[cvet]

Good points—the only thing I'd say is that we're talking about a really capital intensive industry where the incumbent may be able to drop prices to compete with a newcomer. Example: If company B comes to a town where company A is already operating, company A can just offer new subscribers the same terms as B, making it hard for B to compete. If B can anticipate A's action (not that hard in this case, because I can do it after a couple of beers) then B may choose not to invest because B's road to a profit requires producing at a lower marginal cost than A and undercutting A's prices. They actually have to pull subscribers away from A. If A is already producing at a low marginal cost but overcharging, then A has the flexibility to fight a price war (and potentially win).

Ha maybe I'm banking too much on those competent government officials. The variance in quality is certainly high.

[baddox]

Regarding your example of companies A and B, I think one obvious solution is service contracts.