Monopolies ok in certain cities

Monopolies are illegal in the US right? Wrong, certain cities can make agreements only allowing certain companies into their precincts. Now I'm surei don't understand this fully, and it's more complicated than I think it is, but still.... AT&T universe, Comcast, Verizon, and so many more companies offering packages, and yet I live in a town where AT&T is not allowed nor is Comcast, my city has contracted with Verizon, so if you want local phone service, DSL, or cable you must go through the cities choice, and pay what they want. Even though I have AT&T as my cell carrier, and directtv as my satalite company I can't switch to uverse or Comcast there not allowed in the region. How is this a free market, to much this seems like that small town thinking were you have to pay a monthly fee for fire and police service, if you don't pay for service, you don't get coverage. How crazy is that? Doesn't this undermine everything they say our markets based on? No wonder everything is falling apart when corparations can purchase my business from my city without my ok.