Let's assume this break between transport (DSL / Cable) and service (ISP) exists -- what would happen to the market?
I can see multiple ISPs competing for a customer across the same infrastructure -- much like dial-up used to be like! If you didn't like your ISP service, you could switch at any time!
The transport company would only connect you to your ISP. So they'd want to reach as many houses/businesses as possible. Its possible that it wouldn't be very cost effective to try to tier services based on speed, so they'd just have a wide open pipe from you to your ISP.
ISPs would be free to strike deals with any content provider they wanted. I might choose to use an ISP affiliated with my favorite movie or search provider. Smart ISPs could increase the number of subscribers by getting the content providers to help subsidize the consumer's service costs. Prices could plummet!
You could buy a connection to a slightly more expensive ISP that didn't take subsidies from content providers and get a TRUE neutral connection.
The transport companies use the public rights-of-way, so they should have the public good in mind. We could shift universal fund money to support getting transport services to rural areas, and let the ISPs pick things up at the aggregation points.
I don't see *any* downside to separating the transport and service from a consumer standpoint.