There's nothing wrong with municipal networks, or competition in general, but there should be a level playing field. Muni should not be subsidised by taxes, it should be paid for by users.
Increasing competition is a valid way to increase value while decreasing price, and markets with good compeditive options are the ones that fare best.
Unfortunately tax-supported ones, or ones which have other unfair advantages don't need to keep improving or maintaining good levels of service.
Plus,bear in mind there are competent and incompetent munis. Whatever scheme you adopt should work regardless. Having them compete on equal footing means that in some places Muni will win, in others cable might, and in others small local ISP might emerge.
In what bizarro world are you living where there is a competitive market for ISPs? 2 ISPs at best, via the municipality-granted local telecom and cable monopolies, is the norm for most of the US. Service does not improve because there is no competitive reason to improve it outside a tiny subset of markets. Services that require physical infrastructure over a wide area, such as power, water, and telecom service tend to result in natural monopolies as a rule.
The limited competition between consumer ISPs in the current landscape isn't providing value by any meaningful assessment. Internet service is functionally a commodity: so long as it's fast enough with consistent uptime it's functionally identical no matter who's providing it. As much as Comcast would like to believe otherwise, consumers largely aren't choosing them for their shitty Netflix knockoff or their free email inbox, they're choosing them because they're probably faster than AT&T DSL. In most markets they're "providing value" by deferring infrastructure upgrades and leveraging dark patterns to generate additional revenue (lol at the common scam-level prices for router rental) to increase profits for their shareholders. Commercial consumer ISPs do not have the best interests of residents in the service areas as a priority.
If nothing else, allowing municipalities to run fiber is in favor of far better competition than the status quo. I sincerely doubt that competence is a major concern with the simple practice of laying infrastructure in a trench (if it is, it doesn't bode well for your water and sewage systems, and that's probably a far more pressing concern), and that's the main barrier to entry for competition. /Running an ISP/, an entity that handles routing and uplink agreements with peers for its customers, is not profoundly heavy on infrastructure cost: you can start your own with leased access, a couple blokes in a shed, some routing and switching gear, and someone who can negotiate a transit contract or two. /Laying a shitton of last-mile fiber across public land/ is infrastructure intensive. The incumbent providers just happen to do both.
You could easily have a municipality provide only the fiber or have it provide both the physical infrastructure and run an ISP service atop it while leasing out line bandwidth to other ISPs. A single ISP can't really monopolize last-mile bandwidth--its usage is a function of the last mile users, not who offers service over it. Fundamentally though, choosing whether subsidize an entire ISP including infrastructure, subsidizing infrastructure alone and renting it, or subsidizing nothing should be the choice of citizens through their government. There's no god-given right that telecom companies have to that market, but they're often able to secure it by bribing a few state reps to listen to their stories about the SCARY PERILS OF MUNICIPAL INFRASTRUCTURE and THE GREAT THREAT TO THE TOTALLY REAL VIBRANT ISP COMPETIIVE LANDSCAPE and vote on something most constituents aren't aware of for a continued stream of campaign contributions.
I live in one of the most competitive areas of the US: there are three ISPs who will provide copper or fiber "gigabit" speeds to my house.
One doesn't offer IPv6. Two won't provide a static IP, and the other charges an extra $15/month for that. Two are highly assymetrical, and one of those won't even tell you before you subscribe what the upstream speed is. One of them wants to impose extra-cost fees above a datacap which my house has exceeded (by 10-30%) for 6 months of the last 12.
That's what competition with 3 commercial participants looks like. We need about 7 to get a functional market.
Cunningly the bizarro world I live in is not the US. So I can only tell you what works here - without using tax subsidies.
So let me be clear, because I think you somewhat misread my point. I am in favor of competition, be that Muni or collectives or whatever. My point is that the factors that make it hard for an isp to enter a market should be "made easier" - and I don't think you need tax subsidies to do that.
Could a Muni provide capital to say lay fibre, absolutely. Could they effectively create an income stream from leasing that fibre to ISPs, absolutely. Perhaps in some rural areas they may even provide a subsidy to consumers (regardless of isp) because of cost /density reasons.
So let me tell you about the bizarro world I do live in. Over here, while there are still regulations, it is possible with relatively little hassle to lay fibre. Literally under the road. For years we've seen trenches being dug next to roads.
The folk who lay the fibre are not the isp. The isps run on top of the fibre, and compete. I have about 20 to choose from - it's easy for a company to enter the space, and it's easy for large incumbents to play as well.
The one I chose went bust, I switched in 30 minutes. (I was offline for about 24 hours before customers collectively realised they were gone.) The fibre provider confirmed they had been turned off for outstanding bills, and at that point I switched to another isp.
Separating the physical wire from the service over that wire is the best play. I don't need a choice of wire, but as it happens in some neighborhoods there are 2 cables laid, by different providers (to the same neighbourhood).
Could munis lay fibre, or WiFi, or whatever infrastructure they like? Sure. And clearly they can use tax money to do that. Just don't grant any monopolies over that wire, and you foster competition. You don't need ongoing taxes to be an isp, you just maintain the infrastructure just like a road or water or whatever.
There's nothing wrong with municipal networks, or competition in general, but there should be a level playing field. Muni should not be subsidised by taxes, it should be paid for by users.
Increasing competition is a valid way to increase value while decreasing price, and markets with good compeditive options are the ones that fare best.
Unfortunately tax-supported ones, or ones which have other unfair advantages don't need to keep improving or maintaining good levels of service.
Plus,bear in mind there are competent and incompetent munis. Whatever scheme you adopt should work regardless. Having them compete on equal footing means that in some places Muni will win, in others cable might, and in others small local ISP might emerge.