That generally doesn't work out very well. If the incumbent keeps half the customers, the cooperative then has almost all of the same expenses but half as much revenue. And so does the incumbent. So costs per customer are double until one of them goes out of business.

This is what's happening now in the areas that have a legacy telephone company and a legacy cable company. The telephone companies have essentially given up on upgrading their infrastructure and are just milking what already exists until the cable companies put them out of business, because coax can carry more traffic than telephone wire. And neither of them is interested in installing fiber while the other still exists, because it would force the other to either do the same or slash prices, either of which is worse for both of them than the status quo.

So, the coop actually has a pretty unfair advantage, but as long as it's local communities, I'm mostly okay with it. And as to local communities, larger cities are more disconnected than smaller towns. So there's some difference there. The coop doesn't have to be setup to recover initial outlay... it depends on the structure and how it's setup with the local municipality. As to the incumbents, they were also largely funded via tax dollars for initial outlay, and instead of planning for reinvestment/growth, they've chosen not to do so, and deserve to see upstarts encroaching on them.