Hosting and connectivity by itself is a really efficient cash incinerator - the only way out is to use it as a loss leader and then upsell the customers on other services, or sell them the connectivity as part of a greater package (you're no longer selling "connectivity" you're selling "we maintain and make sure your web service stays online and reachable").
I'm estimating you'll make a profit once you figure out a way to plug thousands of individual homes into your loss-making backbone, and execute on it.
However, the incumbent monopoly might lower prices and improve service quality to match yours. Which is almost mission accomplished, except for the losses you'll be making...
