There is an argument that holds separation of services revenues from network operation will result in a decline in investment in the latter. I am not an Economist, but what is unseen in this analysis, IMHO, is the declining return services are providing. The network monopoly is being monotonously and inevitably erased by improved technology, and legacy returns from vertically integrated telcos, despite the "Triple (or Quad) Play" new clothes for the Emperor, are declining.

The two businesses are now starkly different and need to be performed by different organisations. Network infrastructure is near guaranteed utility, services are now competitive and too diverse for a single organisation to efficiently supply. Telecommunications isn't just voice anymore, not just a voltage in a wire.

But thought is a very inertial thing, despite its intangibility. For an example of how poorly a new paradigm can be percieved by incumbent models, look at this.

An interview by Telco 2.0, a group of consultants who believe the "conglomerate vertically integrated telcos" can be reinvented to thrive in the new environment, of Malcolm Matson from OpenPlanet who believes in a fundamentally different way of building access networks: Open Local Access Networks (OPLANs).

The degree of disbelief that things could be different is epitomised by this question from T2:

"If you're a monopoly provider, won't you capture monopoly rents?"

For the interviewer its inconceivable that one does not imply the other...

Fortunately Telecom has seen the future and made a choice rather than continue to straddle the divergent businesses telecommunications is splitting into, to focus on the services layer and divest entirely the network infrastructure operation.

On the network infrastructure, OPLAN, side, WCC is also taking an appropriate step, a belated one after the very precocious CityLink initiative in 1996, but they appear to have recovered their footing and are now moving on and into accepting their responsibility for transport infrastructure of all kinds, the world has moved on from roads, drains, and power lines and the WCC is about to lead.

Two different businesses, two models of investment, one long term and practically risk free, the other of an ever shortening cycle with much greater risk and concommitant reward. Looking around the overheated investment climate, where is the shortage that would avoid reliability in a world of risk?