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shakespearesghost
Can the term "monopoly" be applied to a local utility?
I have a disagreement with a co-worker. He says that the local electric company--since it is the "only" electric utility in the city--has to be considered a monopoly.
Your co-worker is correct - it is a monopoly. The reason it isn't charged with antitrust violation is
1. It is too expensive to put a separate set of wires - hence competition doesn't result in best price for the consumers.
2. Utility companies have accepted external control (utility board) that limits how much they can charge.
thomas p
It is a monopoly under law. In fact there was a period in the 1970s when cable services were building out that the government agencies issued "nonexclusive monopoly" certificates for cable systems! Monopoly is just a term from some point of reference. World, Nation, State, City, etc.
googie
All utility companies are monopolies, are regionalized due to their product, and are overseen by utility commissions who are more on the side of the firms that they regulate than the people who use the service. To wit : How many times within the past 25 years have you seen rates being reduced for power, water or natural gas ? There might have been a mistake made in rate calculation where the utility refunded a past overcharge, but never a true rate decrease.
s_shearwood
I agree with all above,
could not explain any better. x
cridler
Any enterprise with no significant competition and a high barrier to competition is a monopoly. An electric company is a classic example of a monopoly that is why utility rates are regulated by state commissions.
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