Yes, it was a joint project. Without those dollars, the project would not have gotten done. It's a JV. Everybody knew the terms going in, and changing them after the fact is like changing rules "after you are losing."
Everyone did know the terms going in. The premise of the 1996 deregulation was that the telcos would lose their legal monopolies, and competition would lead to higher investment and better service. The states torpedoed it, using universal service requirements to make competing with the incumbents unattractive in the very places (dense cities) where it would make the most sense.
Who is changing the terms after the fact? The deal was that these networks would be built with private money and privately owned. There is very little public money in there, particularly in the cable network. Since deregulation in 1996 the cable companies have built massive fiber-coax networks mostly at their own expense. Its changing the terms to come in after the fact and try to treat it as public infrastructure.