$1.1m/year payback (20 years)

$1,100,000/year, 40,000 households, so $27.50/year mean income per household to service the debt.

If only 50% of households (you said people) subscribe, then $55/year mean income per household to service the debt. If, again, as you state, no capital contribution from households below the poverty line, then, using your math (which, btw, double counts these), we're talking $110/year, or $9.16/sub/month to service the debt.

Here in Austin, there are three providers of 1gbps/1gbps FTTH internet, and all are priced just under $60/mo.

I think someone can probably figure out how to build a similar service in Boulder, paying the City of Boulder $10/mo per subscriber household, and still make fat rolls of cash.