If there are certain things to be guaranteed to residents of a country, state or city, then it should be the government/council's job to provide them. I'm talking about things like roads, fresh water and electricity. That doesn't necessarily preclude private enterprise from offering competing products, nor does it mean the government can't charge for services on a volume basis (eg public transport is tax and rates supported, but you still pay a fare to get on).
The government may be inefficient at providing such things, and may waste money or do it rather badly, but if it were all up to private enterprise, the only residents who benefit from infrastructure and services would be those for whom it was profitable to do so.
It is under this model that cities should be providing internet access to residents. You'd still need to call a service provider and get connected, but then you'd pay for what you use, probably in a post-pay tiered system. Between 0-100MB/month is so many dollars, 100MB-1GB/month is this much and so on.
Mokalus of Borg
PS - But that's probably not going to happen any time soon.
PPS - At least not where I live.