And in instances where under-served areas tried to create their own municipal broadband network, the ISPs that weren't serving them sued to stop them or got their lobbied state officials to pass laws declaring that illegal.
Their argument is that government shouldn't compete against private enterprise. They didn't sue to stop an independent non-profit or an small business from starting an ISP.
If a community isn't being served by an existing ISP, why is municipal broadband "eliminating competition"? If an area has an ISP but they are refusing to improve service, how is adding a municipal broadband option eliminating competition?
Again is it okay for the government to compete with private enterprise?
People were upset when Walmart used their corporate capital and scale to undercut local businesses and caused them to close and eliminated a lot of competition in rural America (remember Walmart targeted rural markets first). People should be even more upset if the government used tax dollars to undercut a business and cause them to close. It sets a dangerous precedent and a lot of people prefer the government to stick to the basics.
Is the presence of the USPS eliminating competition from FedEx and UPS?
Apple vs. Oranges. The USPS already existed when both FedEx and UPS were formed. Also FedEx and UPS are private enterprises that offered services that weren't available from the government backed USPS.
People take offense when the government decides to compete with private enterprise in an established industry. People do not take offense when private enterprise competes with the government by offering services not provided by the government. A capitalist society favor capitalist solutions. I don't always agree but that's the meat of the argument.