New customer numbers fall below AFN plan

New customer numbers fall below AFN plan

By TONY BOOM

ASHLAND - The numbers of new customers for Ashland Fiber Network Internet have fallen behind revised - and lowered - projections made in April, bringing into question an estimate calling for a 236 percent increase in Internet hookups by midyear of 2002.

AFN system work goes little by little

Building of the AFN system continues at a pace slower than officials anticipated, said Dick Wanderscheid, interim director. Installations in areas with underground utilities, where lines cannot be strung from power poles, have contributed to the problem.

Work in Quiet Village has been completed, leaving Green Meadows and Millpond Village as the last two large areas remaining. Wanderscheid estimates the system will be 90 percent finished by the end of the year.

System installation in areas with underground utilities could run into July of 2002. AFN plans to prioritize installation in those areas in the coming week.

"They been promising that it was going to be in (since) about a year ago - they keep pushing it back a couple months at a time," said Pinecrest Terrace resident Larry Laitner. "The last I heard maybe (they're) going to do it in the end of November."

Laitner is in one of the areas with underground utilities. He has put off buying a new modem for two years because he wants a fiber cable version.

Hunter Communication of Central Point is installing the system.

Wanderscheid says AFN is in a good position to hook up returning Southern Oregon University students this fall.

"I think there's a good chance that a large part of the business plan will get rewritten," said Russ Silbiger, a member of an AFN advisory committee charged to keep the City Council updated on the operation and to revise the plan if needed.

Silbiger served on the city budget committee that called for greater oversight of AFN after it learned the operation would need $4.5 million in loans from other city departments for the current fiscal year.

AFN was launched by the city in 1999 to provide high speed Internet access, cable TV and other telecommunication alternatives. Delays in building the system and competition from Charter Communication resulted in fewer subscribers, forcing AFN to borrow more money than anticipated when original projections were not met.

Preliminary figures from the end of June show AFN with 1,403 Internet connection customers, 17 percent below the projected 1,693. Cable TV hookups were at 1,483 customers, slightly above the 1,460 projected. A Finance Department overview that the City Council will receive before tonight's meeting projects 2,860 cable hookups and 3,319 Internet users by June 30 next year.

Silbiger says 2,300 Internet customers might be a more realistic goal.

"We haven't discussed the actual (business plan) changes," said Silbiger. "From my view this next meeting (to be held today) is when we will really get started."

Silbiger says the potential to succeed is there, but a person with the skills and background to mange the department is needed. Peter Lovrovich, former director of AFN and the city's electric department and computer services, resigned in May.

Silbiger would like to have a person dedicated exclusively to running the Ashland Fiber Network, rather than all three operations. A deadline to apply for the combined position has passed.

A larger sales staff is also needed, Silbiger said.

Mayor Alan DeBoer, who also sits on the committee, wants to boost AFN marketing efforts.

Borrowing money from other departments is necessary to build the system, said DeBoer. Both he and Finance Director Lee Tuneberg said the departments earn better interest by making loans to AFN than through other options.

Ashland's budget projects that AFN will borrow money internally through 2006. The amounts range from $4.9 million in 2003 to $2.2 million in 2006. AFN should have a positive cash flow in 2008, according to Tuneberg. Loans from other departments should be paid off by then. AFN also has a $5.8 million loan for system construction that will be paid of in 2011.

DeBoer says the investment in AFN also will be paid back to the city through economic development.

"I feel infrastructure and a good school system is better than any (tax) incentive," said DeBoer. "Businesses locate here for AFN. I think it's a good investment."

Reach Ashland bureau reporter Tony Boom at 482-4651, or e-mail tboom@mailtribune.com


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