Once someone does this, legitimate telephone companies elsewhere will become interested as well, and may "play nice" so long as local laws allow it.
That is not correct. You can send legitimate calls with spoofed caller id between different countries. Many providers will let you do that. (as in, you can assign a caller id from country A to a call originating from country B to A)
There are literally treaties that govern phone traffic that would have to be updated. Most telcos are a monopoly or oligopoly and don't care about customer dissatisfaction. It's not like there's a substitute to the PSTN ready to go. Are you going to tell all of your contacts you are only reachable through Skype/Hangouts/Facetime? Cutting off a spammy foreign telco would also hurt revenue.
Frankly, the definition of telecom fraud should include corporations ripping off their customers not just petty criminals getting free calls.
For example if you go to another country with your mobile phone, your call will be international, but the caller id would not match the source.
I have a hunch that no telco wants to entirely block a foreign telco because they would lose money and because of the ensuing chaos.
Robocall friendly service providers intentionally mix robocalls with legitimate traffic to avoid terms of service enforcement. e.g. Robocalls are laundered by splitting across n carriers so spam (identified by bad ASR/ACD stats) stays below each carrier's threshold. https://news.ycombinator.com/item?id=12339739
That would root out domestic telcos who enable bad behavior. What happens when the origin telco is in another jurisdiction?