The government doesn't have to create these monopolies. Utility (i.e. telecom) companies naturally tend towards a monopoly because of the absurdly high cost of rolling out duplicate infrastructure. Usually the first mover is able to fend off any real competition by lowering its prices below that which its competitors can afford, given that they still have an infrastructure to build.
And even if the first mover does not end up alone on the market, after some time the market tends to undergo significant consolidation (once most of the organic growth has been achieved). And you end up with a natural monopoly anyway.
You can even see that in very recent history: the US government broke up Bell in 7 in 1984, it's already merged back into 2 companies (AT&T and Verizon are composed of 3 baby bells each, the 7th is part of Qwest/CenturyLink)
Correct me if I'm wrong, but the baby bell split was a vertical split. In other words, it left 7 regional monopolies, rather than 7 companies covering the same regions, competing for the same customers.
That means that customers were still stuck with one choice for phone and internet access, but the choice merely varied based on where you went. The Baby Bells weren't competing with each other.
