Yup, nothing's perfect. But I certainly think that the telephone system in the US has served it's citizens very, very well over the years. Anybody can still get a phone in their house for about $25/month, no matter where you live. That, to me, is much more important than any kind of "telephone innovation" that the US system may or may not be missing.
That's supposed to be the point of our government: To provide equal access to basic services to *all* citizens, not to be a competitive, money-making machine that sells products or services to it's citizens. When something is decided to be a public good, such as basic telephone service, that means that every citizen, no matter how poor or remote, has access to the same service that everybody else does. The US telephone service has done that well, and it's time that Internet access is handled the same way, as well.
If you want "innovation", nothing is stopping you from purchasing that "innovation", but your ability to purchase it shouldn't come at the expense of the poorest members of our society having nothing at all.