If by that you mean that it is not the only thing that matters, then yes. But if the backbone is bottlenecked then of course quality will suffer.
> 2: Government tend to grant permission and funding to the first ISP that want to dig into government land to plant cables, but then deny completion afterwards and allow natural monopolies of those that were first.
Is that actually the case? Getting a dedicated line between any two buildings tends to be no problem, so why would doing the same on a larger scale be a problem all of a sudden?
> 3: Low barrier to entry could allow for many ISP.
That's only really possible if the last mile can be leased from either the municipal or some other company (sort of like the government maintained track system). Otherwise the barrier is exactly this last mile, which is the most expensive part of the whole thing (which is also why a lot of small rural ISPs use wireless as last mile access instead of wired connections).
1: Rail maintenance dictate quality, but is shared between all competitors.
2: Rail is located on ground owned by the government. There is no practical or legal option to operate a private rail network.
3: Lack of distinguishable features to compete, high barrier to entry, and a limited number of companies create an environment thats prime for oligopolies. High price, low service.
In contrast to Internet service providers which:
1: Quality of service is generally not dictated by the back bone network.
2: Government tend to grant permission and funding to the first ISP that want to dig into government land to plant cables, but then deny completion afterwards and allow natural monopolies of those that were first.
3: Low barrier to entry could allow for many ISP.