We have some towns on the eastern shore of MD that did municipal cable, back when that was the state of the art. Those systems are lagging far behind Comcast now because nobody wants to raise rates to generate cash for upgrades.
Municipal fiber is a solution to a problem created by the municipalities. The municipalities suppress competition by using their authority over TV regulation to impose build-out requirements. You can’t enter as a competitor without building out to a whole city. No MVPs or niche products.
There's also more free-market ways to accomplish the same thing. Stockholm, for example, has quasi-municipal dark fiber. The network was built by a company created by the city for that purpose. While the city owns the company, the city does not run the company, fund it, or control its business strategy (prices, deployment). The company built the fiber network using private capital, charging customers up-front for a hookup, and expanding the network over more than a decade based on demand and revenue potential (e.g. businesses first), rather than politics.