Swedish nerd here, setting some facts straight. (Score 1)

(1) The open city networks in Sweden are generally expected to pay for themselves through the small fees they charge ISPs when they sell their services on them.
  Here is a report (in swedish) from The Swedish Post and Telecom Authority (somewhat equivalent of FCC) on the cost/price calculations commonly done:
If I understand it correctly, they calculate a return on investment of different periods for these categories:
Canalization: 15-50 years (recommended 20-40 years*)
Fiber: 10-30 years (recommended 20-30 years*)
Active equipment: 3-10 years (recommended 3-5 years*)
Equipment at customer: 0-3 years
*recommended by the Swedish City Network Association, a non-profit organization comprising the municipalities and municipality-owned companies who have city networks.

(2) The networks are often built for a much lower cost than you might think. Since it's the municipalities and local utilities building them, they have been taking the opportunity for years whenever there is road/construction work for other purposes to just lay down empty ducts everywhere and later using Cable jetting to build the actual fiberoptic network.
I was told by the CTO of the municipality-owned utility company where I used to live that doing it that way brought down that part of the costs from ~$5M to ~$0.4M versus digging just to lay fiber.

(3) Even if the municipality has a monopoly over the city network infrastructure, there is always competition from xDSL, cable-tv and a handful of different 4G networks, all of which are also available pretty much everywhere.
I happen to live in one of the few municipalities with a privately owned city networks, but i still have a choice from more than a dozen different ISPs, two of which offer gigabit connections at just over $100/month.

(4) The customers are normally never in contact with whatever organisation is running the city network, they deal directly with the ISPs offering their services on them.