Also true, however what you don't want to be doing is penalising people for having to use two modes/operators - this is the massive issue with having multiple operators with their own fares systems. The Dutch system doesn't - you pay a flat "starting rate", then a per-kilometre fare set by each operator. While that wouldn't be my preference, it is certainly a workable option that fixes the cross-operator "penalty for changing" issue while still allowing operators to compete with different per-km fares if they wish.
This issue of fares involving changes of route/operators/modes is, in my opinion, the biggest potential gain from a regulated system. This country has swung from a de-regulated system (prior to 1930), to a regulated system (1930-86) and then back to a de-regulated system from 1986 (albeit with more controls than prior to 1930), each change with laudable ideals and goals, but these have each produced undesirable side effects which have become more apparent over the years.
Without laying any blame, because it is not at all helpful or relevant, the current deregulated bus companies have sought to protect their market (by issuing own operator multi-ride tickets) from 'first at the stop' tactics, have been discouraged by Competition rules from through ticketing, and more importantly have not wanted to take the kind of financial risk that the change to through/inter available ticketing brings. This is totally understandable, as in their experience, fares reductions have mostly yielded instant losses from existing passengers and a long hard slog to attract new or more frequent riders. We wouldn't risk it if it was our personal money!
In 1981/2 in London, the 'Fares Fair' additional subsidies enabled a radical change to the fare system, away from graduated stages to a zonal system. This could only be done by extra subsidies to pay for the reduction of the higher fares - when the extra subsidies were reduced the zonal fares rose but the structure reform was not rolled back.
If there is the extra subsidy to reform something which is virtually impossible in the current framework, through-route/operator/mode ticketing is it.
Re-regulation without extra money is unlikely to yield much benefit at all - the risk of fares reform will not be affordable - sure in some places it will be tried and probably result in service cutbacks as the revenue base is eroded. Just because the service is state controlled doesn't guarantee no reduction in services - look at the Conway Valley line etc. On the buses these cutbacks are more likely to hit the poorer areas which justify more frequent service, but politically eliminating rural and affluent area routes will be difficult. Exactly what happened in the latter part of the previous regulated era.
I am not sure I agree with harmonising fares in accordance with distance - this is exactly what happened in the latter part of the previous regulated era, resulting in the poorer areas with high load factors being charged higher fares to cross-subsidise routes with more affluent but fewer passengers (generally in rural areas). The routes that have low load factors / high costs should have higher fares.
One of the [desirable] effects of de-regulation has been to concentrate resources on urban and inter-urban services where passenger usage is greatest, and I wouldn't want to lose that for wider social engineering aims.
One thing for sure, as night follows day, is that a few years after the industry is re-regulated there will be calls for de-regulation, because after a while vested interest sets in. Each period of deregulation and regulation has brought desirable changes to the structure of the industry. Let the next change bring fares reform.
