It's wrong that total lack of oversight generates competition. This is why there are protections against monopoly and anti-competetive behavior. However, like the article said, ISPs, the big ones, have essentially formed a cartel, gaming the system to keep competitors existant, so that monopoly can't be claimed, but competition to a very low and slow level, so they don't have to quickly adapt to competitive offers.
While it's true that government is in general more costly and less efficient than the private sector, this is only true in a competitive sector/market. It would be laughable if the government decided to launch a search engine to compete with the likes of Bing, Yahoo and Google. Or to start making cars to compete against Ford, Tesla or whatever. It'd be a slow, sub-par, expensive by comparison and badly serviced thing.
But the reason that big ISPs are worried is because in the lack of competition they are providing slow, sub-par, expensive and badly serviced internet access. It should be telling that they're lobbying against municipal broadband.
The point isn't to replace the private sector in providing internet, it's to prohibit the anti-competitive behavior we've been seeing in the *recent* past (the internet was fine in the olden days because we didn't have these massive ISPs with nearly unlimited resources and political inffluence). But more importantly, by offering (not forcing you to sign up) to municipal broadband where ISPs are bad, ISPs are forced to either offer MINIMUM decent services, or loose customers). It's a PRO competitive thing, not anti. It's a win win situation, either ISPs step up to this rather modest minimum standard, or you get this standard from the gov.
As for government monitoring, that's only a concern if you sign up for gov providers, but you won't have to, because ISPs will up the ante and offer bare minimum decent services and, on top of that, will be forbidden to monitor what you're accessing.