By my reasoning... absolute competition opened up for all possible companies would probably be too much because their resources would be spread to thin to provide the same level of service to each customer without raising the price.
I agree that an absolute monopoly with no competition at all would charge as much as the population could give and have little to no motivation to innovate. Currently we get some competition by having separate companies available for each different form of connectivity. I'm not convinced this is the ideal way to do it but I'll come back to that.
Now, looking at your examples of competition in other industries, I find your first one very interesting. No, we do not have only 1 car company. However, we really don't have that many. Much like with broadband it takes a large infrastructure to build a car. In the early to mid part of the 1900s there were hundereds of auto manufacturers just in the US alone. Most people could not own an automobile as they were much more expensive than now when adjusted for inflation. It was after the majority of them either merged or went out of business that the price of the car began to come down.
As for operating systems or stores, these are bad comparisons. A single coder with an old computer and some spare time can build a basic operating system. A group of them in an online community can make that basic OS into something which can compete. Once it's written it may be copied virtually for free. There is no backbone to pay for like there is in telecom.
Stores do have a backbone. It's the interstate highway system. It's already built and they don't have to pay for it any more than the rest of us do in our taxes.
Now, about the current form of limited competition. I wrote that I was getting back to this. Currently it's more or less by wire type; coax = cable, twisted pair & fiber = telco. I don't actually see a point in having all of this. All three can carry internet and voice while two of them can carry tv. They are not however equal. Fiber carries more than coax, coax carries more than twisted pair. The telcos seem to get this as most of them progress in replacing their twisted pair with fiber. The cable companies seem to be living in the past as they just keep running more coax. Just look at the new Docsis standard, it uses four coax lines! It is faster than the current fiber offerings but that's only because the current fiber offerings do not completely take advantage of the bandwidth capability of a piece of fiber yet. They certainly can turn up the speed and beat these new four-line cable modems with just one line of fiber! On top of that, given the average failure rate of a single line of coax, shouldn't 4 be 4 times as bad? What a waste!
I don't see the point of having anything but the fiber, except as a way to preserve the current form of limitted competition. I do agree with you that a monopoly of one telecom company would be horrible for consumers. I don't think that having them all in the same area would work as the profit / backbone cost ratio would be too low. Competition might eliminate enough companies to make it work but if it meant they had to operate with the lowest amount of profit then development could stall. How many people are going to pay more to company A which is working on tomorrows network (which isn't ready yet) when they can get the same current service from company B that isn't bothering to upgrade anything? I don't know if an agreement could be made politically to limit the number of companies while still allowing more than one in an area other than the current 1-per "wire-type" arrangement.