Nevada, Missouri, a town of 10,000 has commissioned a Wi-Fi network to be built in town: The city is paying NeighborLink $25,000 to build the network. but it's not clear how extensive the network is. Without the network, which offers broadband to homes and businesses, city residents could only dial-up for Internet access.
The story notes that private providers may feel uncomfortable competing against a service like this one that is funded by the city government. I've been curious about how that may play out in a number of circumstances. However, here no other provider was willing to offer any kind of broadband so the city took the matter into its own hands.
Around the country a number of municipalities are funding broadband networks--wired and wireless--because the big boys won't serve them. In those cases I don't think a potential conflict is an issue. Cities can't be expected to wait forever for the big boys to pay attention to them.