Sandy's system covers the 2,400 housing units within city limits, and it cost $7.5 million, so it cost over $3,000 per house to wire up (or $3,500 per subscribing household). Which is actually on the higher side considering that Sandy is a pretty dense little city (about double the density of a typical suburb).

Assuming the city can get a 4% bond, and depreciates the asset over 20 years, about $27 of that $40 goes just to depreciation and interest.

That cost is actually fairly typical. What isn't typical is an 83% uptake rate. Average for municipal providers is about 54%, and average for private FTTH providers like Verizon is 30-35%. If your uptake rate is 35% instead of 83%, your monthly cost in depreciation and interest alone jumps to $64. That's before the cost of bandwidth, maintenance, customer service, etc., which typically eats up about half the monthly bill.