Fighting the monopoly bogeyman: The mythical basis for structural separation

Structural separation is a tool available to regulators when it is apparent access regulation and competition policy are failing. In Australia there is prolific competition, but because of ACCC pricing policies, that competition is clustered in high-value suburban areas, and is still reliant on access to Telstra's local loops. Competitors have failed to move up the 'ladder of investment' because lower rungs have been under-priced. That is history. We now need massive investment in next generation networks. Out with the ladder, and in with a high-cost escalator! An FTTN investor not only takes on a much higher risk, without sufficient demand signals, confidence in a commercial return, and a stable regulatory environment, there won't be an FTTN investment. Structural separation not only increases the commercial risk, it decreases the chances of the investment ever taking place by separating the demand and supply sides of a company.