Natural monopolies are a unique threat to competition, because they don’t rely on collusion, and can’t easily be broken up. Imagine if the government ordered Facebook to split into two social networks. People would eventually abandon one and move to the other, to be connected to more of their friends, and the monopoly would return.
If the Internet breeds natural monopolies that crowd out competition, it could spell trouble for the U.S. economy. That will lead to most new ambitious companies failing -- exactly what Guzman and Stern have seen happening in the past decade and a half. The result won’t just be a less dynamic economy, it will also be a less efficient one, as monopolies jack up prices above their efficient levels.
This is a troubling possibility because the remedy isn’t clear. Facebook and other tech companies probably can't be regulated like utilities, and even if they were, the benefit would be ambiguous. Natural monopoly is an economic threat that the U.S. simply hasn’t had to cope with very much in the past, and policy makers don’t have good countermeasures available.