This statement doesn't make any sense logically. If a phone system is better, more reliable, and more robust, then customers ought to be willing to pay more for it. The fact that they aren't willing to pay more tells me that they don't agree that it is better. It's probably comparable to Ford putting an options package from a Lincoln Navigator in a Ford Focus. They aren't going to sell that tricked-out Focus for any more than their base model, because the typical buyer of a Focus isn't looking to buy all that anyway.
Go back and look at the history of the U.S. railroad industry again. It wasn't originally developed as a "national rail system" at all. That came later, and was really one of the untold reasons behind the Civil War (the Federal government had to usurp state regulatory authority in order for a railroad system to be constructed across the entire continent; it's no coincidence that Abraham Lincoln started his career as a railroad lawyer). And even then it was never really a "public utility" as we would understand that term today. It was privately owned and operated, for the most part.
It's also hardly the case that "the system sucks." The (privately owned) freight railroad system in the U.S. is the envy of the world, and has seen tremendous improvements in profitability and efficiency over the last 30-40 years. This was driven largely by a deregulation process that unfolded around the same time AT&T was being broken up.
It's the passenger rail system -- run mostly by government agencies under a "public utility" model similar to what you're recommending for telecommunications -- that truly DOES suck.
But if the Bell doesn’t put it in place they CAN’T pay for it. And it’s not like the phone company can really do partial upgrades. So many of the upgrades are entirely in the building, and the customer can’t really choose whether or not to pay for it. It’s not comparable at ALL to cars, it’s most comparable to ROADS. The phone system is a BACKBONE, it’s upgraded or it’s not.
Railroads were privately owned, but publicly funded. Especially when they decided to make the transcontinental.
Our railroad system system. It’s not the envy of ANYBODY. It’s hands down the worst rail system in the civilized world. It might be the envy of Viet Nam, but everybody in Europe LAUGHS at our rail system, it’s a sad pathetic joke that’s major technical evolutions behind.
Amtrak doesn’t resemble what I’m recommending for telecommunication. Amtrak resembles what WE HAVE RIGHT NOW in telecommunication: a complete dysfunctional system forced upon us by a stupid government. The government built Amtrak and broke AT&T, they should have left both alone. AT&T was working, we had the best phone system on the planet, now it’s a pathetic joke. The de-evolution of our phone system is the proof positive that the breakup was bad.