POTS is regulated yes.. So is electric, Gas, and other utilities.. Do you wonder why your prices go up?? Because it costs more to deliver those things then they are allowed to charge most of the time. Wonder why USF is here in the first place? Because it costs more to deliver those products then they can make as an actual business.
Add to it, that over time this nationwide network, would have to be re-built AGAIN.. and AGAIN, and AGAIN Etc. It's not workable and sustainable. The government can't regulate ISP's without giving them money to support the added cost of the lack of income to those companies due to price fixing. The ISP networks are the largest, and most complex networks in the USA. Crap guys, the Interstate system doesn't work right, or at least it's not maintained that well. And you want the government to run something like this?? You want them in charge of something like this??
Sorry, but there is so much overhead in government you would end up paying $100 per month for a 1 meg connection. AND it wouldn't work half the time. NOTHING, and I mean NOTHING in this life is free.