Once again, a government is organizing (or offering, depending on one's point of view) a service that private companies would provide if they could make a profit doing so. In all likelihood, if even marginaly "successful" (by whatever bureaucratic definition of success used), municipal Wi-Fi will drive out future, better technologies by offering just enough service for the typical user at just low enough of a price. And, once in place, government will have a vested interest in making sure "its" service is successful, up to and including making it prohibitively expensive for competition.
Mark my words. Things like this will set back better technologies, like WiMAX, for years to come.