The way it usually works is that the monopoly petitions the regulatory authority to build infrastructure, and then gets some guaranteed rate of return on the money they spend. There's lots of ways to do it.

Domestically, this is called a tariff. The local carriers file them with the local public utility commissions. They are all posted publicly and outline the service, capability, features and customer costs.

Someone here probably knows, but I am sure any service provider (LEC, CLEC, Municipality) has to file tariffs in order to get approval to deliver service.

Maybe that's an argument for fiber. Gigabit that never gets upgraded is still gigabit.