This was a common way to do things before the telcos in the USA were deregulated in the 2000s and 2010s. At the time it was both internet and telephone but due to the timing of de regulation, it never really took off with real high speed internet, only dsl and dialup.

I used to work at a place that did both on top of the various telcos. We offered ‘premium service’ with 24 hour customer support and a low customer to modem and bandwidth ratio.

Most of our competitors beat us in price but would only offer customers support 9-5 and you may get a busy signal/ lower bandwidth in the back haul during peak hours.

There was a single company that owned the wires and poles, because it’s expensive and complex to build physical infrastructure and hard to compete, but they were bared from selling actual services or undercutting providers because of their position. (Which depended on jurisdiction).

It solved the problem we have now of everyone complaining about their ISP but only having one option in their area.

We have that problem now specifically because we deregulated common carriers for internet right as it took over the role of telephone service.

the in world practice seems to have this worked out. I am working for such provider right now and it is neither cash starved not suffocating under undue bureaucracy

And private companies don't even have to be vulnerable, they can just do nasty things nilly willy, because it might be profitable and they might get away with it. Yeah, there could be ones that don't suck, and then customers could pick those, but when there aren't, when they all collude to be equally shitty and raise prices whenever they can -- which they do -- people have no recourse. They do have recourse when it comes to the government.

And for some things it's just too much duplicated effort and wasted resources, T-shirts are one thing, because we don't really need those, but train lines and utilities etc. are another. I can't tell you where the "boundary" is, but if every electric company had to lay their own cables, there would only be one or two.

And in the opinion of many including mine, for example the Deutsche Bundesbahn got worse when it got privatized. They kinda exploited the fact that after reunification, there were two state railroad systems obviously, and instead of merging them into one state railroad system, it was privatized, but because it made more money for some, but not because it benefits the public, the customers. Of course the reasoning was the usual neoliberal spiel, "saving money" and "smaller government" but then that money just ends up not really making things better to the degree privatization made them worse.

Obviously not everything should be state run, far from it. But privatizing everything is a cure actually even worse than the disease, since state-run sinks and swims with how much say the people have, whereas a 100% privatized world just sinks into the abyss.