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I wouldn't say it's a market failure, it's more of a regulatory failure. The problem isn't that a lot of competition has resulted in no benefits for the consume

I wouldn't say it's a market failure, it's more of a regulatory failure. The problem isn't that a lot of competition has resulted in no benefits for the consumer; the problem is that a lot of competition hasn't existed yet. It's a lack of a market, not a market failure. Right now the expense of complying with regulation alone is enough to make most potential competitors balk. Combine this with the fact that it takes years of legal hoop-jumping and other paperwork before you can even create a truly independent provider, and it becomes pretty hard to start a new cell network.

orijing 16y ago
It certainly is a market failure, not a lack of a market, unless you define market differently than the convention I'm familiar with. This specific form of market failure is a failure in market structure. Of course regulatory failures exacerbated this problem (or at least didn't fix it), but it's not the main "cause" of the failure, by which I mean "would it naturally without any regulation at all?" Regarding your second paragraph, yes, that is a regulatory burden and it's true that it increases the barriers to entry into the industry, and I suppose that's an argument for why regulation caused market failure. But is it the main cause? I think it's because this particular market structure is inclined to a natural monopoly (or something close) because of the high-fixed-costs nature of the business.