2) I would absolutely rather have an unbiased and fair agency installing utilities than a rent seeking public company that is beholden to shareholder value.
Since my parents first got fiber 10 years ago, Verizon has spent a ton of money upgrading from BPON to GPON, and now is working on NGPON2. If a public utility were in charge, even if they were willing to raise the money to install fiber in the first place, there is no way in hell they'd have made those upgrades.
You can see this in practice. Here in Maryland, the only upgrade in transit service I can think of in my lifetime is running the Penn line from Baltimore on weekends. More typically, the public authorities run the transit systems on the edge of collapse. Simply maintaining existing service levels in the face of under-maintained infrastructure is considered a victory.
What incentive does a non-profit have to invest the billions of dollars required to do these things? If you use public dollars to do it: what do you think happens when investment into upgrading from GPON to NGPON2 is competing for taxpayer dollars with roads and schools? I can't imagine that anyone in say San Francisco would rather have SFMTA running their internet than Comcast.