ISPs lease the Last Mile at near cost (to pay for physical maintenance/improvements) and then are responsible for peerage agreements, subscriber management, network equipment, data budgets, plans, customer service, and other services (e.g. VoIP, TV over IP, etc).
Nobody benefits from ten+ different fiber runs from data center to home or business, it is inefficient. So you have to consolidate it and then lease it, that way granting an actual competitive landscape where consumers would get many choices for their ISP (and their ISP is responsible for mediating with the government about physical issues/faults).
Other countries have done this successfully. It also keeps government from being responsible for actually providing internet services, which could have civil rights problems (or politicians trying to decide winners/losers, etc).