> The municipalities own (most of) the networks and all the fiber cables, letting companies use them for a small(ish) fee. These companies later sell it to customers.
This is the model that should be used everywhere, if we were to actually consider it a utility.
By default it does nothing, but if you pay some company to terminate it to the internet then you get internet, using whatever speed they can provide. Let the ISPs compete based on the service they provide: internet speed, reliability, support, and other add-ons like (e-mail or malware filters or the best wifi-router-modem included) or even the lack of any add-ons.
Even if this isn't a "municipal service" strictly speaking, if contracted out to a telco of sorts, it should be done the same way, and we should not allow the same company that provides the physical lines to provide the actual service, since it's anti-competitive.