The first year it seems great. The real issue is 10 years down the road when people are using 5G and giving up their internet connections, who is left paying for the infrastructure and the union jobs?
I don't think you understand how limited 5G is. The range is basically the same has your home WiFi router. Without a fiber infrastructure to back it, 5G is nothing. If the city is no longer able to sell direct internet, then it will just sell/rent the infrastructure to whatever to 5G provider there is.
I brought up the 5G as an example of something that could change in the future. The problem is no one knows what is going to happen in 10-20 years. Its easy to spend public resources and have a great cheap service, maintaining this for decades is a different problem and it'll be interesting to see how it pans out.
The expensive part of fiber to the home is laying the fiber. It's extremely unlikely that we are going to discover a transport medium better than light pulses over fiber anytime soon.
What about wireless? Well any wireless technology you can imagine needs wireline backhaul at some point. So the bigger your fiber network, the better your wireless technology will work!
Someone has to pay to clean up the unused or derelict infrastructure in either scenario. The private company can declare bankruptcy and skip town much easier than the town government can. A town can also choose to ignore infrastructure maintenance the same way that private entities do. They can also choose to change the funding or price model or level of service, same as the private entity.
If 5G lives up to the promises, it needs to have a microcell on nearly every light pole. You need at least a bunch of those to have a wired backhaul connection; that can certainly be municipal fiber, at least for the wireless carriers that aren't related to a local telecom.
