government basically gives a monopoly essentially to subsidize a company laying [lots of] cable to a limited number of customers over a long distance. There's simply no way for a company to profitably serve an environment like that with a wired protocol. Wireless maybe ... who knows?

So if we determine that a lack of broadband internet to rural areas - because it's not profitable - is a market failure (and that getting broadband out there is in the public interest) ... the government only has a few levers they can pull it seems to me:

1) they can subsidize the plans directly and/or guarantee a certain amount of revenue that they'll make up if a provider can't earn it in the marketplace

2) they can give an in-kind subsidy by guaranteeing a provider they'll protect them from competition by regulations

3) they can provide the service themselves

#3 is pretty much not going to happen except some kind of urban public wifi (still going to ultimately go thru a private provider) ... so between #2 and #1, I think you can easily make the case that #2 is the more fiscally responsible decision for a small local government ... at least in the short term. You may ultimately have to answer to your consituents about why you gave a "sweetheart deal" and/or why a company is getting away with charging rack rates and giving no promos in your area. But again ... what are the other options?