It's cheaper in a large city because the provider doesn't have to trench a single wire dozens of miles to one single person's home. Fiber is ridiculously expensive, which is why you don't see a huge movement to start laying down fiber to every home or business in this country. They could do it, but the providers would still end up passing the "savings" onto the customer.
Yep same with electricity. A lot cheaper to hook up a huge apartment building with a ton of residents, then digging trenches between a bunch of homes. Or putting power lines up, then maintaining them.
There is also economies of scale going on. Where you can have maintenance crews and server technicians with a constant workflow, and little travel time. And specialized equipment in addition.
If it wasn't for our major cities being liberal meccas, stopping growth and doing crazed socialist engineering, I think many more people would move towards the major centers, as the cost of living would be so much cheaper.
The Chinese with their super dense cities are throwing in broadband like crazy right now.