I'm just wondering how the physical roles would be split and literally where.
The ISP should be responsible for your service to the rest of the internet, since there's many ways you can manage that side of the network. If an ISP wants to offer a non-net-neutral plan, they can, but there should be little barrier preventing another ISP from entering and competing with a net-neutral plan.
This is very similar to the way the UK currently does it[1]. It always baffles me that the FCC thinks that it's in uncharted waters. This sort of thing has been hashed out and is working well in other infrastructures.
[1]: http://arstechnica.com/tech-policy/2010/03/uk-regulators-off...
The problem is that internet wire technology moves so much faster than power wire tech. Even in just the last 20 years we've gone from copper phone lines to cable to fiber. As long as the last-mile tech continues to improve it will be hard to work this scenario because what incentive does the "wires" company have to re-do all their infrastructure from fiber to the next big thing?
Is there any reason to suspect that today's fiber (albeit possibly "lit" by tomorrow's fiber modems) will be insufficient twenty years from now? Are we approaching some sort of theoretical limit to the number of beams of light that one glass fiber can transmit?
No. And the premise that we've gone from twisted pair to coax to fiber in a period of 20 years is similarly silly. Telephone wire is essentially telegraph wire and has been in use since before the American civil war. Coax is from the same century and had been in use for cable TV before the internet was even a thing. Even modern fiber optic cable is older than, say, TCP/IP. The only reason fiber wasn't used to begin with is that the other cable was already in the ground before the internet existed.