This was the argument against privatizing the telcos in Europe in the 80s. But once they did competition and innovation thrived. Classifying something as a utility leads to stagnation.
They are privatized and regulated. Being a utility doesn't necessitate a government monopoly, and regulation needn't describe only a narrow range of allowed approaches.
I assume they required sharing of the last mile telephone lines, like long-distance competition in the US in the 90s? Because that's regulation that serves competition. Whereas the lack of regulation led to the AT&T monopoly that had to be broken up twice.
Unfortunately in the US the telcos and cable providers are already privatized, and have only continued to merge and grow larger. So we need something different from the current situation, whatever that may be.
That's an odd indictment of government. If government is taken over by private companies, that's government not working, and it's certainly not a democratic government to blame, it's an infiltrated, corrupt political system.
I may tweak your statement a little that the government is run largely by special interests, i.e. small minority wielding substantial influence (is a union a 'private company'?). Why must my city government make the decision on what company may drive a truck in a circuit to collect my refuse? Why was my local YMCA denied a permit to build an indoor pool while the city built a luxurious, beautiful, money-sucking 'Community Recreation Center' (that has an indoor pool)?
Given the broad prevalence of this type of activity, it seems to at least suggest some fundamental breakdown within the system of representative democracy or, as you suggest, it is an indictment of governments, in general.
This statement is usually made without any substantive evidence to support it, primarily because every monopoly, in practice, can only truly be a monopoly when the government mandates it. When firms are forced to compete on the open market, without the option of non-market strategies, someone will find a way to move in and compete.
This is actually self-evident in the fact that these companies are actively engaging in non-market strategies. There would be no need to practice such tactics if they could simply hold a 'natural monopoly'. Others certainly disagree, but for me, this argument is the one I find most compelling.
What happened in Norway at least was that when the state telephone company Televerket that is now Telenor was privatized, they required them to lease the land lines and mobile spectrum to others at cost.
This worked really well so now there is a health population of companies in both the telephone/mobile and isp sectors.
I can get at least 5 different wired isps and maybe 50+ mobile broadband providers in the outskirts of a town of 60k people.
I can attest that the same thing happened with the telephone company here in South Africa. A while after its monopoly was taken away and regulation required that public infrastructure be rented out to any ISP that wished to use it, things started thriving after a long period of stagnation.
In fact, ISPs thrived, and a lot of them are now installing and contracting the installation of their own Fibre to a lot of residences. Essentially, side-stepping the existing copper infrastructure that kept people tied to the telco monopoly.
I very highly doubt that classifying something as a utility leads to stagnation: Furthermore, I would argue that with some utilities, it is a boon to us if we don't grow. We don't actually need electricity or water use to increase.
In addition, it is quite possible to have competition while still regulating something as a utility. Regulation is really more what the classifacation is about. You want clean water standards, companies that don't turn you off for being a few hours late, and so forth. This stuff is doubly important since in many areas, utilities are a natural monopoly. The classifacation can also ensure that the large companies venture out into small and rural cities and areas. Some folks in the US have only had home phone service less than 20 years despite such laws, after all, and I doubt they would without regulation.
All consumer level electricity supply is classified as a utility in the U.S.. Would you say that electricity transmission and generation have "stagnated"?
> All consumer level electricity supply is classified as a utility in the U.S.. Would you say that electricity transmission and generation have "stagnated"?
That's a pretty bad comparison, though, because the transmission of electricity is as commoditized as possible (given that the electricity gets somewhere, the only thing the consumer cares about is price - there's no such thing as "fast" electricity). So what does "stagnation" on energy transmission even mean? There's no innovation - at least, not that the end consumer would ever know or care about - which is the textbook characteristic of a fungible commodity.
The production is not fungible (see: clean energy production vs. dirty), but that's the part that's also somewhat competitive. For example, in New York City, Con Edison has a monopoly on the infrastructure[0], but you can purchase your electricity either though Con Edison or through an ESCO, which can include clean energy providers.
As a general trend, municipalities which decouple the generation from the transmission and allow competition between companies that generate electricity do tend to have more clean-energy options than those which monopolize both the transmission and the generation.
[0] A few parts are serviced by another provider instead of Con Edison, but basically any given household is serviced by only one power company
The innovation is to find cheaper and more efficient ways to generate and deliver electricity to consumers. Both decreasing costs to customers and environmental impact, as well as increasing profit margins for the company.
> The innovation is to find cheaper and more efficient ways to generate and deliver electricity to consumers.
You're repeating the definition of a commodity, which was exactly what I addressed in my first paragraph.
> Both decreasing costs to customers and environmental impact, as well as increasing profit margins for the company.
"Decreasing cost and increasing profit margins" again is part and parcel of commoditization. The environmental impact is what I addressed in the rest of my comment.
Again, the comparison is bad because the only part of the electric industry which is not fully commoditized and which has the potential for non-commodity innovation is the part that is already competitive and much less regulated.
Broadband Internet, on the other hand, is not at all commoditized. There are at least four different things that consumers can care about besides cost per unit, so comparing it to a commodity utility is a bad comparison.