This bug was fixed in the package cloud-init - 0.7.9-0ubuntu1

---------------
cloud-init (0.7.9-0ubuntu1) zesty; urgency=medium

  * New upstream snapshot.
    - release 0.7.9
    - doc: adjust headers in tests documentation for consistency.
    - integration test: initial commit of integration test framework
      [Wesley Wiedenmeier]
    - LICENSE: Allow dual licensing GPL-3 or Apache 2.0 [Jon Grimm]
    - Fix config order of precedence, putting kernel command line over system.
      [Wesley Wiedenmeier] (LP: #1582323)
    - Update the list of valid ssh keys. [Michael Felt]
    - network: add ENI unit test for statically rendered routes.
    - set_hostname: avoid erroneously appending domain to fqdn
      [Lars Kellogg-Stedman] (LP: #1647910)
    - doc: change 'nobootwait' to 'nofail' in docs [Anhad Jai Singh]
    - Replace an expired bit.ly link in code comment.

 -- Scott Moser <[email protected]>  Fri, 23 Dec 2016 12:54:50 -0500

** Changed in: cloud-init (Ubuntu)
       Status: Confirmed => Fix Released

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https://bugs.launchpad.net/bugs/1582323

Title:
  Commissioning fails when competing cloud metadata resides on disk

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