The first company to enter any market will always benefit the most. All industries have some fixed costs. And breaking into an existing market is always difficult for a new company. These things are not specific to this industry, yet there manages to be competition in other industries. Are the fixed costs really that high? Does that apply everywhere? I won't buy that without a strong argument, which would have to provide some numbers. I have an article that describes similar industries in which natural monopolies were claimed, yet successful competition existed in many places.

Can you provide any specific criticisms of arguments made in this article? It's a long one, so feel free to address just the "cable TV" or "telephone services" sections. I've reproduced three paragraphs of the section on cable TV below.

https://mises.org/library/myth-natural-monopoly

Cable television is also a franchise monopoly in most cities because of the theory of natural monopoly. But the monopoly in this industry is anything but "natural." Like electricity, there are dozens of cities in the United States where there are competing cable firms. "Direct competition … currently occurs in at least three dozen jurisdictions nationally."[1] ... The cause of monopoly in cable TV is government regulation, not economies of scale.

Also like the case of electric power, researchers have found that in those cities where there are competing cable companies prices are about 23 percent below those of monopolistic cable operators. Cablevision of Central Florida, for example, reduced its basic prices from $12.95 to $6.50 per month in "duopoly" areas in order to compete. When Telestat entered Riviera Beach, Florida, it offered 26 channels of basic service for $5.75, compared to Comcast's 12-channel offering for $8.40 per month. Comcast responded by upgrading its service and dropping its prices.[1] In Presque Isle, Maine, when the city government invited competition, the incumbent firm quickly upgraded its service from only 12 to 54 channels.[2]

In 1987 the Pacific West Cable Company sued the city of Sacramento, California on First Amendment grounds for blocking its entry into the cable market. A jury found that "the Sacramento cable market was not a natural monopoly and that the claim of natural monopoly was a sham used by defendants as a pretext for granting a single cable television franchise … to promote the making of cash payments and provision of 'in-kind' services … and to obtain increased campaign contribution."[3] The city was forced to adopt a competitive cable policy, the result of which was that the incumbent cable operator, Scripps Howard, dropped its monthly price from $14.50 to $10 to meet a competitor's price. The company also offered free installation and three months free service in every area where it had competition.

[1] Thomas Hazlett, "Duopolistic Competition in Cable Television: Implications for Public Policy," Yale Journal on Regulation, vol. 7 (1990). http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic...

[2] Thomas Hazlett, "Private Contracting versus Public Regulation as a Solution to the Natural Monopoly Problem," in Robert W. Poole, ed., Unnatural Monopolies: The Case for Deregulating Public Utilities (Lexington, Mass.: Lexington Books, 1985), p. 104.

[3] Pacific West Cable Co. v. City of Sacramento, 672 F. Supp. 1322, 13491340 (E.D. Cal. 1987), cited in Hazlett, "Duopolistic Competition."