> If it was a free-market enterprise, you would have reasonable prices and services.
The free market only efficient under certain circumstances: when transaction costs are small and when there are few barriers to entry.
One well-known form of market failure is the "natural monopoly", and one form of that applies here: the geographic monopoly. The barriers to entry for a new ISP may be quite large, if significant investments in physical infrastructure which must be made before the ISP can operate. (One can also intuit that having multiple physical telephone networks connecting to houses in the same neighborhood would be wildly redundant.)
Most monopolies are not natural or at least not entirely so. They are enabled by government regulation. In many areas for example, even if you wanted to and had the funding you would be prohibited from starting up a new cable or telco because of local franchise regulations allowing only one provider of those services.
The free market only efficient under certain circumstances: when transaction costs are small and when there are few barriers to entry.
One well-known form of market failure is the "natural monopoly", and one form of that applies here: the geographic monopoly. The barriers to entry for a new ISP may be quite large, if significant investments in physical infrastructure which must be made before the ISP can operate. (One can also intuit that having multiple physical telephone networks connecting to houses in the same neighborhood would be wildly redundant.)