A barrier to entry is a restraint that shields a firm from the entry of a new competitor. There are three barriers to entry that exist in a monopoly: Natural, ownership, and legal.
A natural barrier to entry in a monopoly occrs when one firm can assemble the full market demand at a lower expense than two or more other firms are able to assemble. For instance a cable provider can provide its customer's cable for a price lower than other companies.
Ownership barrier to entry occurs when one firm holds control of all production and supply. For instance, DeBeers is a company that control the entire production of raw diamonds in the world.
Legal barrier to entry occurs when the governemnt restricts entry in to the market through issuing patents, licenses, public franchises and copyright to a firm. An example of this would be the United States Postal Service. They have the exclusive right to deliver first-class mail, they are a public franchise. A patent is an exclusive right issued to the inventor of a service or good. A license isseud by the government to a firm manages the entry into certain professions, occupations, industries. A copyright is an exclusive right that is issued to author or creator of a literary, musical, artistic, or dramatic piece.
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I like the cable company example that you used. It is interesting to see the process of that natural barrier slowly going away with the satellite companies and providers such as Verizon and Knology. That natural barrier made it nearly impossible for any company to attempt to take on the cable companies for a very long time though.
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