Fiber to the neighborhood in rural areas works
Where I live in rural Arizona, USA, the encumbent Telco teamed up with the cable provider to jointly run fibre to the neighborhood. The reason for this was manifold: the existing copper infrastructure was deteriorating and needed replacement, the cost for fibre was equal or less than the cost for a copper replacement, neither the cable operator or the telco could afford the infratructure upgrade on their own, an increacing residency density required infrastructure upgrades in existing (ie, paid-for infrastructure) neighborhoods - AND - most importantly, the cost of doing the entire city (with, at the time, 25,000 residents) was something that could be amatorized with some premium rates and a lot of only slightly more expensive base rates.
The fibre end loop was installed back in 2001, and we immediately got ADSL at 3X1.5Mb out of the deal for US$40/mo. This also allowed us to get full support for 5 analog voice lines (this was before VoIP): prior to this the lack of copper pairs to the EO prevented us from getting all of our required land lines installed.
So the economics for performing this type of upgrade were there 6 years ago, even in a relatively "orphaned" technology area.
Now, the bad news. With the ubiquity of cheap cellco plans and expanded coverage, the revenue to underwirte this type of investment has seriously declined. The same companies could not do this today, as there is no possible way for them to recover the investment through normal revenue channels. Raise the phone bill, people drop their land-line. New development, where levies and surcharges can be built into the developer's costs, may get this type of infrastructure, but only if it is truly included as part of the pre-build infrastructure.
So the dirty little secret of deregulation is that customers DO get more choice - but only for the lowest common denominator service. Anything that requires significant investment against future revenue will be ignored, as you can certainly bet that the competition will use a later, cheaper product to compete with you, and, if you can't increace revenue or justify the cost against maintenance, there is no incentive to be the first to drop the cash, knowing that there is a percentage that will never be recoverable.
If BT can seriously consider funding this type of installation, especially in existing infrastructure areas, my hat is off to them. Goes to show that Europeans in general are more willing to pay for this than us Colonists.