Earlier quoted context omitted.
I'm assuming that the various ISPs have agreements between each other to not expand onto each others "turf"? Otherwise how does competition not naturally spread? If they do, how do they get away with that? More puzzling to me is how ISPs squash towns plans to implement their own networks. I'm very ignorant on how things got so bad over in the US, I've always had a multitude of ISPs over here in England.
In the UK our situation is much better, although BT owns most of the physical cable "Local loop unbundling" forces them to share their lines with competitors. It seems in the US the only people you can buy from own the physical infrastructure. Once one company has already built their network in an area they form a natural monopoly - it's not economical for competitors to come in and rebuild the network when they know…
[edit] The above was from memory, and it is actually a lot more complicated than that. The decoupling of broadband from voice was challenged in court and the FCC had to change their rules somewhat. I'm not sure what current requirements are. See also:
http://openjurist.org/359/f3d/554/united-states-telecom-asso...
A quick key for reading that: ILEC == people who own the copper CLEC == people who want to use the copper.