Chanute -- a small Kansas town with a population near 9,000 -- is seeking to expand its current municipal fiber in order to offer broadband services to its residents. To do so, the town must abide by a law from 1947 to seek permission from the Kansas Corporation Commission (KCC) to sell bonds for the funds to build out the infrastructure. However,
AT&T holds concerns over the potential effects the municipal service will have on the area, large enough that the company asked for permission to intervene into the proceedings.
Currently, Chanute utilizes a fiber network that delivers broadband to government facilities in the area, as well as the local community college, hospital and select businesses. This is beyond other services the city offers to the public, such as free Wi-Fi in its parks. The city is proposing a "fiber-to-home" project, offering residents the chance to get 1Gpbs fiber connections for only $40 a month.
In order to do so,
The Wichita Eagle reports, Chanute must ask the KCC for
permission to sell bonds to cover the cost of the expansion. Since Chanute would be doing the build out as an expansion of its current utility, it falls under a law from 1947 that "requires municipalities to get commission approval for bonds to pay for constructing, expanding or improving utility service." There are a few catches, including the fact that the expansion cannot result in the duplication of utility services that already exist in the area or areas to be served by the municipality.
AT&T's subsidiary Southwestern Bell Telephone Company learned of Chanute's plan to expand fiber, then
petitioned the KCC for the chance to intervene in the proceedings. According to AT&T, its interests -- along with its customer base -- could be affected by "any order or determination of the Commission" makes in regard to the city's request. The KCC
granted AT&T's petition, since it asserted its legal right to do so without impairing the proceedings.
"AT&T intervention at this time is just a process. We are not expecting any issues," Chanute Utilities Director Larry Gates told
Ars Technica.
Southwest Bell Telephone Company and Cable One are the incumbent providers in the area, however, their services are of lesser speed than Chanute intends to offer. One of the main reasons rural and smaller communities create municipal broadband networks is that larger providers don't see the population as profitable or worth the effort.
AT&T only offers download speeds up to 18Mbps is some cases, through 6Mbps is more common. The company is capable of serving business customers up to 10Gbps. Cable One says it can roll out gigabit to customers that request it, but not to everyone the area. Residential services cap at 70Mbps down, while business customers can get up to 75Mbps.
All of the options mentioned from the commercial companies would cost far more than the municipal offering. Because of these factors, Chanute believes it isn't duplicating services in the area, instead, it intends to serve better options than are currently available at rates said to be 60 percent lower than competitors in the area.
In a statement to
Ars Technica, an AT&T spokesperson told the publication that the company hasn't "taken a position on this fiber network." The spokesperson echoed sentiment from its request to intervene, adding that a decision from the KCC "could impact AT&T's business operations, which is why we asked to intervene in the proceeding."
However, AT&T's attempt to involve itself in Chanute's fiber expansion fight may be too late. Gates informed
Ars Technica that a new report came down that leans in the town's favor. A KCC
staff report, filed December 3, recommends the commission grants Chanute's request.
"Staff concludes that, although there are current providers of telecommunications and broadband services in the Chanute area, the existing utility services are not identical or the same as that proposed by Chanute," reads the report. "Staff, therefore, concludes the Chanute's expansion plans will not result in the duplication of existing utility services in the area to be served by Chanute."
While Chanute could win its bid to sell broadband services to its residents, it's unlikely that the fight is expected to end any time soon. The city already fought against a lobby group bill -- submitted without a sponsor -- in the Kansas Senate that attempted to ban municipal fiber projects. The bill was shot down in February after harsh criticism.
However, the provider has seen success in the state, as an AT&T-backed bill passed the Kansas House and Senate in 2013 by
sweeping votes. The bill granted a third round of telephone deregulation that benefited AT&T, giving it the chance to pull further away from landline requirements. In September, the company also stated its strong stance on government-owned broadband, adding that they "should not be utilized where the private sector already is providing broadband, or can be expected to do so in a reasonable time frame."
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