First is that enough people would have a problem with this that it couldn't last. Even apartheid came down eventually. I refuse to believe enough of the population would condone such behavior for it to go on indefinitely.
Second is that I allow for the possibility that some services should be publicly held. Is that privately held water company a hypothetical or does such a thing exist? How do/would they guarantee rights of way across property they don't own? How could anything we currently view as a utility (power, water, phone) exist without government enforcement of their rights of way?