Using power to tax to directly compete with private investments is a slippery slope and rightly deserves a day in court.
Sort of like Biden canceling student debt by executive order when the constitution says congress has the power of the purse. You can assign the blame to Biden, Republican AGs, the Supreme Court, or the authors of the constitution. Doesn’t make much difference, so long as the issue is correctly understood. A day in court makes sense.
There was a contract between every municipality and ISP with an explicit term that the municipality couldn't finance a competitor? That seems unlikely.