The problem of asymmetry of resources exists in all domains that have high sunk costs. To reduce monopolies, using your logic ("you need countervailing size") the government would have to get involved in all of the other industries like shipping, oil refining, TV networks, etc.
Instead, why not change the law (if needed) to prevent monopolies from happening?
Shipping and oil refining are different. If you apply capital to over come the cost barrier of entering those businesses, you can still access customers and potentially put all that capital to work generating profits.
With last-mile internet, if you lay in a redundant competitive network in a neighborhood - the capital efficiency of both networks goes down, with no mechanism to make that capital work more. You're limited to the houses in the neighborhood. So in that case you have high cost barriers, and natural monopoly conditions limiting how well that capital can be used to generate return...
If all the gas stations in an area are owned by Exxon & priced too high, the customer drives their car elsewhere. There is a very, very high capital barrier to entering the market, but customers still hold choice.
You can probably observe some region-locking effects short of monopoly by relate the cost of gas in come areas with ability to choose alternatives. e.g. Driving in the middle of nowhere, there are few gas stations and the cost of gas is high. Redundant stations aren't built in competition to one another along those stretches because the volume of traffic isn't high enough along the 'network' of the road, but within the range of the typical car, some will drive on and others will be forced the stop. So even that isn't as airtight a natural monopoly as last-mile internet.
The government already does, for regional monopolies (power, water, sewer, transportation, etc.)
The problem isn't that the government should prop-up start ups in this specific industry to prevent a monopoly, but that the government should embrace communications as a regional monopoly - i.e. own the utility infrastructure and reduce costs for the entire economy.
Obviously they can't nationalize the current companies, but they can start building public infrastructure.
Because some markets will tend towards consolidation ,especially things involving networks, because the economies of scale are so important to costs. So , left to their own devices, the unregulated market would always tend to a monopoly.
Friendly reminder to people of HN. Please don't downvote to disagree. Is your objective to discourage dissenting opinion? Seriously? That's not healthy for a community.
Isn't there Sherman act already? Why can't it be applied to ISPs? I.e. there are existing laws which can put an end to anticompetitive behavior of ISPs, but no one applies them. So why would adding more laws improve anything?
Well anti-trust law are mostly applied on case by case basis. I believe the un-official term for judging is "workable competition". I don't know whether the ISP market passes that definition.
There are also various prohibitions about collusion. And that's a major problem with ISPs, i.e. even if there are several in the area they agree not to compete and hold prices high for example. I never saw anyone applying these laws to ISPs so far. Not sure why that is, may be government is too much in their pocket to actually apply existing law.
Instead, why not change the law (if needed) to prevent monopolies from happening?