> And to your point, if you the muni is responsible for little more than the fiber line itself, it really is a simple matter to maintain them, i.e. completely predictable cost structure.
That's what I was talking about. However, if the muni is responsible for the entire network, ie. routing, dc's, backup generators, upstream bandwidth, CPE devices (home termination routers/wifi access points), etc... those are all costs that might increase and/or be unpredictable, and at the very least will require some sort of re-investment from time-to-time to keep the network "current" in regards to technology used.
For example, how many years will the muni get out of the core routers they buy today? It will depend on the quality/upgradability of them when purchased, network demand/load, number of subscribers, future requirements for traffic shaping, etc. Same goes with their switches, load balancers, and other network equipment.
The actual lines themselves are unlikely to ever "break" unless someone puts a backhoe through them on a construction site, etc. So they are a relatively fixed-cost. Every home in a city could be "fiber-ready", and once you move in you get a choice of local ISP to use. There would be many local ISP's to choose from, and due to competition among themselves, service quality would increase.
Leaving everything to the muni also opens a door for vendors to oversell high margin equipment to the muni, effectively making the local tax-payer and/or subscriber foot the bill with little choice. Allowing small/local ISP's to compete for the "last mile" can reduce that cost burden based on what that particular business chooses to run equipment-wise (and to be competitive, they will strive to do the most with what they have instead of opting for the most expensive offering from the vendor, etc).