Comment by miki123211
4 hours ago
You're right on most of these, but wrong on telephony. That actually was a natural monopoly.
It's exactly how OP describes it. It's unproductive for multiple companies to maintain disconnected, parallel telephone infrastructures. The most productive use of resources is to lay more wires to more houses, not to lay more wires to places which have already been wired up for telephone service by somebody else. That creates a monopoly, and the government should step in.
With modern tech, you can mandate local-loop unbundling and fix some of this, but that wasn't possible with 1970s (and earlier) phone infrastructure.
We use "natural monopoly" too freely and too quickly, almost as a free card to actually implement monopolies that last for decades. Anecdo-time: in my small city there is a small "natural" monopoly in public bus service: the municipality offers a monopoly on which buses can operate in the city, that lasts for 25 years or so. I lived through a renewal that was a bit rocky, the bus company went on a strike, and as a result there was a vacuum of monopoly for six months. That resulted in a flood of other companies, big and tiny (as in 1 bus only, serving 1 very demanded route), doing the routes. They were as cheap as it gets, offering month cards outrageously cheaper than previous public-natural-monopoly. It was so cheap, and the offer was so high that cars seemed to vanish from the city center, that was so full of buses that you didn't even check the timetable: you just waited for the next for 5 minutes.
Eventually the municipality renewed the previous contract with the same previous company, a contract that forbids other companies from entering the city center, and we went back to the worse service we were used to. Of course they were a lot of narratives: they were trying to capture the market, drive competence away and then hike the prices; they were bounded to bankrupcy at such prices; that many buses were damaging the roads, and others. But the reality was that for a brief time we had the best bus service in the modern world.
As for telephone wires, we went through some years, between copper-IDSN and fiber (the DSL bridge) that a lot of companies found a way to make it profitable to put new copper cable parallel to what it already existed. The only thing the municipality did was to make it mandatory that the first to install it must use a wider-than-needed conduct (a solution much less disruptive than giving a natural monopoly, latest shown by new small companies born everywhere), so if a company wanted to add more cable later could use the same tubing. Predictions about company A blocking their tubing showed false, as other companies could retaliate in other places. No second tubing was allowed until the first tube was full, this was the only state intervention in the issue. The same tubes have now the optic fiber.
I am not fully anti-state, but there are undeniable overreaching everywhere, and a lot of zealots of intervention that are itching to issue mandates and interfere with everything, and then fix what fails with more interventions.