Opinions differ as to the characteristics that an industry must possess to merit classification as a public utility, since all industries in a sense serve the public. By its nature a public utility is often a monopoly and as such is not prevented by competing companies from charging exorbitant prices. It usually operates under a license or franchise by which it enjoys special privileges, such as the right of eminent domain. Finally, it may supply an essential service, such as water or light, the unavailability of which would injuriously affect public health and welfare. From an early period there was public regulation of canals, turnpikes, toll roads and ferries, inns, gristmills, and pawnshops. Docks, sleeping cars, commodity exchanges, warehouses, insurance companies, banks, housing, milk, coal mines, and (in the 20th cent.) broadcasting, are other types of goods and services held to be affected with public interest. Important utilities that satisfy the vital needs of large populations include water, gas, and electric companies; transportation facilities, such as subways, bus lines, and railroads; and communication facilities, such as telephones and telegraphs. In most European nations such industries have often been owned by the state, although many have been privatized in recent years. In the United States, however, many public utilities are privately owned.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.