We have plenty of examples where land sharks and slum lords use rent controls as an excuse to avoid providing many things renters ought to take for granted. This is similar in principle. The the lack of financial incentive AT&T and rent-controlled landlords have they are encouraged to provide reliable or effective service.
I am just spitballing, but perhaps a system of vouchers usable on internet services, given to people on this SNAP program mentioned in the article could be experimented with. If the government were to pay for part of the voucher and the person wanting the service pays for the rest then ISPs would have normal incentive to service these customers and someone other other than AT&T could move into the market because it makes economic sense, or AT&T could step up their game because they want the money.