The concern in this case is that the public sector is using tax dollars and grants from federal entities to overbuild an existing private network, in turn generating income in the areas that have higher densities at the expense of the less dense areas. This effectively leaves those "unserved" still without service, despite all residents paying for the network via their property taxes.
Should the same thing be done by a new-comer into private industry, done without tax dollars, or would connect all those who wanted it there would not be a problem. Protecting monopolistic behavior is simply the knee-jerk reaction to the story.
Further, as Google's Provo offering is no longer a "public entity" offering, it isn't even subject to the bill.
However, at the same point Google would not have been able to enter the marketplace in Provo should the town not have done the initial heavy lifting.