The City of Chanute has been provisionally selected to receive $508,467 from the FCC, as part of the Connect America Fund rural broadband experiments. This is subject to a post-selection review process, but Sega representative Mikel Kine predicted that Chanute should be able to satisfy the FCC selection process fairly easily. Kline is an outside contractor, working with the city on its fiber plan.
It is Kline’s understanding that this $508,467 would be cost support for the city’s Fiber to the Home network over the next six years. It requires the city to become an eligible telecommunications carrier, and to finance and construct the fiber network.
This money can be used to pay operational costs or offset a portion of the debt on the city’s investment in the local infrastructure over the next six years.
The process of obtaining these grants was established in December of last year, and required applicants to send in both financial and technical information to be considered. Chanute was one of 12 grant recipients announced on Wednesday, and was the only city to receive these funds. Chanute was also the only entity in Kansas to qualify for the funding.
According to Kline, it may also be possible for the city to receive ongoing cost support money from the FCC from the Connect America II fund in the future.
“We don’t know yet if this will allow Chanute to be eligible to receive the full 100 percent cost support determined in the FCC models on an ongoing basis after the initial six-year award,” Kline said in an e-mail to city officials announcing the grant, “or if Chanute might be limited to this bid price of its successful rural broadband experiments proposal.”
Kline suggested that the 100 percent funding level could potentially approach $200,000 per year.
If the Connect America Fund is extended out another 14 years after these rural broadband experiments, Kline points out that the cost support could potentially range from approximately $1.18 million to $2.69 million. That is in addition to the initial $508,467 award for the first six years.
“This potential cost support from the FCC would greatly enhance the value of Chanute’s network to the community,” Kline said.
None of this FCC cost support was factored into the initial business case for the Fiber to the Home plan that was approved by Chanute city commissioners.