I will try to answer as well as I am able.
Bandwidth basically refers to the amount of data that can pass through the media(read cables,wires,etc) it passes through.
The internet is really a big spiderweb of cabling no different in a lot of ways from your average home theater system. information passes from one device to another through the cables conecting them. different types of cables can carry different amounts of data similar to different size pipes being able to carry different volumes of water.
the tricky part really is that its all interconnected. How to explain it ....
Sort of like our highway system in some parts at certain times of the day like rush hour,traffic goes way up and you get congestion while at the same time other parts of the road are free of trafic or have very little traffic.However the internet is different in that the signals travel at or near light speed and the intersections are smart. The intersections on the internet are designed to take the path of least resistance if you will so if trafic is encountered in theory the interesction will automatically try to route you around it.
There are basically tiers to the internet, with different intersections along the way. We start at your computer which these days typically has a network card capable of transferring data at speeds of up to 1000 Mbps . This connects to an ethernet cable that typically can transfer data at speeds up to 10 Gbps.
Now you start to actually hit the internet where you get slowed way down.
The next thing you hit is the connection to your house which starts with the modem which come in many different flavors all supporting different speeds, but your modem is told by your ISP how fast it is allowed to go. The speed your modem is allowed to go by your ISP is determined by the capacity that your provider has built into their network. This varies by provider. Now the fastest you could possibly go at this point in your internet journey would be 159.252 Gbit/s (this would require your isp to basically run fiber optic cable directly from your house to the final tier that is called the backbone.
This of course is sort of confusing because when I say speed it isnt really speed its capacity. the actual speed that the data travels is relatively consistent regardless of your stated bandwith speed.
all data on the internet actually travels pretty close to the speed of light.
And that sort of brings us to the backbones. The backbones are basically the main communication lines of the world and are mostly at this point made up of bundles of the fiber optic cables that run at 159.252 capacity or bandwith per fiber. a bundle of these fiber optic lines are called a trunk. Delta Telecom, has recently developed a very efficient trunk line with possible speeds of to 1.6 terabits per second! thats just an insane amount of data.
So to try to finally answer your question how is bandwith created. Basically its created by adding higher capacity cabling closer and closer to your doorstep.
Currently there are several companies working on brining single fibers to your door.
Its all very confusing to try to wrap your head around and I am not sure I have helped much with my attempt at an explanation but as a mea culpa I will offer some links that might help you understand it all better if you really want to.
A good start is understanding the "backbones" as that is ultimately where bandwith caps are really reached. Even then its not so clear cut as if one backbone gets busy traffic will automatically take another route to help alleviate that traffic.
http://en.wikipedia.org/wiki/Internet_backboneFor info on all the different speeds or capacities different mediums provide
http://en.wikipedia.org/wiki/List_of_device_bandwidthsHope I helped some though I fear I likely only confused you more.
The bottom line though is No one company is responsible for the traffic on the internet they all rely on each other to route the traffic that comes through the portion they control to the correct destination.