> Success of these has varied. The utilities make a big profit while people struggle to pay utility bills
That kind of thinking absolutely kills infrastructure investment. To use British Telecom as an example. After privatization, BT kept its monopoly on the last mile, but rates were set to ensure that it was quite profitable. (About as profitable as say Time Warner in the US.) That ensures that BT had the incentive to invest and keep pushing fiber deeper into its network. Today, broadband speeds in the UK are significantly faster than in say France. But it also results in huge political backlash. “BT makes 20% profits while people can’t pay their utility bills!”
Sure. But it’s money that motivates BT to spend money on infrastructure investments. No matter how you structure your infrastructure markets, ensuring adequate investment is the single most important thing. You can do this with markets or quasi markets, or you can do it through government agency decision making. With the former, you need to ensure attractive returns on investment. Not merely bare profit, but enough profit so that the billions of dollars don’t get invested elsewhere. Having the government make the decisions doesn’t magically eliminate the issue of ensuring adequate investment. It makes it even harder! With the government is on the hook for making investments, you’re always subject to pressure from other priorities. There is a reason roads and bridges and water systems in the US are crumbling. We’ve dramatically underinvested.
That kind of thinking absolutely kills infrastructure investment. To use British Telecom as an example. After privatization, BT kept its monopoly on the last mile, but rates were set to ensure that it was quite profitable. (About as profitable as say Time Warner in the US.) That ensures that BT had the incentive to invest and keep pushing fiber deeper into its network. Today, broadband speeds in the UK are significantly faster than in say France. But it also results in huge political backlash. “BT makes 20% profits while people can’t pay their utility bills!”