Do we allow competition in Debian,
Competition for package maintenance is a complete waste of time, both for maintainers and their sponsors.
or does whoever filed ITP first, get a monopoly over packaging?
You can call it monopoly if you like. It's the same kind of power that a maintainer has over his packages that are already in the archive. Would you repackage from scratch, say, trafficserver[0], and then look for a sponsor claiming that your package is somehow better? I guess not...
Visibility of your progress is questionable since in the ITP had no information about location of your effort or the progress you've made.
Assuming that there's no progress on the ITP just because there's on evidence on the contrary is simply wrong. You didn't ask Arno what's status of his packaging before announcing that your package is ready.
[0] http://packages.qa.debian.org/t/trafficserver.html -- Jakub Wilk