This is what we have in Israel, and it works nicely IMO. We have a duopoly of "infrastructure" providers, where the wires go from homes to the local Internet eX

This is what we have in Israel, and it works nicely IMO. We have a duopoly of "infrastructure" providers, where the wires go from homes to the local Internet eXchange Point, and from there it's a free market of ISPs. We don't pay a lot (and the bulk of what we pay is to the infrastructure providers), and user experience is mostly very good.