Natural Monopoly Business "into The Control Re-thinking

According to the development of the natural monopoly theory, the tradition is considered to be the industry of the natural monopoly, it is not the natural monopoly in complete meanings with the expansion of the demand and progress of technology, therefore natural monopoly industry is divided into non- natural monopoly business and natural monopoly business. As to non- natural monopoly business, the government should deregulate it and introduce the competition; To the natural monopoly business (the economy of scale and the economy of scope), the corresponding policy recommendations are that the government should regulate the entry in order to obtain the economic income of the scale and scope , avoid the destructive competition that re-construction brings at the same time . These policies are obviously closely related to definition of "natural monopoly ". Defining the natural monopoly through studying of the economist, we find: Looking theoretically, economists' descriptions of industry's characteristics of natural monopoly are rigorous, from this meaning, there is no problem in distinguishing natural monopoly from non- natural monopoly business. But in real situation, lacking enough testing into evidences, in technological economy at least, it is difficult to confirm natural monopoly conditions. In addition, existing empirical researches often cause the conclusions different from traditional theory to the industry too. In this situation, the government' policies about the natural monopoly industry' s entry should be discussed again.Especially in china, these industries were built by the government. Absence of effective regulation, these industries had become some interest groups. They deprived customer' s surplus and put them into productor' s surplus by the right of administrative power. A part of them were used to build the luxury offices, buy some automobiles and payoffthe clerks. It is obviously unfair welfare transfer.This paper argued that whether should government keep entry regulation or not in these fields is not depend on the hypothesis of traditional theory but should on the analysis of the cost and profit of regulation. The purpose of this paper is to provide a hypothesis that competition should be introduced into network fields of natural monopolies and to verify the theory model of this hypothesis by using data of telecom industries and power industries.