> Split layer 1 from layer 3. I want a fiber pair from my house to the central office, where I can then patch to any provider who decided to pay the cost-recovery based co-location connection fee. Basically I should be able to tell this wireline provider to plug my patch cord into service provider X and they do it within a reasonable timeframe. I pay this provider for the wire itself.
> I then get provider #2 and subscribe to their IP services. Hopefully there would be enough competition (e.g. dozens) here to not have to regulate further.
This is exactly how DSL worked, with ILECs being forced to sell wire access to CLECs. Many places were still not served by a CLEC.
The answer for keeping things competitive and modern is probably both. The physical infrastructure companies should provide dark fiber, which will be demanded if there is high enough population density to independently invest in the gear to light or even for individual businesses with special requirements. They should also provide aggregation through their own edge switches, so that less-dense places can experience provider-competition at regional meet-me centers.
> I then get provider #2 and subscribe to their IP services. Hopefully there would be enough competition (e.g. dozens) here to not have to regulate further.
This is exactly how DSL worked, with ILECs being forced to sell wire access to CLECs. Many places were still not served by a CLEC.
The answer for keeping things competitive and modern is probably both. The physical infrastructure companies should provide dark fiber, which will be demanded if there is high enough population density to independently invest in the gear to light or even for individual businesses with special requirements. They should also provide aggregation through their own edge switches, so that less-dense places can experience provider-competition at regional meet-me centers.