Well, from the point of view of a "money making machine" Telefonica might be a great company but they do it at the expense of their customers. For instance, with the new year public phones in Spain have increased their rates by 25%-33%.
Despite having several telecommunications companies in Spain, there is no real competition. In fact, about 95% of the voice traffic (phone calls) goes still through Telefónica (obviously having a 95% market share means they are still a monopoly).
As you know, whenever there is a monopoly a company can do whatever it pleases. That is, if you don't like what Telefonica is offering you, you just can decide not to use the phone. It's as simple as that.
As for a "reliable" provider.... well, it's sad but I think they are all quite bad. I'm using a dial up connection at 56 Kbps. I used to be with
http://www.eresmas.com and they convinced me to change to
http://www.iddeo.com. Both ISPs belong to
http://www.retevision.es but the latter is meant only for businesses. Amazingly, the connection speed is not faster than the previous one but furthermore it gets cut off much more frecuently.
I remember Jeremy saying lots of people complaining about Eresmas but I heard the same about Terra (one of the biggest providers in Spain).
As for the cable, I heard very good things about the reliability and the speed of connection but they limit the amount of data you can transfer per month. Thus, it's not a real flat rate connection.
In a previous post, someone from a European country was complaing of the bad quality offered by Telefonica in the ADSL lines compared to what he got at his country.
I know I seems to be very pesimistic but that's the way it is with the internet in Spain. Hopefully it should change in the near future.