Because these same cities have rigged the fiber business through cable franchise rules that essentially award local monopolies. That's why there's not enough competition currently.
There has been some movement at the state level to create state-wide cable franchises, allowing business to ignore locals. There's also the idea of a national franchise. Really it is insane to me that we require this business to be licensed at all. Newspapers don't need licenses, why should internet providers? You should have to get permits to lay cable, but not to be a provider.
Interestingly, while Congress allows the cable operators to run wild over local communities, there is a strong federal preemption for satellite tv-- the locals have no say in it, and federal law even creates a federal right to have a dish on any residence (a lot of local governments tried to zone dishes out of existence to protect their cable buddies).
How many local governments have you served in or had any interaction with while they were negotiating their cable operating agreement? Just curious.
I served in one. Negotiated two of these contracts, a re-up with Comcast and a new one with Verizon for FiOS. We weren't corrupt. And I publicly supported the idea of a state wide cable franchise, right up until the moment that the telco lobbyists started crapping it up with a bunch of unacceptable terms (the bill eventually died).
Local officials generally don't get into it for the money, and there's no easy way for a national telco to give a local official a backhander without it being straight-up bribery. It's not a "favors" thing like with towing contracts or something like that.