While government power is the main source of monopolies, the free market is far from perfect protection itself. Natural monopolies really exist.
The best example is anything that requires a wire run to every home. The issue is high fixed costs whether or not someone becomes a customer, with low operational costs after. Therefore if a second company runs wires through the same neighborhood, between them you have large sunk costs which a competitive price that does not let you recoup the costs of infrastructure.
Taking numbers from http://journals.uic.edu/ojs/index.php/fm/article/view/1072/9..., the cost of running a wire by a home in the early 2000s was roughly $750, and the fixed cost of connecting it is about $750 again. The cost to operate that line is under $15/month. Those costs are surprisingly close to constant across a wide variety of kinds of cities. (Dense cities require less distance, have more regulation, and more other things running through the space that you have to worry about not breaking.)
To give a historical example, Bell Telephone ran wires everywhere. They operated under various anti-trust regulations for a long time. They were barred from cable TV and so another set of wires got run. Then Bell was broken up by force, with interoperation rules to prevent monopoly again. Today, with the internet, we have seen a convergence of these two sets of wires. So most of us live in places where we have one or two choices for getting internet over a wire. One possibly from a former cable company like Cox. One possibly from a former telephone company like Verizon. Very few of us have a third option. Without government involvement it is unlikely that 2 options will remain indefinitely viable for most of us.
Thats why most economically obvious thing for a neighbourhood is to own the infrastructure not rent it. If it were not for "i-do-everything" govts, neighbourhoods would have learnt this long ago. Even Govts owning would have been ok, but then we would not have crony capitalism.
The best example is anything that requires a wire run to every home. The issue is high fixed costs whether or not someone becomes a customer, with low operational costs after. Therefore if a second company runs wires through the same neighborhood, between them you have large sunk costs which a competitive price that does not let you recoup the costs of infrastructure.
Taking numbers from http://journals.uic.edu/ojs/index.php/fm/article/view/1072/9..., the cost of running a wire by a home in the early 2000s was roughly $750, and the fixed cost of connecting it is about $750 again. The cost to operate that line is under $15/month. Those costs are surprisingly close to constant across a wide variety of kinds of cities. (Dense cities require less distance, have more regulation, and more other things running through the space that you have to worry about not breaking.)
To give a historical example, Bell Telephone ran wires everywhere. They operated under various anti-trust regulations for a long time. They were barred from cable TV and so another set of wires got run. Then Bell was broken up by force, with interoperation rules to prevent monopoly again. Today, with the internet, we have seen a convergence of these two sets of wires. So most of us live in places where we have one or two choices for getting internet over a wire. One possibly from a former cable company like Cox. One possibly from a former telephone company like Verizon. Very few of us have a third option. Without government involvement it is unlikely that 2 options will remain indefinitely viable for most of us.