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Regarding the city divided into service areas, if you are in the US many cities provided franchise rights to cable providers that gave them exclusive monopoly rights to provide services in exchange for the cable provider spending all the money to install the lines and infrastructure. Most of those franchise deals were done in the 1970s or early 1980s, essentially mimicking the agreements that were in place for AT&T (or RBOCs).

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Franchise agreements have been non-exclusive by US federal law since a long time.

Lack of competition is more about the cost to establish service in an area, and the ROI on service in an area with competition. It costs a lot to pull wires past a lot of potential customers and if many of them won't sign up because they already have a good enough option, it doesn't make much sense to do it.

Cable and Telco compete because when cable was built, it was a completely different service, but they've both evolved to fill the same role.

This is why mandatory line sharing is important for competition, and it's in the telecom act of 1996. But the FCC first said it only applied to telecoms, and then said it doesn't apply in remote terminals because of lack of space, and then courts said it doesn't apply at all because telecom and not cable isn't fair.

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