That's basically what happened in Lafayette, LA. The city was building out a Fiber Optic network to serve the (municipally owned) electrical grid, and they decided to build a service selling Internet access on that fiber. It was set up a separate company that needs to grow organically, and it's been successful. Plus, I have reliable Gigabit Fiber to my house for ~$100/mo.

My wife can be watching Netflix in the Living Room while I'm streaming video to my computer, on an active (nearly lag-less) SSH connection, with a large file upload going on in the background, and you'd never know it. I have seen the Broadband Future, and it is good.

Unfortunately, found it in Southwest Louisiana, and I refuse stay here forever.