And when the municipal broadband costs 10x as much, just raise taxes and throw people in jail if they don't pay. And if the service is bad, again raise taxes and throw them in jail if they don't pay. And if they complain, just raise taxes and throw them in jail if they don't pay.
Your competition being able to raise prices (taxes) at the point of a gun to pay for their bad business is a competitive advantage. Not being able to opt-out is a monopoly with the police enforcing it on citizens.
Sure it might be better, but it definitely can be much worse.
If you do a decent job of structuring the municipal broadband delivery company, you can bias it towards the “better” end of the spectrum. For example, you can require that there be no cross-subsidy between broadband and any other municipal function, and no support from general taxation.
The broadband company would have to support itself through user fees, like the Water District does in my town. You pay a monthly fee if the fibre runs past your house. If you want to connect the fibre to your home, you pay a one-time connection charge, followed by a higher monthly fee plus a charge per bit for incoming and outgoing data. If there is a problem you pay to call Customer Service, and a higher price if the call requires a technician to visit your home. These charges would be refunded if the company decides that the problem is their fault. There would also be a service level agreement, and your costs are reduced to near zero if it isn't met.
In addition, and this is crucial, there must be no legal barrier to someone else running his own fibre, and connecting it to the municipal system. He would pay the municipal system for his connection, of course, and provide his own customer service. That competition, or even the possibility of it, will keep customer service quality high.