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County OKs Baldwin City broadband network

Published on -10/31/2013, 10:24 AM

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BALDWIN CITY, Kan. (AP) -- Douglas County commissioners have approved Baldwin City's plans to issue $5 million in revenue bonds to finance construction of a fiber-optic broadband network that will connect the city with existing networks in Lawrence.

Under the proposal, Baldwin City will own the network and lease it back to Dawn Fiber Design, which will construct the network. The lease payments will pay off the bonds and the network will be exempt from property and sales taxes during that time, The Lawrence Journal-World reported (http://bit.ly/19UGN7u ).

The vote came after a competitor, Josh Montgomery of Wicked Broadband, questioned the use of public incentives to build infrastructure to benefit one company and said the county should require Dawn Fiber Design to allow all providers access to the lines. Montgomery contended that because every broadband provider has to connect to every address, the first company to enter a market is nearly assured of a monopoly.

Kennis Mann, president and CEO of Dawn Fiber Design LLC, which does business as Free State Broadband, responded that because he is taking the financial risk, he should not have to share it with competitors. He also denied that the tax abatements are a public subsidy.

Baldwin City Administrator Chris Lowe said the city asked the county's approval only because part of the fiber will lie outside a three-mile zone around the city limits in Douglas County. He said state law requires that the county be allowed to object to the bonds but does not require the county to approve the bond issue.

Commissioners voted 3-0 to endorse the bond proposal.

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