I can understand why distance-based billing makes sense in the circuit-switched world where a guaranteed end-to-end slice of bandwidth is allocated between endpoints, on-demand.

But that is essentially gone now that packet-switched statistically multiplexed best-effort networks are quickly becoming the norm. Sadly, regulatory frameworks are unable to keep pace with such change, mainly due to politics and backward-looking greed (as opposed to the good forward-looking greed :)

Maybe a good first place to start eliminating the outdated arbitrage model is within each LATA. I'm sure that many of us can attest that IntraLATA tolls are often far more ridiculous than their InterLATA counterparts. Neighbors straddling a rate step boundary being charged tens of cents per minute to talk to each other, depending on how relations between carriers in the same LATA are going. Their dispute resolution techniques are roughly akin to a showdown with assault weapons in a school cafeteria. The only ones really hurt are their customers.

I think we should do away with the IntraLATA minutiae first - no more local area arbitrage, no more rate steps, no more RecipComp. I realize that this generally only applies to metropolitan areas where multiple carriers reside in the same LATA, but makes sense when viewed as a rough microcosm of the entire country, and may serve as an example of how to implement the conversion of traditional telecom facilities towards neutrality. The worst part, to me, is the mapping/GIS wizards currently employed by carriers and Telcordia losing their jobs. I sure wouldn't mind seeing the LERG be obsoleted, however.

Unfortunately, I don't think it's realistic to place the honus of maintaining something like a least-cost routing table or something that otherwise influences the switching network's behavior based on NPA-NXX on the end users. I guess a web-editable list of blocked NPA-NXX wouldn't be too bad, but I'd rather just see the point be made moot and have the "caveat emptor, should've checked the true destination of the call before dialing" model be laid to rest, especially in a day and age where numbers can be ported every-which-way and callers can't necessarily resolve where the call it going just by looking at the area code and exchange.

Having been out of telecom for a few years now, I could be way off in my reasoning, but I seem to recall things working that way.