atutes that they administer SO long as the construction advanced falls within a wide zone of reasonableness. As a result, the Court's decision does not necessarily foreclose the possibility that the FCC might justifiably apply a ratemaking approach based on market prices or ECPR in the future. 34 Regulators are also experimenting with alternative institutional arrangements that obviate the need to set access rates altogether. The statute made clear that it did not preclude arrangements that waive mutual recovery, such as bill-and-keep (47 U.S.C. 272(d)(2)(B)(1)). Indeed, local telephone companies serving the same area, such as Pacific Bell and GTE, have long exchanged traffic on a bill-and-keep 34 See Verizon, 535 U.S. at 497-522, 541; Iowa Utils. Bd., 525 U.S. at 426 (Breyer, J., concurring in part and dissenting in part). The Regulation of Local Telephone Networks basis (FCC 2001c). The rationale is that the payments one network would receive for terminating traffic from the other network would be largely offset by the payments that network would have to pay for traffic passing in the opposite direction. What- ever slight differences exist in traffic would not justify incurring the transaction costs needed to account for and bill the interchange of traffic. The FCC's initial order implementing the Telecommunications Act of 1996 rec- ognized that transaction costs can render flat-fee pricing of congestible resources efficient. One of the primary purposes of the 1996 Act was to foster the develop- ment of competition in local telephone services. As competition for local services emerged, some calls would inevitably originate on one company's local telephone network and terminate on the local telephone facilities of another company. In the process, both the originating and terminating carrier would incur costs. Because local telephone service in the United States has traditionally operated on a calling party pays basis, only the originating carrier would generate revenue from the call. As a result, the 1996 Act ma