Comcast cannot "undercut and win at any point", they still have to make a profit, which the city will not have to do. And the city would have a risk of what, not making a profit?

Greater speed, lower cost, net neutrality. Much of Cambridge can't get fiber, so people have to choose between cheap and slow or fast and expensive cable internet. And even when you choose the fast and expensive plan, the actual speeds never meet the advertised speeds. The city will also offer even lower prices for low-income residents, who don't even have the luxury of choice, they're just stuck with the cheapest option. And then there's net neutrality, a founding principle of the internet that is no longer legally guaranteed and unfortunately is left up to the ISPs to decide if they want to preserve it for their customers. The city would have a mandate to ensure net neutrality.

Here's some basic info about municipal broadband around the country: https://communitynets.org/content/successes-and-failures