Topeka AT&T Inc. plans to spend $247 million through 2008 upgrading its Kansas networks to provide digital video and voice services across the state.
The company's announcement Friday was a response to enactment of a law this year to rewrite the rules governing cable television franchises. While AT&T isn't getting into the cable business, its video services are designed to compete with cable services.
The law, taking effect July 1, will allow video services companies such as AT&T to obtain a single franchise from the state, rather than having to negotiate them city by city and face different requirements in each location, as cable companies do.
Backers of the new law believe making it easier for AT&T and other companies to offer video services will increase competition and ultimately decrease prices for consumers. Only Indiana, Texas and Virginia have similar laws, said David Kerr, AT&T's Kansas president.
AT&T hopes to deliver video, voice and high-speed Internet service with fiberoptic cable. That video portion would include TV programs ranging from network shows to movie and sports channels.
The company says consumers eventually will be able to link their computers, television sets and cell phones. State officials see the potential for new jobs.
"Anytime you have an investment, there will be additional jobs," Kerr said during a news conference. "One would expect that when you introduce new products and services and you have an investment of $247 million, there'll probably be some jobs that come with that."
Nationally, AT&T expects to spend $4.6 billion in an effort to make its Internet-based video and voice services available to 19 million homes.
Joining Kerr for his news conference were Commerce Secretary Howard Fricke; House Speaker Doug Mays, R-Topeka; Senate President Steve Morris, R-Hugoton; and members of the Senate Commerce Committee.
Sen. Jim Barone, D-Frontenac, a committee member, noted that most Kansas communities have only one cable TV company because cable firms won't "overbuild" in a community.
"Customers want choices," Barone said. "If we ever want to bring competition to the cable industry, this is the way to do it."
Cable companies initially resisted the legislation, arguing they already faced strong competition, particularly from satellite companies. They said AT&T would have an unfair advantage with cable companies locked into long-term contracts with cities.
Some local officials also worried that as more consumers purchased services from AT&T and similar companies, they would see their cable franchise fees drop.
But legislators included provisions to allow cable companies to renegotiate their franchise agreements when facing competition and to permit cities to charge a tax of up to 5 percent on a video company's gross revenues.