Democratic Senators Block Republican-led Net Neutrality Repeal

[Phokus]

Not really, natural monopolies is used as an ex post facto rationale for explaining why there is a lack of competition in "public utilities". The fact is that franchise fees that local governments receive are higher if there is not competition because these fees are paid as a percentage of gross receipts.

Given that local governments are revenue seeking entities, they would prefer to seek their extra revenues by having higher gross receipts from utility monopolies than by raising property taxes, the latter is far more unpopular, and the former generally goes unnoticed.

I agree with the sentiment that turning back on this net neutrality once the monopolies are already reinforced is allowing these utility companies to exploit the consumers unnaturally.

You're wrong about this actually. Some utilities have such high capital costs that only 1 supplier can profitably serve everyone. In Britain, people actually died when they tried direct competition with water utilities.

Now internet isn't like that everywhere, but in many parts of the country, there really can only be 1 profitable internet provider (if any at all)

Historical example

Such a process happened in the water industry in nineteenth century Britain. Up until the mid-nineteenth century, Parliament discouraged municipal involvement in water supply; in 1851, private companies had 60% of the market. Competition amongst the companies in larger industrial towns lowered profit margins, as companies were less able to charge a sufficient price for installation of networks in new areas. In areas with direct competition (with two sets of mains), usually at the edge of companies' territories, profit margins were lowest of all. Such situations resulted in higher costs and lower efficiency, as two networks, neither used to capacity, were used. With a limited number of households that could afford their services, expansion of networks slowed, and many companies were barely profitable. With a lack of water and sanitation claiming thousands of lives in periodic epidemics, municipalisation proceeded rapidly after 1860, and municipalities were able to raise finance for investment, which private companies often could not. A few well-run private companies that worked together with local towns and cities (gaining legal monopolies and thereby the financial security to invest as required) did survive, providing around 20% of the population with water even today. The rest of the water industry in England and Wales was reprivatised in the form of 10 regional monopolies in 1989.

 

[Phokus]

What's a natural monopoly?

A natural monopoly by contrast is a condition on the cost-technology of an industry whereby it is most efficient (involving the lowest long-run average cost) for production to be concentrated in a single form. In some cases, this gives the largest supplier in an industry, often the first supplier in a market, an overwhelming cost advantage over other actual and potential competitors. This tends to be the case in industries where capital costs predominate, creating economies of scale that are large in relation to the size of the market, and hence high barriers to entry; examples include public utilities such as water services and electricity. It is very expensive to build transmission networks (water/gas pipelines, electricity and telephone lines); therefore, it is unlikely that a potential competitor would be willing to make the capital investment needed to even enter the monopolist's market.

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[Dman8777]

In this day in age, information and communication are every bit as important as transportation. Just as government is responsible for laying roads, the federal government should lay fiber to every town in the country with a population over 1000 people.

This public network would then be open to any content providers interested for an associated fee that would most likely be passed on to consumers. That way, the network would be paid for by the people who use it.

It would get rid of monopolies, carry phone, tv and internet, and allow even small channels and companies to operate because they're potential customer base would be instantly nation-wide and they wouldn't have to negotiate with cable companies or media conglomerates to get 'on the air.'

Imagine being able to subscribe to only the tv channels you watch instead of the 100+ channel omni package with 5 decent channels.