Re: wholesale rates for line rental
"the wholesale rates for line rental are set by regulation and are based on the actual cost of provision, I'm not sure where that cost could 'disappear' to."
Careful here.
At least in the UK, there's what punters pay for line rental, and there's what the regulator allows the wholesaler (BTo/BTw) to charge for line rental.
Once upon a time, maybe a decade or more ago, there was only a little bit of a difference between the wholesale and retail line rentals. BT even used to claim they made a loss on line rental. Lots of BT revenue and profit came from BT's call charges.
Then along came competitive carriers (famously including Mercury) to undercut BT call charges using exactly the same infrastructure.
A few years later again there are still indirect providers around, offering call charges that make BT prices look real silly (how about ~5p per UK call for up to an hour?) but bundling by BT and explicit blocking by other retailers mean the indirects are an endangered species.
At the same time, nowadays courtesy of Ofcon and a cartel of BT 'competitors', there is a huge margin (>>50%+ iirc?) between wholesale and retail line rental prices. Oddly enough retail line rental is mostly the same whichever big name retailer you pick, and there's not that much difference between their call charges.
There's even more of a guaranteed profit margin if you take into account the near-compulsory call bundles from the big name retailers.
But Ofcon don't see a problem, so it must be OK.