The emergence of municipal broadband networks provides an additional source of financing - from the municipal government - for ICT service development. There are encouraging and discouraging examples, which are described briefly below.
The Reference Document Diversifying Network Development: Microtelcos in Latin America and the Caribbean identifies a number of small-scale network initiatives in Latin America. Among these, the Pirai municipal network in Brazil is a successful case that commenced from the demands of the municipal authority but spread to become the cornerstone of a broader and visionary plan to diversify the local economy and attract new investments through ICT and network development. The project included e-government, education and public access, with a range of application support and development activities. Many broadband access nodes have been established connecting all local government offices and most of the public schools, libraries, and general public access points. Broader commercialized services to households and businesses were also established though a public-private company. It appears that all financing flowed first of all from the municipal government and even though a commercial enterprise was later established, it was funded and supported by the municipality. The Practice Note Pirai municipal network describes this case. 
On the other hand, several municipal Wi-Fi networks have been initiated in the USA, some with very limited success. Most of these are proving themselves to be operational failures because the cost and technical complexity of building the networks for reliable operation is high, the revenue base had been largely unproven before the plans were laid, and effective commercial relationships were either not established or, in the liberalized environment of the USA, tend to create conflicts between public and private interests.
Financial support for networks that are not built on the basis of solid demand and commercial feasibility will usually prove unviable, unless one player (such as the municipality) has limitless resources. Generally speaking, such networks should not be considered unless the municipal government is willing to pay for its development and to become the anchor tenant and thus to under-write operating costs at the start, as well as to form alliances to create vision and collaboration. This clearly took place in the Pirai case in Brazil, but has been lacking in most of the USA cases.
On balance, this model is difficult to use for building a strategy for the developing world unless central or local government has both the vision and resources to under-write the initial installation and first few years of operation. But even then, the relationship with private sector interests (e.g., ISPs) must be clarified and it must be proven that the establishment of municipal networks does not run counter to general market development, which must eventually take place, and the health of private sector operators.
- See also infoDev's study, "Municipal Broadband Networks - Local Open Access Networks For Communities and Municipalities".