However, the case of a local water reticulation system is sometimes used to argue the case against private ownership of so-called utilities. Granted that if a rival company could freely use the streets to lay pipes, it is highly unlikely to do so if the present company can easily satisfy the community's demand for water unless, that is, profits were extraordinarily high. Before 1884 New York had six gas competing companies, and by 1887 it had six competing electricity generating companies. This competitive situation was a common occurrence across America. There is, for example, always the threat of a takeover if the management does not perform.
Ownership affects decision-making.
Those who own the plant or who are directly responsible to the owners will have to make decisions on the basis of different 'cost structures' because they will be faced by information and opportunities that would be denied to state managers. The fact that there is only one water supplier does not mean he can charge a monopoly price. People are apt to forget how easy it is to conserve water. The third criteria, externalities, is no criteria at all. If the externalities are negative, then let the law enforce property rights.