Actually, the FCC's action will have exactly the opposite effect. I own and operate a small, competitive ISP, and am quite willing to (and capable of) going up against any competitor on a level playing field. But I simply wouldn't enter any market where the city was providing service. Why? Because the city would engage in all of the following anticompetitive and predatory practices:
* The city would completely control my access to rights of way and pole attachments, and would be motivated to keep me from getting that access or make it expensive;
* I would be taxed and the taxes would be used to subsidize my competitor;
* The city would engage in horizontal monopoly leverage from its other monopoly businesses (trash, water, sewer, and in many places energy) and would enjoy cross-subsidies from them; for example, it wouldn't have to build a new billing system but could use its existing one;
* The city could also use its ability to tax, and bonding authority, to obtain capital for the buildout at bargain rates;
* The city, with its deep pockets and by expending some of that capital, could engage in predatory pricing, offering its service below cost due to taxpayer subsidies. It could do this at the outset, to take customers away, or possibly permanently;
* The city, because it provided those other services, would GET PAID more easily than I would because users wouldn't want their water, etc. cut off if they didn't pay the bill;
* The city would know when both owner-occupied and rental real estate was turning over (because of changes in the party being billed) and so could always sell to people as they moved into a new home before they would have a chance to consider my service;
* The city ISP would get the lucrative business of the city itself (eliminating one of the largest potential customers), as well as that of other government entities such as the county government and state government offices; and
* The city, under the FCC's new Title II regime, could demand franchise fees from me that it would not have to pay itself.
So, if you put yourself in the shoes of a hard working local ISP (which I am), or of a customer who wants choice, this no longer seems like such a good idea. Any ISP entering the market would have to fight an uphill battle against City Hall. So, new ISPs will not enter the market and existing broadband providers will have a strong incentive to pull out, leaving a monopoly. What is needed is FAIR, PRIVATE competition, not the unfair competition that turning unaccountable city bureaucrats loose would bring.
Our ISP is in a distant rural area, and the peering point to which we connect is not one of the ones where Netflix peers. We need to cache; this is the situation that caches are for. But just as banks will only give you a loan if you don't need it, Netflix will only give you a server if you don't need it.
Total BS. As the operator of an ISP (and a former columnist for InfoWorld who was dismissed because I didn't go along with Microsoft's monopoly propaganda... not much different from monopolist Google's fearmongering above), I can say with authority that no ISP wants to limit what sites users can visit. That's the scare tactics that the lobbyists are using to push so-called "network neutrality" regulations, which are not neutral at all; they're designed to tip the economic balance away from ISPs and toward content companies such as Google. The regulations prohibit ISPs from charging more when content providers waste bandwidth or attempt to demand priority delivery of their content -- in short, when they ask for something for nothing. They also prevent ISPs from blocking software that exploits the ISP's network for the benefit of a content provider. In short, they're all about regulating the Internet in ways that benefit powerful corporations. Worse still, they let the camel's nose into the tent. If the FCC can regulate the Net to advantage Google, it can also regulate it in other harmful ways. Want to see censorship? Government blocking of sites? Even more intense spying on your Internet activities? If these regulations are not overturned, the precedent will open the door to all of those things.
There's too much competition. I live in a small, rural town of 28,000 souls, and we have 12 (count them!) facilities-based ISPs and more non-facilities-based ones. ISPs know that if they do anything that riles customers, those customers are history.
On the other hand, every government that's gotten control of the Internet in its country has censored it. Without exception.
"Though a program be but three lines long, someday it will have to be maintained." -- The Tao of Programming