Competition works well for fungible commodities, but not for things like basic public infrastructure which is extremely costly to build and maintain.
I think this is true, and that's why the state grants monopolies to utilities companies.
This is an unsustainable race to the bottom. They both are losing money here and one of the two will eventually shut down their system in this area to stanch the flow of red ink. Then, the other will gradually start to raise their pricing back to the break-even point.
Generally what you are saying is true. After all, that's the reason Comcast isn't improving in most markets; they're already at the top, and offering a better service than the competition.
The one wrinkle here is that Google's business model is not to profit off the fiber, but to use it as a means to sell other products.
I'm not sure how that one will work out. I don't trust large corporations because they're made up of humans, and if humans screw up badly on their own, in groups they screw up by creating an echo chamber and following each other into oblivion like lemmings.
For that reason, large anything (corporation, volunteer group, government, empire) is prone to fail and fail hard. And with the increasing standardization across the industrial world, "too big to fail" becomes a prophecy of the vast consequences that occur when they do. To substitute a colloquial expression: "the bigger they are, the harder they fall."