Re: Be careful what you wish for!
"Let's face it, there is only so much you can put up with as Regulator, before it makes the regulator look predictable and weak"
Yup and this is all looking like a replay of New Zealand up to 2004 where the regulator was saying "no need to change" despite the mounting disquiet around it - and by 2005 was forced to agree that the situation was untenable
This is the real reason BT is scared of losing Openreach: "Telecom's long-term credit rating has been cut one notch by Standard & Poor's to reflect the demerger of the company's Chorus business and the loss of its network revenues." http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10765942
And just like the New Zealand, the demerger case is being driven from _outside_ Ofcom, on competition grounds.
One of the more ironic stories was Spark (former Telecom New Zealand) crying publicly about a year on from the split that the rate it was paying for lines access was far too high and it couldn't possibly afford this, give us a special deal, oh woe is us - when the (regulated) rate was based on figures TNZ had provided the ministry of commerce, the same for everyone, half the previous cost that everyone else had to pay - and all the competitors were happy at paying lower rates (which have since been revised downwards - unlike what BT keeps doing now).
There's some argument that the regulated rate has been pushed too low now, but it will settle. The important thing is that all players are charged the same rates (no preferential access - but bulk discounts apply) and there's enough profit to keep reinvestment going. Regulations also prohibit any entity gaining a controlling interest in the lines company, which helps a lot.