Will nanotechnology reduces the 'natural monopoly' character in water industry?

Monday, August 20, 2007

The answer is likely to be yes, but if the question is how, maybe the its the engineers that should answer. What is relevant to be discussed is, "what is the legal implication"?

Most water industries are heavily regulated, because it is a natural monopoly (i.e. more seller means higher price, one seller is optimum price). I have red a research indicating that the scale of natural monopolies in the water industry varies. In the developed economy and high-tech countries, the scale of the natural monopoly reduces.

Thus, a reduction in the character of natural monopoly will allow more competitor to enter the market. For example, in water industry, more water supplier might be able to enter the common carriage through an economically feasible schemes. Regulators and network owners should not prevent them from entering these 'essential facilities' because it could amount to a violation of competition law.

This also implies that governments may need to adjust its regulatory mechanism.

But before we discuss this further, I'd like to hear from the engineers. In what way would nanotech makes water purification/treatment cheaper?