Not so far off, providing infrastructure locally then leaves a lot of the major transit to backbone carriers to make the interconnects. Those providers are largely transparent to the end users. Now nationalizing carriers like that would be a hefty lift, but if we can take the local service out of the ISPs hands it would let the municipal hosts negotiate those peering arrangements in bulk. How many towns are well equipped to handle that might be another matter though.

Not contracted monopolies or direct city run, but like 'IAAS' seems to work. Much like how you see some small cell companies providing unique offers riding on one of the big carriers networks. Often those small carriers provide better deals, particularly when the carriers they ride on are forced to sell wholesale access at reasonable rates.

The city selling wholesale access funds the infrastructure maintenance and the carriers are better able to compete with each other since all they really have to do is set up a router and pay the city's access rate fees.