If they want to pay the cost of Fiber then Yes, they would do that.
I can't see them running the whole city that way though ...
Takes longer to splice Fiber than it does copper, mainly because of the different equipment involved.
In the article they say that is essentially what they are doing. They have pictures of where they cut off the old copper trunks and replaced them with new fiber runs. NYC is a FIOS area so, I assume they have a good head start with the fiber runs.