ates that rates provide for "the mutual and reciprocal recovery by each carrier of costs associated with the transport and termination on each carrier's network facilities of calls that originate on the net- work facilities of the other carrier." The statute specifically does not "preclude arrangements that afford the mutual recovery of costs through the offsetting of reciprocal obligations, including arrangements that waive mutual recovery (such as bill-and-keep arrangements)" (47 U.S.C. § 252(d)(2)(A)(i), (B) (i)). As noted above, the FCC has implemented interconnection access through TELRIC, although it is considering replacing TELRIC with bill and keep. The result is that different methodologies apply to rates established for each dif- ferent type of access. The inconsistency raises the possibility that firms will attempt to manipulate the categories of access in order to engage in regulatory arbitrage. As noted in Chapter 5, the most prominent example of this is the controversy over UNE-P, in which resale competitors avoided the higher rates charged for whole- sale access simply by requesting unbundled access to all of the elements needed to provide local telephone service. Such manipulation of the regulatory regime will continue to occur until all forms of access are priced on a consistent and unified basis. D. Constitutional Arguments in Favor of Market-Based Pricing In addition to the problems of economic theory discussed above, the manner in which access has been imposed on local telephone networks also raises serious con- stitutional problems. We will focus our analysis primarily on the access provisions of the 1996 Act, because the takings implications of those provisions have received the greatest attention from both regulators and commentators. 1. Physical Collocation The FCC tended to downplay the takings implications of its implementation of the 1996 Act. According to the FCC, TELRIC simply limits the prices that can be charged for the use of the incumbent LECs' network elements. Although courts an