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I'm also curious about the "natural monopolies can't occur" assertion. It just doesn't seem to have any traction when I review history. They may not *last* but they certainly occur.
Now in Time-Warner's "local monopoly" case, they've manipulated government to exploit local monopoly control. If government were stronger and regulated more thoroughly for the benefit of the *people*, it wouldn't be an issue. If a government is going to permit a corporation to be a local monopoly - it MUST exert control over it and constantly remind the corporation that it is a privilege to be given that slot. Most monopolies I can think of in American history arose from the government wanting to streamline the development of public infrastructure (railroads, communications). And there was often corruption. Just glad they didn't think of that with the interstate highway system.
But over the last few thousand years, I can point out any number of "natural monopolies" -- though often they occur when government is not present (or has failed) and involve the "business" becoming the defacto government in an area. Some of the "oil towns" in the 20th C. come to mind.
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