Think end game capitalism. Capital amalgamation.
In fact, any modern corporation will be buying as many smaller parts as they can, and regularly firing 10-20% of the people every year (cisco , etc).
So then, the problem isn't in the "centralized" web.
As such, users are denied true competitive freedom to say "I prefer the way that NewThing does stuff". They instead have to say "I prefer NewThing, but my social graph is held hostage by Facebook."
I won't say anything in particular about network effects because it's usually taken the wrong way, but there's no reason any of this lock-in has to exist on the digital web. We've chosen it by giving extremely strong legal protections to existing tech incumbents.
The logical conclusion when scale and centralisation are inevitable is the good old concept of a "public utility", see Bell Labs, electricity networks, and so forth. Doesn't sound as exciting because there's no "ether" or "crypto" in it but it has served most people quite well
But if you need to continue innovating, fragmented ecosystem > one entity.
Prime example being: what have 7B people invented, vs , what has UN (as their one face) invented.
For fundamental and 'deep' research the public sector is doing a pretty good job. I'm skeptical about selling every chat app and toy as "innovation".
I don't know how it will turn out but I have not heard much about your communist internet. I don't mean that in a bad way it is just a useful analogy for me to think about internet as railroads, as the post office, the dmv. Something we need so much that we pay taxes to make sure it is there regardless of whether or not it is viable in a business sense.
Then I realize that Bell Labs was not a public utility. It was an exceptional research project driven by exceptional people. Putting a power grid in the same category as Bell Labs is a fallacy. The nature of public institution stifles innovation. The ossified structure provides a safety which precludes the need for survival. Yes, we need the DMV but for fucks sake why do I have to wait in line for 6 hours once a year? How is the post office not profitable? Why are our trains so much slower than in other countries?
What is it that you are imagining as good when you see us provisioning our computing resources from a government agency?
Non-corporate software alternatives are getting there, but the next bottle-neck is operation. A simple static personal website still involves hosting "in the cloud" or setting up personal hardware, and operations. Mass adoption requires a 1-click 0-maintenance app.
It's at that point of incremental innovation for web-tech where I think little guys become competitive because that's where they can start smaller businesses running cheap but 'good enough' hardware and premade open-source software to provide similar services to the big players albeit at smaller margins to provide comparable but less comprehensive products for cheaper. These smaller businesses are where I imagine the decentralization manifesting. Especially if some of those businesses are things like "Join our regional hardware co-op and contribute your unused processing power to our service in exchange for a share of the profit". That would be huge on its own for de-centralization, if a profitable service could bring anybody and everybody a worthwhile amount of money for simply running their web-service software during downtime.