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Suppose you have a market, to enter which you need to invest capital C. It you get a monopoly, you get profits having net present value M, while if there is competition the total profits from the market have net present value R, where R<M. If R<C then a monopoly is inevitable, and it is likely even when R is somewhat larger, because a new entrant can expect to get only a fraction of the market.

It is true, of course, that government regulations can reduce R and therefore make a monopoly more likely (or indeed by making some dumb exclusive deal). But there is absolutely no reason that government must be the cause. In fact, since R<M there is always some C for which a monopoly is inevitable, and we see this in the ISP market: in areas of low density population, C is higher, and there is more likely to be a telco monopoly. Hence, neutrality laws are likely to be needed anyway.




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