How are these not natural monopolies? if you own the sewer system, then who's going to compete with you?
What is a "neighborhood institution"? sounds like a local government... ;-)
A condominium. Like, when you own an apartment, you partially own the common parts of the buildings. When you own a house on a private condo, you partially own the streets and common area etc.
The local networks (streets, plumbing, electric cables etc) could be owned by the condominiums, which would then contract "backbone" providers.
It's not like a government because it's voluntary, contractual. (okay, to switch from the current system to such a system it would be hard to make it 100% voluntary, but it would be at least much closer to a voluntary institution than when the state controls everything).
Voluntary in what sense? I can enter a contract with another condo if I like... So I have choice. Essentially, I see this as competition in governments; voting with your feet. If I am free to change my local government, then this is a voluntary system. This is a vision of decentralised of government, which I like.
Really, we're just arguing about definitions. The condominium is not THE government, but it functions as a form of government: votes, taxes, laws, regulations, maintaining infrastructure, etc. So when I say that natural monopolies should be owned by the government, you actually agree with this, but have added decentralisation into the equation.