They are a special case.
Firstly, SLAs should take care of physical quality problems. I say *should*. Here in Australia, Telstra provides basic DSLAM services and rents them (under the ACCC's orders) to ISPs, including it's own, BigPond. However, they won't sign any SLAs on service, so provisioning happens in Telstra's time. The ISPs make sure you know this is why it takes 2 weeks or more. I'm sure the ISPs would love to have 2 day turnarounds, but unless Telstra will agree to an SLA, they can't get them.
Secondly, IMO monopolised cabling infrastucture should be part or wholly owned by a government at the appropriate level (or perhaps a community collective if it's a small enough area), but run as a business. This is especially important where there is a single incumbent and there is no feasible way of generating competition. Such a corporation would not sell services on the copper except perhaps a standard, low-level protocol that all other services build on.
Incidentally, that is the general type of solution communications professionals have been advocating ever since the Australian government started privatising our incumbent telco, Telstra. It would keep the physical lines in government hands, where they can make sure everyone in the country has or can get a working circuit, but provides for competition for everything else on top of that, including POTS.
Wade.
"Insert crowbar. Apply force."