Basically anywhere that the structure of costs makes it more efficient for a single firm to serve a market. High upfront capital costs and low maintenance relative to capital make it hard for second entrants to follow, because the incumbent has already paid down some or all of their capital cost and can cut prices to the marginal cost of operation to drive out the entrant -- but the entrant must pay off the capital as well.
If the capital costs are low, this isn't as much of problem. With some understanding investors and creditors an entrant can match the incumbent.
But when you have to build millions or billions of dollars of stuff just to get started, that's much harder to arrange.
But I'm asking for a specific example of a natural monopoly that isn't the result of infrastructure (which is best not even done privately and is best a public good) and can't have its prohibitive costs to enter the result of artificial government scarcity (arguing a nuclear plant is prohibitively expensive to build because the designs are all patented, for example, falls into that category).
I just can't think of one. Almost any "natural" monopoly (roads, healthcare, power grid, network cable, etc) I think should be done by local government, not private business, because structural aspects of society aren't effective platforms for competition if they just supply the foundations to build markets upon.
Actually, I just thought of one - maybe agriculture. While it is structural, it isn't an inherent infrastructure because it has specialized purpose. The post green revolution has demonstrated (though I imagine it is the result of regulation this happens) that megafarms are the most efficient way to organize modern farming. This naturally leads to a few big players because the cost of equipment to properly maximize productivity of land has high expenses (though they aren't at a comparable scale to say, a road network, or laying fiber in a city - one tractor, plow, tiller, etc plus the seed, silos, barns, etc, but these are tools to maximize productivity, not infrastructure).
It might be the product of land ownership and zoning, but I'm only familiar with my local zoning code, which has a large Mennonite population, so most of the farmland in the region is restricted from being sold for other purposes. The midwest is a much different story that I'm not familiar with.
We're talking past each other. I'm saying natural monopolies exist; you're saying they should be done as public enterprises. Those are two related but distinct things.
I'm saying there are no natural monopolies that are not systemic infrastructure. The platforms you build other things upon are often natural monopolies, but those I argue should never be privatized in the first place, so I want to hear of natural monopolies that are not in that category to justify the argument that some economic system will orient itself where one player can heavily exploit its customer base without introducing ample room for competition due to prohibitively high barriers to entry / time to market (where these forces are significantly higher than the prospective returns).
I no longer understand what you are arguing. You want natural monopolies that aren't natural monopolies. You want them public but not public. I am sincerely lost.
I don't buy that is a monopoly. The networking effect alone is not enough to call it a monopoly, and I think the natural end state is social networks with interoperable APIs. It is just a natural opportunity cost with a high valuation since it requires a core peer group to follow, but nothing prevents you from building a competitor. You would have a slow adoption rate, and would need to compete on features to attract the nerd crowd, which would be followed by their friends, and in a delay, the peers and family of them, but I think the market movements in social networks are more comparable to real social and cultural shifting rather the instantaneous results entrepreneurs expect.
I don't think in a decade the closed social networks will last, for the interopt reason. The value proposition of a common platform of profiles is too strong long run not to take over.
