In a "free" market, a natural monopoly business will fluctuate between periods where zero companies exist, where one company exists as an incumbent monopolist,

In a "free" market, a natural monopoly business will fluctuate between periods where zero companies exist, where one company exists as an incumbent monopolist, and where one or more challenger companies exist that are all frantically trying to unseat the incumbent before going out of business. Monopolies will develop, but they will also occasionally fail and exit. The reason why governments elevate single companies in a natural monopoly line of business to de jure monopolies is that those periods where zero companies exist could be disastrous to the functioning of other businesses. If all the local water companies go bust, the toilets stop flushing. In a free market, if Comcast is the local ISP monopolist, it cannot stop anyone from investing in an entirely new fiber network. If you have the money to do so, you can walk into town, lay fiber, undercut Comcast on monthly service costs, and drive them to either try to compete or lose all customers. If they compete, it is a war of attrition, and the company that runs out of money first loses (if the local telecoms business is indeed a natural monopoly, which is debatable). If they lose all customers, you are the new monopoly, and you now have the option to reduce service quality and raise prices. As long as the threat of potential competition exists, a monopolist has to operate by monopolistic competition instead of secure monopoly. It is a completely different microeconomics calculation for determining price and output. Generally speaking, the price is lower and output higher than for secure monopoly, but still higher price and lower output than the market-clearing price of perfect competition. In short, rather than charging as much as you can for as little as you can produce, you have to produce as much as is necessary so that no competitor can establish a competitive foothold by targeting your unserved or under-served customers, and set prices accordingly. So there are real differences between the monopolies produced by the free market, and those protected by government.