Competition does help when it happens. The problem is Comcast and AT&T charge higher prices wherever there is no competition and they actively do whatever they can to prevent competition, they absolutely do not just wait around for other ISPs to compete. A few years ago Comcast’s active anti-competitive bullying of local ISPs in my city pushed me off the ISP I preferred. And there are too many areas in the U.S. where competing is prohibitive, like rural areas where build-out is more expensive, so once a single ISP is there nobody else bothers.
I think this is how utilities evolved in many places- local monopolies arose, so local governments either built their own system, took over service delivery or created laws on top of the service delivery.
What is making you think that monopolies can only occur with government action? The first utility to service a region is a de-facto monopoly. I also gave two examples already of ways monopolies have occurred without government intervention: anti-competitive behavior and barriers to entry. Monopolies without government intervention are common enough that there’s a term for it: Natural Monopoly https://www.investopedia.com/terms/n/natural_monopoly.asp
That article gives more examples of ways monopolies occur without government intervention, such as mergers and takeovers, and collusion and price fixing. All of these things have happened multiple times in the past, so history provides all the proof we need that lobbying or other government assistance is not required for monopolies to form.
That's my point. Instead of having a government regulate a monopoly, if government is going to intervene it should be to allow others to compete first.
Unfortunately competition still doesn’t always work, because crafty companies know how to fix prices without explicitly colluding - witness the insulin market, for example. I don’t particularly believe that my cell phone plan prices are the result of providers competing on price, it often seems more like a silent unspoken agreement among the providers to not lower the prices, which in addition to insulin has happened in lots of other markets.
If there is municipal internet, it should set a price that is sustainable but forces other ISPs to compete. Also competition doesn't only mean two of the same thing. More competition helps in general, even when the number of ISPs seems redundant.
