It's amazing how cheap internet can be when the "company" providing it doesn't have to worry about a profit or keeping the shareholders happy.
You seem to have a very poor understanding of how democracies work.
My understanding is they are operating at break-even, so people that don't use it aren't really paying anything. In fact, it's saved the city government money that they were spending on very expensive commercial Internet access. Their problem is that demand has forced them to accelerate their build out (they projected very conservatively). Yes, being able to sell cheap municipal bonds helps. But capital isn't what's holding back the telcos. After all, a tiny city government just kicked their asses because they thought their customers had no other options. Also, it turns out that having widely available cheap and fast Internet has externalities that benefit even people that don't have it at home. Hard to fit on to a balance sheet, but still true!
You should really follow up on this, because it sounds like it would change your world view. Look up Jeremy Pietzold; he'd be happy to answer any reasonably worded questions you have about SandyNet. I think you'd find that he's generally an economic conservative, but perhaps he's more pragmatic than some. He's certainly invested more time than anybody here on this topic.