[charcircuit]

Alternatively someone could start up their own commercial water supply business if other businesses feel their only option is unfair. By acting poorly towards businesses the original company would have messed up their long term market share for a short term profit.

[freedomben]

As a result of the way water rights work in most areas, this is likely not true. You aren't allowed to use the water even if it runs right through your property if you don't have water rights.

You could maybe import water through trucks or trains or something from somewhere else, but the costs for that would be brutal. Then the incumbent can bankrupt you instantly by undercutting your price, and then hike it back up as soon as you're gone. The Robber Barons in the 19th century used this very tactic frequently in anti-trust situations to hamper competition

[charcircuit]

That would make this a poor analogy as anyone can create their own hardware + software ecosystem.

>Then the incumbent can bankrupt you instantly by undercutting your price

This could be mitigated by longer term contracts so you are guarenteed a certain amount of payment to make it worth your time before the other company lowered their prices to start competing.

[Nevermark]

Obtaining water rights in some other locale, and piping it into a town some way, is probably easier than competing against a trillion dollar entrenched tech ecosystem.

But the water system, or general utility problem, is interesting for many reasons.

Dual sets of infrastructure double the supply costs for a critical input like water, without actually increasing the supply that nature provides.

The solution to keep costs and prices down is then generally to give (or accept) a water supply monopoly, but with price regulation. That is the common solution to avoid price gouging in that monopoly situation.