Google has a pilot to offer TV and high-speed Internet service in Kansas City. Adding phone service would have cost them practically nothing, and presumably would have provided great value to its customers. But it gave up because even for a company as large as Google, the regulatory start-up burdens were too large. Many innovative new industries or new approaches to old industries have been started literally in someone's garage. But no one with a better idea for local telephone service is ever going to make progress against these kinds of regulatory barriers. Which is exactly what the large incumbents want, and why they secretly support these massive regulatory infrastructures (while publicly whining about them).