4 ms·

I don't quite understand why these natural monopolies are run by the private sector. I can see why you might get sub-contractors to help maintain the network,

• rayiner 11y ago
  Originally, it was all just British Telecom, which was a government-owned monopoly. That was split up into BT and OpenReach and privatized in the 1980's, as part of a general market movement. Putting the infrastructure into public hands has upsides and downsides. If the public is willing to invest money, you can get a pretty workable system: e.g. the Paris subway. If the public isn't willing to invest the money, you can get a very bad system, e.g. Flint Michigan's water supply. More often than not, public ownership leads to under-investment. In the U.S., for every enlightened municipality like New York that carefully manages its water supply, there are dozens that keep water rates far too low and consequently lack the money to upgrade miles of decaying lead pipes. All told, BT OpenReach is probably one of the better ways of organizing this function at scale. It's ostensibly private, but it was privatized with a carefully-designed system of incentives to keep investing in infrastructure. OpenReach is, for example, much more profitable than Verizon's wireline division. That's why they're still at least building fiber, instead of trying to get out of the business entirely.