Going back to the original question:
I think it is important to remember that originally the Cross Country franchise was the part of the old Intercity network that did not terminate in London. I believe this does not sit well with it current specification as a cross Birmingham service. The current XC network therefore has a very uneasy alliance of, albeit extended, commuter services with their priorities of capacity and frequency with the origin to destination journey times, reserved seating, catering and comfort requirements of the long distance traveler. Consequently, neither party is happy with the service provided by XC at present.
I agree very much. When InterCity was set up there were pressures to avoid its being seen as an all-London operation, and that brought in the higher quality cross-country services, though always with some strange exceptions (perhaps the most obvious being Liverpool-Newcastle). This all happened at a time when there were pressures (Prime User for infrastructure, OfQ, and all that) to cut down on the infrastructure facilities any of the sub-sectors was using, eliminate surplus capacity, and rationalise routings. This did not just happen on the cross-country services -- how many people remember the serious suggestions that Colwich to Stone might be closed? Anyway, a combination of pressures led to a concentration on Birmingham and fewer routes being served, and that is what in due course the privatised railway inherited. As CheshireCrusty says, the result is a compromise that doesn't satisfy anyone properly. The argument has been very much developed in other threads in connection with the (non-CrossCountry) Manchester-Leeds route: is it a commuter line that should be organised to meet the needs of Huddersfield and Dewsbury, or is it an InterCity route linking the great cities of Liverpool, Manchester, Leeds, and Newcastle?
The extended Birmingham services - terminating in a circle from Reading through Bristol and Cardiff, Crewe or Liverpool, Manchester, Leeds, round to Cambridge or Stansted Airport. This would mirror any new TransPennine (?& Northern) Franchise based on Manchester and Leeds which could take on some services to the South e.g. Nottingham. Both of these could reasonably be provided with rolling stock with an emphasis on airline style seating, trolley catering but also reasonable luggage space and 1st Class cabins.
Leeds and Manchester are every bit as significant hubs as Birmingham, but all the arguments seem to have been dominated by Birmingham because it is "InterCity". The problem with this proposal is that many of the trains connecting, say, Manchester with Birmingham, would to make the best operational sense be the same as those making the, say, Birmingham to Bristol run -- which promptly makes them long-distance inter-city and needs fast journey times between the main centres.
The Inter-city services serving only the largest cities, or stations which are key interchanges with regional services, and ports or airports?. Here the emphasis would be on journey times between the key cities e.g. Manchester to Bristol, Southampton to Leeds, Newcastle to Birmingham etc at the possible expense of frequency (e.g. 1tph or less). Given its geographic location, a majority of these may well route through Birmingham but not necessarily (e.g. Reading to Yorkshire services might be better served by not routing via New Street). The rolling stock on these routes would be optimised for longer journeys with hot meal catering, separate 1st Class coaches, and bay seating in standard providing appropriate luggage space.
Some of the routes provided by the second franchise may have to come from other franchises (e.g. TPE Manchester to Scotland services, Virgin Birmingham to Scotland services) as well as XC.
Agreed. There is no doubt that TPE within the resources available to it has made a brilliant success of the Manchester-Scotland route after InterCity both under BR and under privatisation had failed really to attempt to develop it at all. But if Birmingham to Stansted or Nottingham to Cardiff are "worth" InterCity status, surely Manchester to Edinburgh or Glasgow is, in spades?
Given the franchising we are now stuck with, it is probably to late for a total re-think. But I still think -- even though there can validly be argument over many of the details -- that the German division of inter-city services linking the main centres and covering their costs, and then Regional Express and Regional Rail services specified by the federal states to meet the perceived transport needs of their areas and subsidised where necessary by the states is a good one (and it is a system broadly followed in other large European countries as well).
Reverting for a moment to my opening comments, I wonder what sections of line and track facilities lost in the mad rush to rationalise of the eighties are now most to be regretted. I'd put up CrossCountry's original direct route from Sheffield to Leeds, now lost between Wath Road Jn and Normanton for one, and probably Denton Jn to Droylesden Jn for another.