This is exactly right.

Most services that lend themselves to a natural monopoly (because most people only really need one power/water/phone/internet line to their house/business) should be implemented as a publicly run infrastructure with value added ISP's on the end.

The current vertical integration of internet providers impedes any new competition.

Arguing for integration is like saying that all roads should be owned by the "Road Company" that also happens to be the "Car Company" and you can only use an expensive car you bought from them on their road.