If we actually had reasonable competition among local broadband (e.g. everyone in the country had a choice of at least 2-3 reasonable options, and DSL does not count as "reasonable" anymore), then I'd actually call the introduction of a government-backed option "anti-competitive", because how can any private ISP compete with that? A government-run ISP gives itself inherent anti-competitive boosts that it doesn't give anyone else.
However, in the world we have, where many people don't have enough reasonable choices to allow for actual competition among ISPs, municipal broadband seems like a perfectly reasonable response. In which case, rather than attempting to quash it, I'd rather see communities lay the fiber and then allow private ISPs to be the ones to light it up and provide bandwidth from the nearest meet-me room.
If the answer to your rhetorical question is supposed to be "they can't" then government-provided broadband is manifestly superior to anything the private sector can provide. Why would we as a society not want that?
Private ISPs can't do any of those things; they actually have to pay for infrastructure, follow regulations in installation, etc.
Personally, I'd prefer to see either community-run pseudo-ISPs ("we laid some fiber and contracted for bandwidth"), or fiber made available as infrastructure but the bandwidth handled via the market (much easier to have healthy competition).
"in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority."
It would be awesome if we actually had a choice of provider, however you're generally limited to whatever ISP's 'turf' you fall into.
https://en.wikipedia.org/wiki/Free_market
EDIT: I just reread you comment and you're not claiming it's a free market <apologies>
What is the value of that? Wouldn't that be effectively privatizing the gains and socializing the cost?
I believe internet is a utility, and it would be great to see it regulated as such including service level and price.
No, it would be having the government provide the infrastructure that we only need one of (fiber to individual homes), while encouraging competition among service providers, rather than stagnation with a single monopoly.
Offer faster speeds and more reliable connections (compared what might be a very congested public network), at reasonable prices.
This is always a risk with any government. The problem is voters keep voting for these same people passing these laws (or worse yet, don't even vote claiming "nothing will change anyways."