How would unpressurized water go from a pipe under the street to your shower head?
To be clear, it is not the case. Water Towers are elevated specifically to provide pressure.
I mean, besides making it a biohazard to repair.
But it seems there are at least a couple of working installations of that type in the world and companies offering it commercially instead of in 'perpetual trial' mode. Repairing those must be a pretty shitty job.
17 km is a pretty good stretch, that means it won't be a single run but quite a few of them with entries and exits every time they need to make a splice. It's also going to be pretty rare to find a stretch like that that just so happens to run exactly where you want fiber to go (and a nice little problem on how to route the cable around those splices so you still respect the minimum bending radius of the fiber for all phases of construction and use). Rural would be the most likely candidate, long runs, few splices. If the get the POC to work reliably across a couple of years without the water utility ripping it out at some point because it causes them trouble then more power to them, but I would not bet on this.
Also: the force of a bunch of water flowing along a fiber should not be underestimated, you won't be able to do that for a very long distance before the pull overcomes the breaking strain of the cable. It might cause the cable to get pinched on turns and rub against the inside of the turn potentially abrading the outer shell as the water flow rate varies considerably between peak and off time usage (and contaminating the water supply with the debris).
In the end the reduction in construction costs is a savings for the company that wants to lay the fiber but they will have to pay compensation/rent to the water company for being allowed to use their conduit, probably have to indemnify them for any (long term) damage and every time there is an issue with the water system they run the risk of having their stuff broken. 17 km is also long enough that you'll be passing more than one set of baffles (which are used to reduce the effect of waterhammer on the valves and the pipes), I wonder how they plan on dealing with those or if that's going to be more entries and exits.
The only remotely feasible solution that I can think of is a pipe-within-a-pipe and then to blow fibre through conventionally, that would give you the rigidity required for mechanical integrity and it will probably seal well enough that you can do it with water pipes under pressure. That's not going to be cheap but it just might come in cheaper than trenching or burrowing using remote controlled moles, it will of course still reduce the available capacity to carry water and require entry/exit every time there is a piece of infrastructure in the water system.
This is not correct. While PEX pipe has become popular, a lot of homes are still built with copper plumbing. And lots of municipal water infrastructure contains a lot of metal.
My first thought was "eh, more plastic leeching crap into the water", but then I remembered that all modern water pipes are already plastic.. too late for that.
Most importantly, I was under the impression city-wide water pipes are rarely pressurized, the water 'runs' through it with a substantial air gap - that means entry/exit points are easy, and nothing actually needs to be in contact with the water. Is that not the case?