The trend toward "municipal Wi-Fi" is disturbing, from a number of perspectives. First, it represents yet another distribution of wealth from those who produce it to those who don't. Second, and in a sense more disturbing, it will chill the private development of alternative and potentially superior solutions.
Certainly, there are those who don't currently utilize the Internet who will, once it's free. There are also those who are currently paying for Internet access, who will switch to the free offering. Companies that have made investments in providing wireless Internet access will lose money, and will pull out of that space. They and other companies will also forego investing money in newer and better technologies, both because of the potential for government to render their investments worthless and the lack of penetration due to those people who will stay with the inferior but free alternative.
Note that this discussion does not apply to the efforts of private (i.e., non-government) companies to offer access, such as Google's project in San Francisco. A private company invests its own money (or that of its investors) with the intention of gaining a return. Either they have a good business plan, and will succeed, or a bad business plan, and will fail. In either case, it's their money that they're investing, and they do so based on free choices with specific return-on-investment objectives.
Government, on the other hand, has no such limitations. Government can spend any amount of money, for any length of time, for any level of service, based on any technology provided by any contracted organization. All decisions are made not based on a desire for profit, but based on fiat. That means, decisions are based not on the desires of paying customers, i.e., those willing and able to spend their money on the service, but rather on some committee's definition of what people "need." It's difficult to imagine a more capricious decision-making model.
Ultimately, we'll all suffer from such activities. Some higher-speed, more efficient, ultimately less expensive technology will be delayed or, possibly, will never be developed because no company will be willing to invest in it. And, given the possibility that government will offer a competitive, "free" service, or at best will sanction a single provider, one can't blame them.
Certainly, a capitalist would disagree vehemently with such programs. But everyone who loves technology, and who recognizes its potential for improving man's life, should be just as opposed to it. Likely, many won't, however, because they simply can't turn down an offer of a free lunch.
There was a time, though, when everyone knew there's no such thing.