Structural separation or market restructuring

Jonathan Solomon and Dawson Walker

Telecommunications Policy, 1996, vol. 20, issue 7, 475-479

Abstract: The provision of local access in telecommunications looks likely to remain, predominantly, in the hands of the traditional vertically-integrated PTOs. The failure of governments to mandate structural separation, a vital pre-condition for the full flow through of Information Era Benefits, requires increasingly artificial modes of new entrant assistance, such as those in the UK, to offset lack of scale and scope in the face of vertically-integrated dominance. There are structural solutions available to unlock the vital local access network. Where the regulator fails to act, the market will act. Between now and 2000 the telecommunications market will be swept by two centripetal forces: (i) the Internet model where de facto structural separation exists and (ii) a host of merges to maintain maximum customer control in the absence of structural separation.

Date: 1996
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