he provider of both the regulated and unregulated services would have to recover a smaller portion of the shared costs through the prices charged for its unregulated services, which in turn would give it a price advantage vis-à-vis competitors that did not participate in both markets. Allowing a single company to participate in regulated and unregulated markets also greatly complicates regulatory authorities' ability to enforce nondiscrimination mandates. Determining the precise terms under which the regulated services are provided to the unregulated portion of the business is extremely difficult when the interconnection agreement is not negotiated at arm's length. The resulting opacity of the interconnection terms makes it much easier for any favoritism shown by the provider of the regulated service to go undetected. Finally, both Congress and the FCC have become increasingly committed to the benefits of competition. As a result, both sets of policy makers have increasingly sought to limit regulation to the narrowest range possible and to permit market forces to determine outcomes in the broadest feasible range of activity. The traditional solution to each of these problems is to require telecommu- nications providers to segregate their regulated services into separate subsidiaries. A subsidiary must offer unaffiliated providers of complementary services carriage on the same terms on which it offers carriage to its own complementary services. Structurally separating the regulated business from the unregulated business limits the network owner's ability to shift costs from its unregulated service to its regulated service. Forcing the regulated subsidiary to negotiate interconnection agreements through arm's-length transactions also eliminates the ability to use bundling of regulated and unregulated services to avoid rate regulation and makes nondiscrim- ination easier to detect and enforce. The 1956 consent decree that settled the government's second antitrust case against AT&T represents a classic example of the