Our modern lifestyles are entirely dependent upon our household amenities. From electricity to water and phone service to wi-fi, the costs of these utilities often form the basis of our personal finances. Unfortunately, most regions lack choice when it comes to these essential services. Consequently, the benefits of competition cannot work to lower rates and improve quality. Without healthy government regulation and a willingness to pursue interventions against the public sector, these utility monopolies can pose a real danger to our society and our way of life.
In general, businesses can maximize their revenue streams from their products and services when operational costs can be structured so they are equalized across an entire industry in order to afford businesses the capacity alone to manipulate consumers price increases until consumers are unwilling, or unable, to pay. With this power, monopolies will test the waters by steadily raising prices until consumers revolt. In the case of utility monopolies, consumers can either pay or be forced from the market, which is usually a last resort as consumers need their utilities, while government intervention becomes the only solution.
Due to the efforts of those in favor of deregulation and a lack of accountability for poor performance, regulation, oversight, and intervention are often delayed and ineffective. For private utility monopolies, proper government engagement could help ensure consumers do not see unreasonable price explosions on a yearly basis and cost cutting measures that result in hazards. Unfortunately, it is easy for businesses in industries, where there is a lack of competition on a regional basis during an era of deregulation, to create operational costs that can be passed onto consumers while displacing costs in other ways to increase returns with public hazards as byproducts.
For public utility monopolies, costs are not so easily controlled for services as they can easily be displaced onto customers or a broader base of taxpayers. While quality and efficiency can be an issue until a crisis arises that then translates into a political movement, hazards may be less likely for public utility monopolies as political repercussions are always present. Due to a push for privatization, these utility monopolies often fall under extra scrutinize before they can mess up. On the flip side, long serving unelected officials in the public sector may fail to aspire to better, more efficient service as they have few incentives. This means consumer prices will likely inflate.
Moreover, utility monopolies are the most influential of all monopolies, whether private or public. Because utilities are near absolute necessities, people have no choice but to pay in spite of unreasonable price hikes and weak service. As such, unless the economy collapses, utilities have little incentive to improve service and decrease price. To make things worse, the expenses and infrastructure required to provide a utility usually leave few options in terms of choice. This means the dangers associated with a utility monopoly are very real to our modern way of life and our economy while utilities monopolies represent the norm, not the exception.