 interconnection was essential if GTE customers were to be able to make calls to and receive calls from Pacific Bell customers. The Internet is a network of interconnected networks with reciprocal arrangements. Interconnection is reciprocal because communication of this type is a two-way street, with each network both originating and terminating telephone calls. Although the common law and early federal statutes did not require the Bell System to interconnect with competitors or providers of complementary ser- vices, the 1996 Act imposed the requirement that all telecommunications carriers interconnect directly or indirectly with other carriers. The compensation regime for mandatory interconnection access varies. The rates for many types of interconnection remain unregulated. For example, rates for interconnection between wireless telephone networks are currently unregulated. Similarly, interconnection among backbone providers is not compulsory. In other situations, the law dictates interconnection rates. For example, the 1996 Act requires all LECs to establish reciprocal compensation arrangements with one another and mandates that they "provide for the mutual and reciprocal recovery 2 47 U.S.C. §§ 251(b)(1) & (c) (4), 252(d)(3). 3 Huber et al. (1999); 47 U.S.C. § 251(a)(1). Networks in Telecommunications by each carrier of costs associated with the transport and termination of calls that originate on the network facilities of the other carrier." The FCC authorized state public utility commissions (PUCs) to impose default proxy prices or to base interconnection access prices on TELRIC, which is a forward-looking, replacement- cost methodology. The Act also requires ILECs to interconnect with all other telecommunications carriers on just, reasonable, and nondiscriminatory terms. The logic underlying reciprocal compensation stems from the fact that telecom- munications systems have typically operated on the principle that the calling party pays. When this is the case, the network originating a call is the only one 