Utilities are not a natural monopoly because we have multiple examples of competition lasting decades in municipalities. This is not compatible with the economic concept of natural monopoly. It’s a disproof by existence.

If you want to discourage too much digging up the street charge people to do it. If they’re doing too much charge more. Problem solved; the various companies that want to dig up will come to a mutually agreeable arrangement on cost sharing if they want to dig up the street.

Multiple competing companies going after the most profitable customers is very much not proof of the existence of natural monopoly. It’s also perfectly fine. If you want uneconomic customers served for reasons of equity pay for it. You can either pay for it directly and make the costs visible or you can mandate universal service and spread the costs across all customers. Either way the cost is paid; you don’t get anything for free.