If there were say 7 or more realistic ISP choices per typical customer, THEN competition could work its magic, Adam-Smith-style.
Call me a raging socialist, but what I would rather have is municipal/PUD fiber run to the homes, and then be able to select the service provider that uses the publicly owned infrastructure. This works very well in Chelan and Douglas counties in WA. The PUDs there run the fiber, and look after the physical plant, and then the residents of the counties can buy service from any one of several different ISP and TV providers. Additionally, if you're a commercial setup, you can get transit from Level 3 and/or Zayo.
It's really the best of both worlds, a lot of competition for service, and very reasonable rates for the physical plant.