The Feds’ regulation of utilities applies to both urban and rural areas, and has little to do with govrenment support. Universal Service Fund helped connect areas that are completely uneconomic to supply with telephone lines. A similar concept is proposed under the infrastructure plans, and there’s more technology that is and will be available to provide broadband than there was during the Ma Bell monopoly days.
Plus if you give states more control over broadband, you will risk balkanizing policies because of outsized influence of some states (like CA tries to do on emissions).
The programs are boondoggles no matter who’s involved. The issue is who’s best positioned for the task? Leaving matters to local/state can get more wasteful because there’s less accountability. In NYC region, there are 6 separate public transit agencies sharing the same infrastructure and vying for funding. And people wonder why it’s a mess.