You are correct, but only at unrealistic levels of bad. A potential competitor risks that they lower the prices after the have dug in the pipes and that is enough that the competitor is bankrupt. Even if water quality is the issue, it is easier and cheaper for the incumbent to fix the issue than for you to dig in new pipes. Only in the case where the incumbent has worn out pipes that all need to be replaced at once (unlikely - pipes last a long time and we have had good success relining pipes in many cases: leaving only a minority that need expensive replacement at any one time).

Because the bad has to be unrealistically bad before someone can compete nobody sane will.

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CGMthrowaway 5 hours ago | parent [-]

>only at unrealistic levels of bad

Bad water or water service is not unrealistic.

It took FIVE YEARS for Flint Michigan's water to be re-declared "safe to drink without a filter." The solution involved FEMA and the National Guard.

That can't have been the best way.

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bluGill 4 hours ago | parent [-]

Even if allowed it would take more than 5 years for a private company to put in enough pipes to compete in Flint.

	▲	CGMthrowaway an hour ago \| parent [-]
		It would not take 5 years for a competing interest to complete a takeover bid of the water utility and implement faster/better fixes. Nor would it take 5 years for water customers (if they could) to divert the money that funds the municipal water district away from them and towards an alternative like water filtration or truck deliveries