As a libertarian I think that government should not do commercial projects like this fiber optical network. But then I raise a question - why private companies do not make such fiber networks? And it is obvious that it is not about cost. Google has plenty of money to invest (is YouTube already profitable or still burning 1 million USD a day?), but still they struggle with their fiber network.

I have a live example I live in Lithuania. Until 1998 Lithuania had one monopolist telecommunication company owned by government. But in 1998 our government sold this monopole company (about 95% of shares) to Swedish company Telia, but at the same time they passed the laws to liberalize telecommunication market. Theoretically Telecom was obligated to allow usage part of their communication infrastructure to other competitors, but as monopoly they set such high prices, that for other companies it was cheaper to build their own networks. And laws allowed to build network for everyone. And that's where libertarian dream came true - even monopoly could not limit expansion of private networks when there laws allowed that. Soon there appeared many amateur networks that used simple UTP cables or wi-fi to connect to each other, some of them joined forces together and become companies who sold internet connection to neighborhood homes. That's how suddenly there appeared lots of small ISP's. Soon they understood that they cannot rely on UTP cables or wi-fi, so they started building fiber cable networks in largest cities. And keep in mind, that in 1998 - 2000 when those companies have appeared, the Lithuania was quite poor country who has just escaped USSR. It had a GDP only of 11 billion USD; average salary was about 150 USD/month, so you can imagine that average customer could not pay for internet a lot. That small fiber optical ISPs didn't had big investors behind their back, tons of money to invest, but still they managed to buy equipment on word prices and expand their networks. And now here in Lithuania we have plenty of ISP's who offers 100 - 300 mbps fiber connection to almost every home that needs it.

So I think real problem in USA is not about the money, it's about the laws that limit competition. And building government network would not solve this issue - building municipal networks is just the fight against the consequences, not the causes.

P.S. Lithuanian capital Vilnius has population of 650 000, so it is quite similar to the case described in this article.