Public Utility

A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and a regulation ranging from local community-based groups to statewide government monopolies.

The term utilities can also refer to the set of services provided by these organizations consumed by the public: coal, electricity, natural gas, water, sewage, telephone, and transportation. Broadband internet services (both fixed-line and mobile) are increasingly being included within the definition.

Infrastructure

Infrastructure is the fundamental facilities and systems serving a country, city, or other area, including the services and facilities necessary for its economy to function. Infrastructure is composed of public and private physical improvements such as roads, railways, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications (including Internet connectivity and broadband speeds). In general, it has also been defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions".

There are two general types of ways to view infrastructure, hard or soft. Hard infrastructure refers to the physical networks necessary for the functioning of a modern industry.

This includes roads, bridges, railways, etc. Soft infrastructure refers to all the institutions that maintain the economic, health, social, and cultural standards of a country.

This includes educational programs, official statistics, parks and recreational facilities, law enforcement agencies, and emergency services.

The word infrastructure has been used in French since 1875 and in English since 1887, originally meaning "The installations that form the basis for any operation or system".

The word was imported from French, where it was already used for establishing a roadbed of substrate material, required before railroad tracks or constructed pavement could be laid on top of it. The word is a combination of the Latin prefix "infra", meaning "below" as many of these constructions are underground, for example, tunnels, water and gas systems, and railways and the French word "structure" (derived from the Latin word "structure"). The army use of the term achieved currency in the United States after the formation of NATO in the 1940s, and by 1970 was adopted by urban planners in its modern civilian sense.

Public service

Public service is a service intended to serve all members of a community. It is usually provided by government to people living within its jurisdiction, either directly (through the public sector) or by financing provision of services. The term is associated with a social consensus (usually expressed through democratic elections) that certain services should be available to all, regardless of income, physical ability or mental acuity. Even where public services are neither publicly provided nor publicly financed, for social and political reasons they are usually subject to regulation going beyond that applying to most economic sectors. Public policy when made in the public's interest and motivations can provide public services. Public service is also a course that can be studied at a college or university. Examples of public services are the fire brigade, police, air force, and paramedics. See also: Public service broadcasting.

Sectors

In modern developed countries, the term "public services" (or "services of general interest") often includes:

Courts
Electricity
Education
Emergency services
Environmental protection
Health care
Military
Public transportation
Public buildings
Social services
Telecommunications
Urban planning
Transportation infrastructure
Waste management
Water supply network

Public administration

In modern democracies, public service is often performed by employees known as civil servants who are hired by elected officials. Government agencies are not profit-oriented and their employees are motivated very differently.Studies of their work have found contrasting results including both higher levels of effort and fewer hours of work.

A survey in the UK found that private sector hiring managers do not credit government experience as much as private sector experience.

Public workers tend to make less in wages when adjusting for education, although that difference is reduced when benefits and hours are included.

Public workers have other intangible benefits such as increased job security and high wages.

Characteristics

A public service may sometimes have the characteristics of a public good (being non-rivalrous and non-excludable), but most are services which may (according to prevailing social norms) be under-provided by the market. In most cases public services are services, i.e. they do not involve manufacturing of goods. They may be provided by local or national monopolies, especially in sectors which are natural monopolies.

They may involve outputs that are hard to attribute to specific individual effort or hard to measure in terms of key characteristics such as quality. They often require high levels of training and education. They may attract people with a public service ethos who wish to give something to the wider public or community through their work.

Nationalization and privatization

Nationalization

Nationalization took off following the World Wars of the first half of the twentieth century. In parts of Europe, central planning was implemented in the belief that it would make production more efficient. Many public services, especially electricity, fossil fuels and public transport are products of this era. Following the Second World War, many countries also began to implement universal health care and expanded education under the funding and guidance of the state.

Privatization

There are several ways to privatize public services. A free-market corporation may be established and sold to private investors, relinquishing government control altogether. Thus it becomes a private (not public) service. Another option, used in the Nordic countries, is to establish a corporation, but keep ownership or voting power essentially in the hands of the government. For example, the Finnish state owned 49% of Kemira until 2007, the rest being owned by private investors. A 49% share did not make it a "government enterprise", but it meant that all other investors together would have to oppose the state's opinion in order to overturn the state's decisions in the shareholder's meeting. Regulated corporation can also acquire permits on the agreement that they fulfill certain public service duties. When a private corporation runs a natural monopoly, then the corporation is typically heavily regulated, to prevent abuse of monopoly power. Lastly, the government can buy the service on the free market. In many countries, medication is provided in this manner: the government reimburses part of the price of the medication. Also, bus traffic, electricity, healthcare and waste management are privatized in this way. One recent innovation, used in the UK increasingly as well as Australia and Canada is public-private partnerships. This involves giving a long lease to private consortia in return for partly funding infrastructure.

State monopoly

In economics, a government monopoly (or public monopoly) is a form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law. It is a monopoly created by the government. It is usually distinguished from a government-granted monopoly, where the government grants a monopoly to a private individual or company.

A government monopoly may be run by any level of government - national, regional, local; for levels below the national, it is a local monopoly. The term state monopoly usually means a government monopoly run by the national government, although it may also refer to monopolies run by private entities yet protected or sanctioned by the state government.

Examples

The most prominent example of the monopoly is law and the legitimate use of physical force.
In many countries, the postal system is run by the government with competition forbidden by law in some or all services. Also, government monopolies on public utilities, telecommunications and railroads have historically been common, though recent decades have seen a strong privatization trend throughout the industrialized world.

In Nordic countries some goods deemed harmful are distributed through a government monopoly. For example, in Finland, Iceland, Norway and Sweden, government-owned companies have monopolies for selling alcoholic beverages. Casinos and other institutions for gambling might also be monopolized. In Finland, the government has also a monopoly to operate slot machines.

Governments often create or allow monopolies to exist and grant them patents. This limits entry and allow the patent-holding firm to earn a monopoly profit from an invention.

Health care systems where the government controls the industry and specifically prohibits competition, such as in Canada, are government monopolies.

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