[rayiner]

The government does not take a "hands off approach to the Internet." It might seem that way, because the federal government does that. But when you're talking about building physical things in specific places, that's largely the domain of cities and states, and accordingly most of the relevant regulation is at the state and local level.

State-and-local permitting is one huge morass. When I had fiber installed to my house, Comcast had to get permits to hang fiber on a utility poll. Then there were different permits for diverting traffic temporarily while hanging the fiber. Then there were other permits for trenching. The whole process took months. And there is a skilled worker there that has to shepard the process through the bureaucracy.

Other regulations prevent offering television service (a key revenue source) without commitments to build a certain footprint. That means you can't start an ISP with a "minimal viable product" and grow from there. You have to be willing to commit huge amounts of money up front before you see a cent of revenue.

It's very illustrative to look at the deals Google Fiber struck with municipalities, because that shows you where are the real pressure points. Two features appeared in almost every accepted proposal for a Fiber city: (1) one-shot, fast-track permitting; and (2) no build-out requirements.