Sounds like an opportunity to open a WISP
Get some proper fibers somewhere in the city, convince some neigbours to help with the cost and start a community Wireless ISP, these days is relatively cheap to start one, the equipment needed is accessible for a small group of people to share the costs.
If it becomes popular and people start switching over, I bet ISPs will pay more attention!
In any case this seems to be the typical case of old infra that relies on old and poorly maintained cables and boxes that cause easily instability,note as well that if you are 5km away from central, good luck, it becomes a lottery.
On top of that I can easily see that the backbone link to BBRAS are as well over crowded. DSL lines have often contractual contention of 1:20 to 1:50. Put all together and here you go. Of course that there will be times in the day connection seems more stable because has less use, but as soon as people start using it more in particular periods in the days, latency and lost packets are expected.
I work at a large multinational ISP that has multiple last miles with these guys and other folks in different countries and business lines aren't any better, because even in those the SLAs are often best effort, at least this is the SLA we provide to our customers because we know we can't rely on DSL connections for stable service. It is often a hit and miss situation.
So again, my personal advice, get the community together and create a community WISP up and running and things will likely to be different, or at least people can have an option and like in this case that seems that internet is crutial, having 2 ISPs in actvice/passive/load balancing topology should make a difference.