How'd that "enforced separation" work out with Network Rail and the train services that replaced British Railways?
Pretty crappily, in that case. Difference is only one TOC (train operating company) can provide a given service (say, the 7:45 Brighton to London Victoria), and if that's the service the passenger needs to be on to get to work - that's it. No competition possible, and we all know what happens with a captive market - you get price gouging on the scale of the US cable companies. Most of the parallel routes that did exist were shut in the 1960's Beeching closure programme, so it's not exactly unexpected. The only effective competition is the road, and for a long time it won, largely due to the massive unaccountable investment in the motorway network whilst the railways had to turn a profit or be closed.
The ideal model there is London Overground, itself modelled on the London Bus network. When Maggie T. was privatising everything in the 1980s the London bus network was left until last as it was the most complex. However, when the time came everyone could see what a clusterfuck the privatisation of all the other bus operations had been so it was halted and transformed into the arrangement today: Transport for London takes the revenue risk, defines the services, and manages the branding as a single coherent corporate entity, and subcontracts the routes to private operators at largely fixed costs. The passengers don't give a damn if the number 258 is operated by First, Stagecoach or Arriva, they just care that it turns up on time and gets them where they want to go quickly. This is also how LO operates, and it works brilliantly in my opinion - almost indeed as if it were part of the London Undergound. Personally, I think this is how all the mainline train services should operate - bring back the BR regional branding and subcontract the operations to private firms. Competition transforms away from where it doesn't make sense (between passenger journeys) to between operators for the right to run the routes, away from the public entirely.
Internet access is more akin to electricity or water though - you really don't care whose bits / joules / litres you're getting - they're all essentially the same, and having multiple distribution networks would be very, very wasteful (abet, great for resiliency!) Having a single regulated infrastructure provider and free market operators makes the most sense if you don't want to just regulate the whole thing, which would remove market forces from the equation entirely (for good or bad). It also reduces the barrier to entry for new competitors dramatically - meaning your market doesn't stagnate.