What is stopping the Telcos and cable companies from withdrawing their wholesale services?

In theory, nothing. In practice, it depends on demand. If the demand for wholesale services is sufficiently attractive, market forces will compel the telcos and cable companies to compete to meet that demand.

If they all cease providing wholesale services where demand clearly exists, then it can be argued that collusion exists and hence market failure. Regulation will then be inevitable, but that point, according to the FTC, has not yet been reached.

We currently have the classic carrot and stick situation. The stick of regulation has been effectively waved, all we need now is the carrot of a large and growing market segment to be dangled to complete the picture.