... the Telco and Cable companies bringing you this commercial Internet, this bastion of free enterprise you are talking about, is about as heavily subsidized as an industry can get?
The public Internet wasn't developed by the Telco and Cable companies. It was developed by garage shops that started as small ISPs or equipment companies. Telcos fought it, while cable companies watched from the sidelines.
The "Mom and POPs" built the public net at first. Some of them were literally in people's bedrooms. (At least one I know used rack-mounted equipment but built its own 19" rack panels out of two-by-fours.)
Many of the equipment companies, too, started in garages. Cisco, for instance.
Once things were up and running the Telcos decided they were missing out on a good thing and tried to enter the marketplace. But at first they did it by trying to sell their own overpriced ATM-based services. Others continued to compete rings around them - though often leasing their copper wires for the last mile and various digital carriers for long-haul - or leasing those from the more competitive long-distance carriers.
DSL and cable modems were both developed, not by the Telco and Cable companies, but by private equipment manufacturers (including one spun out of Bell by the antitrust decision), trying to sell boxes at a profit. Some cable companies used this new stuff to leverage their installed base and get into the ISP game. Other ISPs, such as Covad, used DSL to push fat bandwidth through legacy Telco copper leased at regulated wholesale rates.
What finally happened is the FCC relaxed the access requirements on the legacy telcos - deciding two competitors was "competition" (when it takes three to four, minimum, to destabilize defacto price fixing and drive the price down towards cost). The tellcos immediately started squeezing their competition in the ISP market (for instance, Covad), eventually doing in or crippling pretty much everybody but the Cable companies (who also had legacy subsidized copper in place) and some rural little guys.
Telcos and cable companies, with their government subsidized infrastructure and rights-of-way, are the bulk of the ISPs NOW. But they AREN'T what "build the Internet". They're the big fish that ATE it.