This works rather well where I live, in Sweden. The local government runs fibre through the community, the ISPs provide services. Hundreds of local municipalities or towns are connected this way. I only had to pay to connect my house to the fibre, access from then on is free. The ISPs (12 of them) offers services over the fibre. 100 mbps unmetered from $29/month or 500 Mbps for $79/month.