TL;DR: some businesses will just be monopolies, and that's why there are either city services or regulated monopolies.
Some things are considered "natural monopolies": "an industry in which it is most efficient (involving the lowest long-run average cost) for production to be permanently concentrated in a single firm rather than contested competitively." (wikipedia) You will find traditional "utility" companies in this category. Since the market would trend toward a monopoly, local governments either chose to take on that role (city sanitation, city water, etc), or chose to create a "regulated monopoly" (like Arizona Public Service, Cox Cable, etc).
Where the real problem occurs is when an industry changes and it should no longer be considered a natural monopoly but the out-of-date regulations block competition. For example, if Google wants to lay fiber there are some places where it would legally be unable to do so because it would be competing with the regulated monopoly, which is only regulated and de facto protected (at a supposedly lower profit than it would make if unregulated) because there is no competition.
Oldsters will remember when there literally was The Phone Company, which was American Telephone and Telegraph Company (AT&T), a subsidiary of Bell Telephone Company. This company was literally The Phone System. At one time they owned EVERYTHING, including the phone wires in your house, and NOTHING could be attached to those wires except equipment owned by Bell Telephone and rented by the consumer. They also were THE Long Distance provider.
Eventually the telephone industry advanced to the point that it was no longer a natural monopoly and the regulations got in the way. AT&T was broken up and only the hard wires to the house are considered a monopoly item. And now, with VOIP, even those aren't always necessary.
Electricity has started down this route where you have to pay the APS portion of your bill relating to the physical transport medium for the electricity, but you can select a third-party from which to buy the actual electricity. (Throw in solar and you've raised a little issue as to how that transport medium is billed, which is a topic for another time.)
With ISPs we're in that painful period where out-dated regulations are holding things back instead of protecting consumers by capping prices. ISPs should be divorced from from the physical medium and you should be able to chose which ISP that you want to connect to over your Cox Cable (for example). There are, obviously, many technical details that would need to be worked through, but the coax or fiber optic cable running into my house should not lock me into that company's ISP service.
Note that this does NOT solve the problem of how to get a high-speed connection to everyone. In some cases there is just no business case that can be made to run a high-speed line to service three houses in a five-mile radius twenty miles down a dirt road in the Arizona desert. And yes, those places do exist. These are why "essential services" have must-serve provisions in their government-monopoly agreements and why these consumers pay the same rate as everyone else. (Also note that when people chose to build in places like this they are charged SUBSTANTIAL fees for laying power cables, for instance, if they are more than a certain distance from an existing line. This is why the really isolated places like generate all of their own power.)
