One of the reasons we've got YouTube was that private fiberoptic companies (stupidly) overinvested in laying new fiber cables during the dot-com boom. When the crash came, the price of bandwidth fell through the floor. Then it became economical to build video-sharing services and AJAX webapps and other high-bandwidth apps.
In the U.S, our electrical grid is a regulated monopoly - not quite government owned, but it functions effectively like it is. A couple years ago we had a huge problem with blackouts and brownouts and a general lack of electrical power. All the spare capacity in the grid had been used up, and nobody had an incentive to build more. I worry that government-owned bandwidth will result in the same problem.
But shouldn't the government only be concerned with providing a usable signal? If you want a fast signal, then leave that to private enterprise. You can pay them for a faster connection, and they can pay the government to upgrade the infrastructure in a particular area.
Since I'm not a USian, I don't know what to make of your arguments about congress and the like, but it worked out fine here in the past.
I live in Alberta and up until a few years ago the telecom was owned and operated by the provincial government. It dropped copper to every house. I don't see why fiber would be any different. Some provinces still run their own telecoms.