AT&T (NYSE: T) is continuing in its ongoing battle to stamp out would-be municipal broadband competitors with its latest move to challenge Chanute, Kan., from building a fiber-to-the-home (FTTH) network that could deliver 1 Gbps service to residential and business customers.

Although the city was able to defeat an AT&T-backed and written law that would hinder the city from offering services, the city now has to get permission from the Kansas Corporation Commission (KCC) to sell bonds to fund its FTTH project.

Municipalities have to get the KCC's approval for bonds to pay for building, expanding or improving a utility service. Under the terms of the 1947 law, the KCC has to determine if Chanute's proposed service "is necessary or appropriate for the municipality and its consumers, and for the protection of investors and will not result in the duplication of existing utility services in the area served or to be served by the municipality."

In its filing with the KCC, Chanute city officials said that its proposal won't provide a duplication of services since AT&T and Cable One don't provide anywhere near a 1 Gbps speed to customers.

"Neither of those providers offers the level of service throughout Chanute's utility service area that Chanute will be able to offer its citizens as a result of the investment planned for Chanute's network," the city wrote in its filing. "As such, there will not be a duplication of existing services, even if such a consideration were still relevant today."

Larry Gates, Chanute's utilities director, said once it gets the commission's approval, the city can issue the bonds and begin connecting customers, according to The Wichita Eagle. "This is our last hurdle," he said. "I imagine we'll do it right away."

AT&T, which joins Cable One as one of the city's two incumbent service providers, filed a motion to intervene.

"Any decision made by the KCC could impact AT&T's business operations in the area, which is why we asked to intervene in the proceeding," AT&T said in a written response to questions from The Wichita Eagle. "AT&T remains interested in both broadband issues and the work of the KCC."

Taking a page out of Google Fiber's playbook, Chanute plans to offer the 1 Gbps speed service for $40 a month for residential customers. Today, AT&T offers 10-25 Mbps service, while Cable One offers 50-100 Mbps.

Chanute is not a fiber service novice, however. The city already provides fiber-based broadband services to a number of government facilities, some businesses, the local hospital and community college. It also offers free Wi-Fi in city parks.

Already, the hospital is finding utility with the fiber network to provide telemedicine to connect stroke patients to specialist doctors in Wichita, while the college has seen growth since getting the fiber connection.

For more:

- The Wichita Eagle has this article

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