And right he was. Telstra's Warren said the separation argument is a distraction, not a solution, and needs to be taken off the table.

"We've checked our views with leading global thinkers on economic regulation, and what they said should be sobering to the bandwagon separationists and crystal clear to policy makers...separation as a regulatory remedy has no track record of success."

Warren pointed to Professor Martin Cave, "the guy who invented much of the regulatory theory in the telecommunications space", who said vertical integration is efficient, separation will create very acute problems of investment co-ordination, and the best way to ensure healthy competition in a next-generation network is to start from a strong base of infrastructure competition. He also cited US academic Dr Mark Jamison who indicated "every flavour of separation" in the US was costly, disruptive and delivered more harm than good.

The separationists seem to believe that Telstra is endlessly divisible... this truly does belong I think in a Monty Python skit

Telstra

"Optus has rolled out one opposing expert who pointed to Mongolia as the poster child for network separation in telecommunications. I think I know where my money is," Warren quipped.

Warren accused those calling for separation of being unable to agree on exactly what form of separation should occur, with mobile operators not wanting the NBN owner to also own a mobile service, ISPs not wanting the NBN owner to operate an Internet service, and other carriers wanting to "chop us up into little pieces".

"If we listen to them all the picture that jumps into my mind is the famous Black Knight from Monty Python; the separationists seem to believe that Telstra is endlessly divisible... this truly does belong I think in a Monty Python skit, it should be put aside," he said.

CCC's Forman rejected Telstra's claims that separation creates investment problems, asking whether Boeing needed to own and operate airports in order to begin development of a new airliner or to be aware of passenger loads that will ensure a return on that R&D.

"I would put forward this proposition - integrated ownership creates more risk for bad investment decisions because market signals are completely internalized."

He rejected Telstra's claims that separation in the UK and NZ were detrimental to competition.

"It's not just BT, but regulators, competitors and consumers in the UK are saying what happened in the UK has been beneficial. It doesn't matter how many times we hear Telstra assert that there is some kind of disaster going on in the UK, it was a policy implemented to make the life of consumers better."

Forman also objected to claims that separation would damage Telstra's share price, showing BT's stock had, since accepting the separation model in 2005, risen compared to Deutsch Telekom over the same period, who had opposed separation. He pointed to New Zealand's communications minister who said, regarding the separation of Telecom NZ, that his job was to act for the benefit of all New Zealanders and for the good of the economy, not to protect Telecom NZ's share price from the impact of that company losing market power.

"I'm not saying Telstra is the devil, I'm saying Telstra is doing what it is structured to have an incentive to do and it will continue while it has that incentive and ability to discriminate in favour of its own business units against others.

"We should be arguing about the form of separation to get those incentives right. If Telstra still wants to argue against separation in any form then so be it, but the rest of us are having a debate that needs to be resolved."