When a municipality is "not allowing competition on the poles", that doesn't the municipality is standing in the way of a natural free market. The act described as "allowing competition on the poles" is actually an act of regulation. It is telling whoever owns the poles what to do (even if that whoever is the municipality).

This is no more "opening up to the free market" than if someone owns some land and a regulator says "you have to allow other people's cattle to graze here and must charge what we consider a fair price".

--> This isn't to say free markets are the best or that we should unregulated natural monopolies in the name of private property. Rather, regulatory pseudo-markets often wind-up just as shams to allow effective monopolies without implied responsibility to the public that a regulated monopoly has.