Yes! This is what happened in Japan. The telcos dragged their feet. Dial up Internet was pay per minute and adsl was $60-$90 a month. Yahoo Japan came in and offered adsl 1mbit speed for $20 a month unlimited. That is the moment Internet usage took off In Japan.
The telcos lowered their prices to match. Yahoo doubled the speed for the same price. That continued up to at least 8mbit speed for $20 month
I get my internet for under $10 a month for 14Mb (in UK). Paying that little I dont mind providing my own ipv6 tunnel and using google name servers. I used to pay for service instead, but cheap works too.
I might switch back to service if it cost less than $50 per month, but I dont really need support for adsl.
The telcos lowered their prices to match. Yahoo doubled the speed for the same price. That continued up to at least 8mbit speed for $20 month
Similar things need to happen here