UNIVERSITA' CATTOLICA DEL SACRO CUORE - Milano - Istituti

could be written for each of them, trying to appraise their relative advantages,
drawbacks, net benefits or costs to society.
Yet, if not conclusion, some guidelines may still be drawn. The preceding
discussion seems to suggest that ownership separation is an extreme solution
which may entails as many drawbacks as advantages. Operational separation
appears as a hybrid solution which could likely reap the benefits of several
approaches, generating a net benefit to society: separation of ownership and
control may thus prove to be a prudent, pragmatic and feasible alternative
solution. Conversely, it may result as the worst of both worlds, as proved by the
Italian experience in the electricity sector. Although not an evidence, the
frightened reaction of incumbent operators may spread some confidence about the
effective competitive benefits that could be reaped with structural separation.
Separation into reciprocal parts (or, equivalently, fully developed networkcompetition)
looks so close to paradise that we prefer to think of it as the ultimate
goal rather than as a realistic approach to achieve competition. Similarly, the
“investment ladder” appears quite unfeasible in real practice: in our opinion, an
unambiguous decision about the preferred strategy should be made and coherently
pursued.
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