Asklemmy

The way it works where I live:

Company A owns the physical fiber, they also own the point-of-presence where all the fibers end up (basically a room with lots of rack space). Company A does not sell Internet service.

Company X, Y and Z provide internet service to consumers. They rent the physical fiber from company A, they also rent rack space in the PoPs where their customers fibers terminate. Cost for electricity, air conditioning, in the PoP is shared by all companies that use that PoP, by ratio of number of customers. (e.g. if company X has 100 customers connected to one PoP and Y and Z each have 50, company X pays 50% of the utilities bill and Y and Z each 25%).

In case of company X/Y/Z, all the infrastructure is theirs with the exception of the physical fiber and the PoP room, that includes the fiber 'modem' (mediaconverter) or router on each side of the connection, switches, any backbone connectivity from the PoP onwards, all services, etc.

Some of these ISPs also resell their services to smaller ISPs, so company Q could simply be reselling a package from company X. Often they resell only a part of the service, e.g. they resell Internet from company X but add their own TV package.

They can of course also change this later on. My current ISP started by reselling services from one of the bigger ISPs, this basically gave them national coverage with little risk. Once they got established and had a decent number of customers they started rolling out their own network, city-by-city. They would install their own equipment into the PoPs in a city, change everyone over to their equipment (and distributed new media converters and routers) and they were no longer dependent on the big ISP. When they did this they cut the price of my internet connection by half while at the same time upgrading the speed from 200/200 to 1000/1000. Within a year or so they moved most customers to their own infrastructure.

And how do you get in such a situation? Very simple: company A wanted to install fiber and asked for a permit from the government to start digging up the streets and sidewalks. The government basically said: you can get a permit. but we don't want a all this nuisance with digging up the streets every time someone wants to offer internet service, so you as a requirement for the permit you have to offer an open network with identical pricing to everyone who wants to use it.