I didn't say anything about the capability of the existing infrastructure. What I meant was that they had an existing revenue stream based on that infrastructure to support their expansion, as well as buildings and network facilities.
Not much competition there. When the cable companies first deployed satellite TV consisted of an 8' dish in the back yard and rabbit ears pulled in a couple of local stations with serious ghosting.
And in both cases used the existing infrastructure developed and maintained under a government sponsored monopoly.
There was a lot of fibre laying activity a few years ago. All of those companies a defunct now. The problem isn't so much that as generating revenue from it. In the case of Verizon, they're migrating their existing telephone customer base onto the fibre as well as existing and new Internet customers. So the cost is offset by more than just the Internet revenue. And as they shift their income to the fibre circuits they also shift their costs, since they're physically pulling the copper wires whenever they connect fibre. Any new competing company creating their own infrastructure from scratch would have to take customers away from Verizon, which is much harder to do.
The problem is that it's extremely inefficient to have multiple infrastructure providers. That was shown in the early days of the power companies and the phone companies, and is why we have government sanctioned monopolies in the first place. Even when they tried to recreate competition in the power industry it involved the power itself, not the infrastructure that handled local distribution of that power.
An interesting analogy. If I may extend it a bit, what you're essentially saying is that if Verizon says,"We offer our own VOIP product, so we're not allowing Vonage to connect over our fibre circuits" then that's OK, because if Vonage wants to compete then they should build their own infrastructure to run over.
You see the problem? The people who own the infrastructure shouldn't be able to control who has access to it or what flows over it. The real mistake was affirming that priviledge for cable, as it set a precedent. The cable system, also built with the protection of a government sponsored monoply, was/is the only serious infrastructure competition.
There's nothing inherently wrong with Verizon's prices, other than they don't seem to be going in the direction the government says the deregulation should be moving them.
We're almost there, anyway, because of consolidation in the telephone industry. The difference is that we'll have the monopoly back, but not the control and regulation. :-/
A more appropriate analogy would be if the local farm coop and food distributor (Verizon) contracted to exclusively provide product to one restaurant (MSN). You're free to run your own competing restaurant, all you have to do is find and buy enough tillable land to create your own farms and establish your own food distribution network. There's certainly nothing to prevent you from doing it.