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Agree. “Natural monopoly” is a very lazy term. It’s mostly about looking around at a moment and declaring that it must be so. Utilities don’t need to be monopo

Agree. “Natural monopoly” is a very lazy term. It’s mostly about looking around at a moment and declaring that it must be so. Utilities don’t need to be monopolies, necessarily. It’s just that they were designed that way at a point in time. It’s a path of history, but not a natural law. Wintel too. Which was a monopoly, until it wasn’t. It’s not that their position in the market changed, but the definition of the market itself (i.e., computing became mobile). Google (a monopoly) is (or was) terrified by both Facebook and Amazon. Neither of which is a search engine, but each of which is a path toward determining what product to buy. The market itself changes.

beambot 11y ago
Good point about utilities. Plus, with decentralized (solar) power generation, utility companies are really starting to show some cracks too. As soon as distributed energy storage is economically viable, they're going to need to adapt even further.
- afarrell 11y ago
  What does energy generation have to do with the monopoly power of the folks who own the wires, buy from the bulk electricity market, and sell to consumers?
  - beambot 11y ago
    When customers can go 100% off-grid using rooftop solar and in-home storage, it bypasses and obviates the utility's monopoly on bulk generation and transport. This actually causes a lot of issues, since the long-term fixed costs for the utility get spread across fewer paying customers. You're starting to see this problem in locales with heavy solar penetration (eg. Hawaii).
jjoonathan 11y ago
The threat of possible disruption from an uncertain direction 10 years down the line is of a very different nature than the threat posed by direct, immediate competition. Why do you think it's "lazy" to find one type of competition less desirable and then notice and complain when certain markets seem to consistently gravitate towards it?
- mwsherman 11y ago
  I don’t think what you’re describing is wrong. But a belief that something is a natural monopoly causes us to make policy choices based on a flawed assumption. Flawed choices about the inevitability of a monopoly tend to entrench same. E.g. our municipal broadband monopolies trace back to a belief that wireline phone and TV can only be monopolies. And maybe it’s true! But we might have chosen differently, had we not assumed it a natural outcome. We might have assumed that wireless is a natural monopoly. Gladly, we didn’t. (Though spectrum policy can be more competitive.)
  - marklgr 11y ago
    This is not about inevitability and immortality of monopolies, but their likelihood and the detrimental effects they bring on while they exists. Both can be pretty high in some domains, so it is worthwhile to think about it, to me.
  - jjoonathan 11y ago
    > But we might have chosen differently Please elaborate on what you mean by "chosen."

beambot 11y ago

Good point about utilities. Plus, with decentralized (solar) power generation, utility companies are really starting to show some cracks too. As soon as distributed energy storage is economically viable, they're going to need to adapt even further.

afarrell 11y ago
What does energy generation have to do with the monopoly power of the folks who own the wires, buy from the bulk electricity market, and sell to consumers?
- beambot 11y ago
  When customers can go 100% off-grid using rooftop solar and in-home storage, it bypasses and obviates the utility's monopoly on bulk generation and transport. This actually causes a lot of issues, since the long-term fixed costs for the utility get spread across fewer paying customers. You're starting to see this problem in locales with heavy solar penetration (eg. Hawaii).

jjoonathan 11y ago

The threat of possible disruption from an uncertain direction 10 years down the line is of a very different nature than the threat posed by direct, immediate competition. Why do you think it's "lazy" to find one type of competition less desirable and then notice and complain when certain markets seem to consistently gravitate towards it?

mwsherman 11y ago
I don’t think what you’re describing is wrong. But a belief that something is a natural monopoly causes us to make policy choices based on a flawed assumption. Flawed choices about the inevitability of a monopoly tend to entrench same. E.g. our municipal broadband monopolies trace back to a belief that wireline phone and TV can only be monopolies. And maybe it’s true! But we might have chosen differently, had we not assumed it a natural outcome. We might have assumed that wireless is a natural monopoly. Gladly, we didn’t. (Though spectrum policy can be more competitive.)
- marklgr 11y ago
  This is not about inevitability and immortality of monopolies, but their likelihood and the detrimental effects they bring on while they exists. Both can be pretty high in some domains, so it is worthwhile to think about it, to me.
- jjoonathan 11y ago
  > But we might have chosen differently Please elaborate on what you mean by "chosen."