The difficulty is that most of this competitive dynamic is already provided by IP itself (remember when you got your email address from your ISP?), and what remains is basically the physical layer technology which is exactly where the worries lie about stagnation.
There is a small angle where several ISPs can compete around customer service, data caps, equipment rental, business support, price margin, etc. While then forming larger units that put pressure on the physical provider to not stagnate the underlying infrastructure.
On the other hand I've got municipal fiber, and it just works. Great friendly local support (at least from what I understand, I don't really call them), no data caps, the price has stayed fixed for it's whole existence. I don't see any reason to want another layer on top of that, as it would only make all of those things worse.
The incumbent coax provider ("cable compay") still exists. If the municipal fiber provider stagnates on technology, then they could theoretically step up, right?. But given they had been coasting on a monopoly for decades (the other option being DSL), and that their service is still slower than the municipal gigabit (now deployed for a decade), I think that is giving them too much credit! In fact I've seen more talk about next-gen connection speeds from the municipal fiber provider.
For all the marketing about "free market competition", large corpos can be less innovative and responsive than small governments. So for the foreseeable future, I see no reason to not just voice my support for municipal fiber everywhere.
But what about large governments? Japan has amazing internet service, and NTT is mostly private (with the government retaining only 1/3 ownership).
I would trust my county to deliver my fiber internet. All my government services work great. I literally marvel every time I visit our municipal dump, which is cleaner and mode efficient than my home country of Bangladesh. But I wouldn’t trust most of the other counties I’ve lived in before to do it (Baltimore, Wilmington DE, Chicago, etc.).
There's more than just the physical pipe from the distribution point to your house
ISPs could compete on lack of congestion on their backbone, privacy, latency, price, "value add" features (like email, website hosting, etc), and speed depending on the model of the wholesale network