Benji, I don’t mean to be a dick, but there seems to be a major disconnect in this conversation. Maybe I’m not explaining myself clearly, but I think I am.
The number of electricity companies does not actually indicate whether something is capable of being a natural monopoly or not(as a side note there are a little over 3000 counties in America as well, which technically, provides space for quite a lot of natural monopolies, even more when you consider the number of cities). In my city we have two electricity companies. But if you live on Lafayette street, you can only use one company. While yes, there is a regulatory component, the thing being spoken about though is that none of these companies really have the capacity to overtake the other or provide competition once the other has established their market share. For company B to encroach on Company A’s territory, it would involve needing to build an entire new infastructure as they go, and all the complexity that entails, capturing a large percentage of the potential market share to justify the costs of that expansion. While secondarily creating redundancy in the use of scarce land resources. And that’s just to establish one new competitor, to get to a place of being a text book highly competitive market is likely going my to require many more. Even in the most generous scenario, there are just markets and market spaces where that is nearly impossible in unregulated circumstances. Heck in many instances, to even establish a market you have to pay people to go build it, like the government did for ATT and internet for rural areas. But we are supposed to think that some other competitor is capable or willing to unsubsidized build out a competing network for that community?
You mention Dallas, and Dallas and major big cities are definitely better insulated to these forces, since they are large population hubs. But like with most things, the potential ROI declines rapidly for smaller cities and towns. If it wasn’t clear, this is not an all or nothing argument. There are certainly situations, like highly populated areas, where the dynamics of an industry play out differently given the market space, and that dynamism should be accounted for. Places that are not as prone to natural monopoly issues. But to pull another example more in my wheelehouse, take large general hospitals with an ER. No manner of deregulation or anything else besides incredible subsidization is going to justify a competitor investment in a relatively small city disconnected from a larger population hub, except in rare exceptions, from investing in a major encompassing ER hospital. Because the demand, supply, and ROI is not there for another competitor to enter that particular market space. Which from another angle gets to the same inherent market issue facing large swaths of the country, if not the vast majorit it, when it comes to ISP’s, cable companies, electricity, sanitation etc.
This is every future market segment that may come to exist. If natural monopolies exist and can self-sustain, why are there no examples of them historically? (Even just after The Two Revolutions to make things both post-Smith and probably easier to trace on Google.)
You mean why are there not examples of natural monopolies cropping up around things like sanitation when people used to just throw their shit on the street or in the nearest river? IDK, good question.
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