How would this solve the problem though? Having competition at the last mile doesn't solve the problem of congestion in miles 2-100 where there is still one company.
The point is that if 'last-mile' services were open to competition, then there would (could) be many companies in what you call the 2-100 mile arena. Building an ISP infrastructure is merely difficult and expensive. On the other hand, thanks to municipal involvement, lobbying, time-based monopolies, etc. building last-mile everywhere is basically impossible.
Cable built an internet infrastructure across America on top of existing outdoor wiring plant (including access to poles) built up over many years.
Cable built up the outdoor wiring plant by offering a compelling new service (great reception for local TV and exclusive national programming) without significant competition (you could get a giant satellite dish, but compact dishes were not available until after cable was mostly entrenched).
It's not easy to overlay additional infrastructure wiring to compete with existing services (most areas already have good enough internet and video services from one or two providers; especially when a new entrant prompts upgrades from the incumbents). On the other hand, it's very easy to use wholesale access (if available) to provide middle mile competition. You would just need a couple routers (one at last mile provider building; one in a local carrier hotel/colo), a leased line between them, and a transit account.
In theory there wouldn't be "one company" anywhere other than the wires. If you have a choice between ISP A who is deliberately congesting Netflix, ISP B who receives Netflix over uncongested transit, ISP C who was uncongested extortionate peering with Netflix, or ISP D who has uncongested free peering with Netflix then you just choose whichever ISP provides the price and performance that you prefer. And if all the customers choose ISP D, maybe the other ISPs will change their policies to try to win customers.
Unfortunately there are other problems (like "your DSL being down is not our fault") with unbundling.
Ok, this makes more sense now. I had interpreted "the last mile" to be closer to the home than the level of the network that is hashing out peering deals with transits.
Unbundling requires sharing of last mile infrastructure to allow for competition in the middle mile. Last mile wiring has huge barriers to entry, middle mile wiring barriers are significantly lower.
The last mile is where competition becomes difficult due to physical buildout restrictions. There are quite a lot of "mile 2-100" companies; it's not like Cogent is the only game in town.