Why Is AT&T Trying To Block A Small Kansas Town From Building A Better ISP?

Chanute, a small Kansas town of 9,000, is pulling a high-tech move straight out of Google's playbook and installing its own fiber optic network so that residents might enjoy faster broadband speeds. This is much to the chagrin of AT&T, which provides its own Internet service to the town, albeit at slower speeds for a higher cost. If Chanute can demonstrate that a town committed to quality Internet service can take care of its own needs, why aren't we seeing more municipal broadband efforts around the country?

This Kansas town has a history of self-reliance -- it also provides its own utilities, ranging from water to sewage to electricity, and is the third-largest electricity producer in Kansas. Now it would like to step up its Internet game, as the town has already been an Internet service provider since 2005 for area hospitals, banks and manufacturers.

This means laying lots of fiber, which it already had running between its power plants. An upgrade of this system in the early 2000s saw technicians replace 24-strand fiber with 144-strand, meaning the network could carry vastly more data than before. "That [upgrade] kind of started our effort," Rick Willis, who has been the city's information technology manager for the past 30 years, said.

"AT&T said they're not going to invest another dime in our community since it's too small. But a number of our residents live out in the country where AT&T's DSL service won't reach -- it only serves homes within 18,000 feet of the telephone central office," Willis said. "These people either go without Internet or rely on a satellite connection, which is far more expensive."

Chanute's own fiber optic broadband would reach speeds of 1 gigabit per second for $40 a month, 14 times faster than AT&T's service at less than half the price. AT&T filed a formal intervention with the Kansas Corporation, so the project can't move forward until the state of Kansas grants permission.

“AT&T has not taken a position on this fiber network," AT&T spokesman Mark Siegel said. "As a provider in the area, any decision made by the [Kansas Corporation Commission] could impact AT&T’s business operations, which is why we asked to intervene in the proceeding.” It's only natural for a company to want to take some sort of action if its business might be against some sort of impact. AT&T's "intervention" gives it a legal means to keep up to date with any developments pertaining to Chanute's proposed network.

New York City announced in mid-November that it would be developing a municipal Wi-Fi system, called LinkNYC, that will turn the payphones around the city, rarely used of late, into free Wi-Fi hubs subsidized by digital advertising. "The city will be leveraging relationships with private Internet companies in order to make this happen," Nick Sbordone, of the New York City Department of Information Technology, said. "LinkNYC is a public-private partnership that oversees the professionals who already do this for a living."

While New York City's effort is interesting, it will be small, rural communities that lead the way. "This is the dilemma of the rural community: large for-profit companies concentrate their efforts in metropolitan areas," said Betty Zeman, marketing manager for Cedar Falls Utilities, which provides municipal utilities to Cedar Falls, Iowa, including fiber optic broadband. "They just do. Some communities have the confidence and cooperation to setup a better ISP themselves […] Every municipal broadband provider that I’m personally familiar with has found that companies that aren’t investing in broadband infrastructure at a level a community wants will be challenged." Simply put: the villagers grow restless when big business doesn't want to keep a town's technology modern.

A project like Google Fiber, which has already unrolled fiber networks in Kansas City and Provo, Utah, will make an excellent case study to see how a corporation handles relationships with incumbent ISPs while setting up a technologically superior service that many consumers want.

There are already a number of cities providing their residents with broadband service managed by local government, and it seems bound to only become more the trend. The first LinkNYC hotspots are expected to go online at the end of 2015, Google Fiber is gearing up to bring service to Austin, and Chanute awaits word from the state of Kansas on whether it can proceed with its plan to bring superior Internet service to its residents.