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I don't think competitors are avoiding telecom due to low margins. I guess you could say the high amount of start-up capital AND high regulatory hurdles AND the low margins (meaning your payback takes longer) cause it to be undesirable...then... yeah margins are (part of) the issue

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> high amount of start-up capital AND high regulatory hurdles AND the low margins

Not independent variables. The large wired broadband ISPs already enjoy economies of scale (access to capital, army of lawyers, etc.) and operate at slim margins. An independent ISP would need to reach the same size just to get the same near-zero margins.

That being said, there is a market for independent ISPs, but they tend to serve specialty customers where margins are much higher.

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