There are allways going to be exceptions. Pehaps your town is so small that the big ISPs are not interested in servicing it.
California banned municipalties from enacting franchise agreements in 2006 -- instead such agreements are at the state level. California doesn't have a significant number of places where consumers have a choice beyond the incumbent phone company and the incumbent cable company. Why is this? Probably because of the reasons in my posting that you dismiss with your anecdote.