Many countries such as Japan and France have succeeded in the broadband field, paradoxically, precisely because of Government intervention: at some point they decreed that copper phone lines to their constituents' houses were no-longer the sole operating property of the local phone company. After all, phone companies have in most countries throughout history consistently enjoyed comfortable government subsidies to deploy their infrastructure, when not owned and operated by governments themselves.
The Industry jargon defines this process as Local Loop Unbundling. It provides a framework for allowing competing companies to leverage today's infrastructure to offer their own broadband-internet-powered services: Voice and Video communications, interactive, custom-tailored entertainment. E-mail and "the Web" are "so" 1995 and no-longer the "killer applications" of the Internet. They're insanely useful starting points.
Having enjoyed comfortable taxpayer-subsidized monopolies for the better part of a century, such competitive landscapes are a direct conflict of interest for the traditional phone companies.
In the U.S., they've been rabidly lobbying to keep their monopolies intact, under the guise of preserving our cherished capitalistic principles, by parroting feel-good phrases in the wrong context: "Government Involvement is bad! Let market forces do their thing!". But in this case, we're talking about network infrastructure. It makes perfect sense for local government to largely subsidize and work with the private sector on the deployment of such infrastructure, and lease access to it, at cost, to all businesses willing to compete. It is a far more efficient approach, at long last enabled by today's technological advances and the Internet Protocol.
Consider another type of infrastructure: sidewalks. A municipality might happily front costs, or work with private developers to build sidewalks in an affluent area to attract new tax-revenue-generating businesses. In today's broadband landscape, we're looking at a narrow sidewalk with a 2-story Verizon shopping center on it, and perhaps an SBC shop 2 miles down the road.
As we blindly grant "right-of-way" to companies such as Verizon, letting them pony-up all the costs of digging trenches in our streets to deploy fiber connectivity in a few lucrative areas, we can't refuse them the right to solely own and operate this network. But few, if no other companies can afford similar deployments on their own, and Verizon will hence have very little incentive to compete on the quality of services they offer, because after all, they're the only ones in the game.
Nothing will prevent them to limit what it is we can do with the bandwidth they offer us, such as obtaining phone or video service from 3rd-party providers.
And this touches on the issue of Net Neutrality which Dave Coustan is covering quite well over at EarthLing.
See also: Fire your Phone Company. Today.
See also: Net Neutrality, Clear Disclosure?
See also: If we build it, they will come.
update: 2/15 See also: this great comment on somebody else's blog:
v) Network neutrality
I don’t know if you misunderstood the network neutrality concept or not, but your analogy is way off. If major airlines were allowed to act like telcos on network neutrality then the airline would be allowed to charge different prices on the same seat on the same flight depending on your FINAL destination. “Going to France after spending the weekend in NY with your sister? That’ll be $500 extra, ’cause we don’t like them frogs at United.”