Um after the healthcare.gov disaster you want a government organization to provide your local internet. I will pass on the bright idea.
Just because the government owns the network doesn't mean that it runs it. My city has a municipal fiber network and I couldn't be happier. Fast speeds, low price and good service from my (local) ISP. Any ISP/Phone/TV provider is welcome to provide service on it.
Right now, the network is run by the Utah Infrastructure Agency which is a quasi-government company, but the cities are currently considering a proposal by a private company to manage the network and complete the buildout to every home in the member cities. The proposal sounds like a pretty good one -- everyone in the city gets a 3 MB symmetrical connection for free (included in taxes, anyway), a little extra will get you whatever speed you want. My current connection is 30 Mb symmetrical but you can get 1 Gb if you want. So the government (which technically is the people) own the network but a private company will operate and market it. Open access, any company can provide services and they seem to be able to pull it off for less money than Comcast charges so what's the problem?
Your imagination tells you a government-owned network would be a bad thing but I am actually experiencing it and it is good. I don't want the feds to own my network but I am just fine with my city government owning it, at least there is a LITTLE accountability there. (BTW if anyone is in a Utopia city watch for public meetings for the proposed Macquarie Capital deal, Orem, Murray and Centerville are having them tomorrow. Let your voice be heard!)