BTW: in the EU there is movement towards mandating ISPs allow BYOD, including fibre ONTs.
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The benefit with an ONT (or even DOCSIS dumb modem) managed by the ISP is that they can do fleet upgrades much quicker as they don't have to keep all old protocols running. For instance the GPON -> XGSPON upgrade that some ISPs are running right now (or DOCSIS 3 upgrade) really only works well if you can turn off the old protocol which requires swapping out all ONTs/DOCSIS modems.
If customers bring their own stuff then you're stuck with these things for much longer.
But in cases where the ONT just looks like a media converter and you have a separate router I really can’t see any reason for the customer to provide their own ONT. Especially given PON is a shared medium so a misbehaving ONT can affect other customers.
That's how it works in New Zealand, but we take it a step further. The GPON/XGS-PON fibre network is run by a separate company[0] from the ISPs (and the company running the fibre network is prohibited from providing internet services[1]). So the ONT just functions as a media converter[2], and all our ISPs deliver internet over the same fibre network. This decoupling between the fibre network provider and ISP means you can change ISPs without any swapping of ONTs or repatching of fibre[3][4] (in fact, the process can be entirely automated, switching to some ISPs can take effect within an hour or two of placing the order). That and most ISPs allow bringing your own router (as there's no monopoly in the ISP space).
[0]: The NZ Government contracted four companies to build, own, and run fibre networks (three being new companies co-owned by local lines companies and the government to serving their local area, with the rest of the country being served by Chorus, the company that owns the country's copper network). These fibre companies are heavily regulated (including how much they can charge ISPs).
[1]: In fact, this requirement resulted in Telecom (the company that owned our copper network and who was one of the companies that provided phone and internet service to consumers) being split up, with Chorus being spun off, owning the copper network and owning the fibre network for the majority of the country.
[2]: Chorus did start deploying ONTs with a built-in router/AP a while back. They did offer this to ISPs to use, but uptake was very low, so it's since been discontinued.
[3]: I don't know how it works over in European countries where ISPs run their own fibre networks when switching ISPs, I assume they have to either install their own fibre line into the premises or the existing fibre is repatched to their network?
[4]: The fibre companies are required to offer use of their fibre network directly to ISPs, with the ISPs PON network running in parallel to the fibre company's, with the ISP providing their own fibre splitters and ONTs (which would be run on a second fibre line that each premises already has) and running their own OLTs. I believe this requirement still exists, but no-one ever took them up on it.
[0] https://www.swisscom.ch/dam/swisscom/en/ws/documents/E_BBCS-...
[1] https://www.swisscom.ch/content/dam/swisscom/de/ws/documents...
[2] https://en.comparis.ch/telecom/zuhause/angebote/internet-abo
But I have read that some other communities that have tried the same model have had trouble attracting ISPs.
My understanding is that the margins on fibre connections for ISPs are quite slim. The three big telcos do both broadband and cellular, and they definitely try and push customers with lighter needs over to wireless internet delivered over 4G or 5G (which has more margins for them). There has been a bit of consolidation among the major players (one of the big telcos (2Degrees, who do both broadband and cellular) merged with one of the big broadband-only telcos (Vocus) a couple of years ago). But there's plenty of smaller ISPs. And a couple of the electricity retailers have gotten in on providing internet as well. And it's not uncommon for local WISPs to offer fibre as well.
Differentiation between ISPs is definitely mainly on cost, quality of support, and bundled services. They all have their own networks (the fibre companies only provide L2 connectivity from the customers to the ISPs), and there can be some differences there. For example, another of the big broadband+cellular telcos (Spark, who was the ISP side of Telecom before they were split up) is the only major ISP that doesn't offer IPv6 and doesn't peer at local peering exchanges.
Some ISPs have cheaper plans with data caps, but many ISPs don't even offer data-capped plans, and everyone offers uncapped plans. Similarly, most ISPs let you use your own router. And about the only variation in how you'd need to configure your router is PPPoE vs IPoE/DHCP and VLAN 10 vs untagged. So you can usually switch ISPs and all you need to do is maybe change your router config.
As a side note, of particular interest to the audience here is the existence of a new-ish residential ISP (Quic) that offers things like static IP for a one-off cost, /28 IPv4 subnets, self-service rDNS management, and self-service access to the ONT status, connection logs, etc. One of the advantages of having competition in the ISP space.
I suppose there are a couple of downsides compared to being able to use your own ONT, in that residential customers can't get SPF ONTs, and Chorus's XGS-PON ONT is quite large and not wall-mountable, which has caused a few people to hold out on XGS-PON offerings (they're working to offer a smaller one, but it got set back a bit, and they also won't start offering it until they run out of the old XGS-PON ONTs). But that's all quite minor (a residential customer wanting an SPF ONT is very niche indeed, as is a genuine need for a residential XGS-PON connection).