Varies by municipality, but pretty much everywhere the "last mile" is a local monopoly, granted by the town, county, or city with the rights to do so. And so long as that's the case there's no real competition and thus no way for Internet users to route around these abusive practices of their ISPs.

What's funny is that now the incumbents have the monopoly (paid for using taxpayer money) they're pushing to prevent new competitors like Google fiber from working with the municipalities at all: http://consumerist.com/2014/01/30/kansas-legislature-wants-t...

Sort of, my understanding is that they mostly received tax breaks with possibly some subsidies.

Either way, they received an incentive to do so.

Verizon got something like $10billion in cash to build FiOS out in New York...and never did

I've heard this before. How can they "get away" not building it, legally speaking? Makes no sense to me in this context

Because of how the contract was worded, they didn't have to actually provide the service just "attempt" to or something like that

Because the bill that awarded them the funding was written in a way where there were no repercussions for not doing so.