets to eliminate competition in local telephony, individual companies no longer had any incentive not to interconnect, because telephone companies with nonoverlapping local service monopolies have every incentive to interconnect with one another. Mandating interconnection access necessarily requires regulatory authorities to establish access prices. The 1996 Act requires local carriers to interconnect and to settle the charges through a system of mutual and reciprocal compensation, Networks in Telecommunications which the statute provided would be based on "a reasonable approximation of the additional costs of terminating such calls" (47 U.S.C. §$ 251(b)(5), 272(d)(2)(A)). The FCC determined that reciprocal compensation rates would be based on TELRIC (FCC 1996a). 31 As we have discussed in earlier chapters, any approach that bases prices on the cost of particular network components in essence treats each component as if it existed in isolation. In doing so, these approaches fail to capture networks' defining characteristic: that they are complex systems in which the value of any one component depends on its relationship with and the flows carried by the rest of the network. One of TELRIC's central failings is its inability to take the network's configuration and systemic interactions into account. The problem of determining rates is made all the worse by the mandating of interconnection "at any technically feasible point" (47 U.S.C. § 251(c)(2)(B)). This requirement prevents the network owner from minimizing the adverse impact to its system by choosing which facilities to employ when fulfilling any particular request for service. In the worst case scenario, the right to designate the point of interconnection gives competitors the opportunity to act strategically by basing their access requests not on their