Telecommunications Law and Regulations
Steve Gelin
Telecommunications Law & Regulation
NETW-584
Natural Monopoly
What is Natural Monopoly? A Natural Monopoly transpires where the largest supplier of the production of a product (i.e. goods or a service) in a business regularly becomes the first provider in a marketplace and has a tremendous cost advantage over other actual and prospective competitors. Natural Monopolies are companies that provide a service to an area. It increases the setup costs, it lays all the required cables, and it procures the hardware and software that’s required to operate such an enterprise. Companies hire groups of personnel from numerous industries to keep the service running. Nevertheless, it is not the establishment that is a natural monopoly but the service itself. (Beggs, 2005) With the backing of the provided description and related material from the textbook it would be a costly endeavor to establish an electrical company within any specified area. This reason alone describes the complexity and necessary to exclude these services to one company in large or small areas. An electrical company for the most part will deliver service to a larger area mainly because profit is in mind and also because establishing the foundation is just a small step to a larger gain. (Stigler, 2008). If you haven’t notice that in many areas one electrical company has been established whereas two or three telephone competitors or any other service may have or are in development.
Utilities As A Monopoly! Should the government treat telephone, cable and broadcasting companies as “Natural Monopolies”? Well in my own opinion it would be better to treat Electrical companies as a Natural Monopolies. Telephone, cable and Broadcasting companies have too much competition to try and monopolies the industry with these services; for example here in Orlando, FL and any where else for that matter Telephone services are offered everywhere almost at every corner you can find a Telephone
Telecommunications Law & Regulation
NETW-584
Natural Monopoly
What is Natural Monopoly? A Natural Monopoly transpires where the largest supplier of the production of a product (i.e. goods or a service) in a business regularly becomes the first provider in a marketplace and has a tremendous cost advantage over other actual and prospective competitors. Natural Monopolies are companies that provide a service to an area. It increases the setup costs, it lays all the required cables, and it procures the hardware and software that’s required to operate such an enterprise. Companies hire groups of personnel from numerous industries to keep the service running. Nevertheless, it is not the establishment that is a natural monopoly but the service itself. (Beggs, 2005) With the backing of the provided description and related material from the textbook it would be a costly endeavor to establish an electrical company within any specified area. This reason alone describes the complexity and necessary to exclude these services to one company in large or small areas. An electrical company for the most part will deliver service to a larger area mainly because profit is in mind and also because establishing the foundation is just a small step to a larger gain. (Stigler, 2008). If you haven’t notice that in many areas one electrical company has been established whereas two or three telephone competitors or any other service may have or are in development.
Utilities As A Monopoly! Should the government treat telephone, cable and broadcasting companies as “Natural Monopolies”? Well in my own opinion it would be better to treat Electrical companies as a Natural Monopolies. Telephone, cable and Broadcasting companies have too much competition to try and monopolies the industry with these services; for example here in Orlando, FL and any where else for that matter Telephone services are offered everywhere almost at every corner you can find a Telephone
References: Foldvary, F. (1999). Natural Monopolies. Retrieved, from http://www.progress.org/fold74.htm Beggs, J. (2005). What Is A Natural Monopoly? Retrieved, from http://economics.about.com/od/monopoly-category/ss/Natural-Monopoly.htm Pietersz, G. (2005). Natural Monopoly. Retrieved, from http://moneyterms.co.uk/natural-monopoly/ Stigler, G. (2008). Monopoly. Retrieved, from http://www.econlib.org/library/Enc/Monopoly.html