Yes, but that's not that hard to account for. Private companies don't seem to have much trouble. My question isn't "would municipal government be better than private companies", but "would federal government be worse"?

Private companies often don't serve (or underserve) those less populated areas. Their solution to that problem is to not provide service as they aren't required. Municipal broadband which is provided as a public service/utility, however, is better suited to serve everyone, as they are often required to do that rather than only focus on the areas that generate the most profit.

Most local franchise agreements require a certain level of internet service to be offered to a particular percentage of people. It's not regulated at the national level like the Universal Service Fund does for phones, but a national internet would certainly have similar targets.