I moved to Berkeley for university and there are several competing options for gigabit internet (including Sonic, LMI, etc.). When the gigabit service arrived to disrupt the AT&T/Comcast duopoly, suddenly the customer was important, and we were able to get great speeds, prices, and customer service.
What I'm saying is that you don't necessarily need to make internet a public utility to improve service, just to get some real competition. If that competition needs to come in the form of municipal fiber, then that might also work, but it could also be a private company.