Because it would complicate having multi-billion dollar exits. The VC's don't care about creating sustainable businesses that create value for their users. They care about creating runaway hits that they can make billions of dollars on when they IPO.
This is a flippant response to a deep question.
Mutuals work well for utilities because they're not required to invest for the long term, require public support and largely operate on existing physical capital. External capital is, to date, the best system for sponsoring disruptors and for building out new capital.
Just as private ownership isn't the solution for everything, it isn't anathema for everything. Presuming so is falling for the same mental shortcuts that produced PG&E.
...uhm, shouldn't utilities be required to invest for the long-term?
The different between should and did are incentives. Utilities have no incentive to invest. (They do have an incentive to spend, which if enabled by politicians, generally yields pricey, useless contracts for cronies.)
A good case study is in wireless providers in the U.S. and EU. American providers are private; European ones are more utilities. The utilities are cheaper; their CAPEX (and executive compensation) is lower. American cities thus end up with--on average--faster, more-expensive service than European cities. There isn't a better solution, just different ones for different goals.
European wireless internet providers are not private? That's news to me, can you give me some examples? I don't think that would even be permitted under EU competition law, which forces member states to create markets in those areas.
Actually AT&T, before being broken up, ran under a regime that required it to invest and gave us a lot of foundational tech and basic science that still serves us today. Though the stock and bonds were traded on the public market they were so tightly regulated they were more like an of-balance-sheet entity like Fannie Mae.
Of course under such a regime they also found various loopholes and such that held us back in other ways. But since the breakup, infrastructure investment has plunged.
In the net I'm not sure if it was good or bad. Just pointing out your assertion is not absolute.
However I couldn't find a source on the quote about them being required to invest in R&D. It looks like Bell Labs was founded in the 20s, well before any significant corporate regulation took place, and prior to it's founding in 1925, Western Electric and AT&T had been operating their own separate yet active research departments.
really this is a regulatory failure. see e.g. https://www.wsj.com/articles/a-cat-and-mouse-game-pg-es-long... . Harris largely did nothing FWIW; to be fair it's not clear that any other regulator would do anything differently.
Net Present Value generally recommends against what most people would call good stewardship of a finite resource. It seems likely that the mental model behind NPV doesn't work out over long timeframes.
What do "stewardship" and "resource" mean? Who agree on one of those definitions? Who form a natural conflicts with them?
Considering stewardship of natural ecosystems. Does that mean holding it in stasis? Keeping out human effects? How do you know if a snail went extinct because of natural or human factors? Which model influences that decision?
The chief advantage--and defining feature--of economic ownership models is they convert almost every question into currency. That seems base at first. But it enables competing sets of goals to be discussed within a common language.
If we won't assign natural resources a dollar value, and a set of owners incentivized to defending that value, or protect them absolutely under the law, those resources will be lost. (If there is a silver lining to California's NIMBYs, it is this. That energy results from an ownership system and defense mechanism. Tweak the variables and that energy could fight for our wetlands.)
Obviously capitalism is efficient, but when it comes to a regulated monopoly like PG&E, I see it like a cost plus government contract.
I invite the folks downvoting to explain how capitalism works with a market monopoly. Since pointing out government exists to prevent just such a situation is apparently an unpopular opinion.
However post-2008 world is one where (1) the government will probably step in and rescue the people who were lending the money and (2) there are lunatic low-interest policies that encourage lending to anyone with a pulse over all forms of sane weighing up of risk.
So why not fund businesses that burn money? The problem in the story isn't antitrust, it is low interest rate policies that excessively favour borrow-and-spend tactics.
The whole build a product, attract users, (big) exit, incredible journey cycle can feel pretty toxic at times.
I am not so sure. The VC's want you to either have a billion dollar exit, or fail quickly. Most owners would be pretty happy with a multi-million dollar a year sustainable business.