That's a much harder decision for the state to make -- the state has to evaluate business plans, determine the financial health of bidders, oversee implementation and monitor the business forever to ensure it's meeting the terms of the deal.

While if they give access to local governments, the state only needs to install the fiber -- it's up to the local government to determine how to use it to best serve the public. And in this case, the local government intends to lease the infrastructure to private businesses:

the city would build the infrastructure and lease capacity to private internet-service providers