The sector may be anti-competitive but it certainly hasn't stifled innovation, at least not across the board. The province I live in is almost the size of Texas with about 1/24 of Texas' population. Yet we'll have 100% broadband penetration by 2011.
When Bell was a monopoly, they had a phone in every household which you leased from Bell. Monopolies seem to penetrate the market very well, regardless of their level of innovation so I don't think market penetration should be by any means a measure of innovation.