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- Subscribe - Contact Us - Rate Card - Place an Ad Archives Revels Classifieds Real Estate Menu Guide Wedding Weather Subscribe Contact Us September 8, 2005 Electric and cable rates will rise soon Council approves flat hike of $7.50 a month for electric fees By Vickie Aldous Ashland Daily Tidings Residents who buy the Ashland Fiber Network’s most popular cable television package will pay $7.12 more per month and all city electric customers will pay an additional $7.50 per month as the Ashland City Council moves to close AFN’s financial shortfalls. The council voted 4-1 on Wednesday to increase cable television rates as of January 2006 and to add the fee to electric bills beginning this October. Councilor Jack Hardesty was absent and Mayor John Morrison votes only in case of a tie. The changes will generate an estimated $700,000 by the end of June 2006, which marks the close of the city’s 2005-2006 fiscal year. The added amount needed to cover AFN’s budget shortfall for that time is $738,000, according to Ashland Finance Director Lee Tuneberg. Despite the coming cable television rate increases, AFN’s prices will still be below market rates elsewhere, according to Councilor Russ Silbiger. AFN and Charter Communications, the city service’s business rival, have been locked in fierce competition and both charge less for cable television packages in Ashland than Charter charges in other Rogue Valley communities that lack municipally provided cable television. The monthly cost of AFN’s popular Expanded Basic cable package will rise from $34.83 to $41.95 in January, still lower than the estimated national average of $48, according to city figures. However, electric customers may wonder about the fairness of being charged to subsidize AFN, especially when electric customers in some pockets of the city are still not able to buy AFN cable television or Internet services. Silbiger said hiking cable television prices high enough to cover AFN’s deficits would drive customers away. Revenues would fall but the city would still have to cover AFN’s operational costs and make payments on its $15.5 million loan. “At some point we have to bite the bullet,” he said. “We definitely don’t want to have AFN to subsidize television. We’re moving toward a market rate model.” AFN has 3,170 cable television customers, according to the most recent AFN Quarterly Report that covers the period through June 30. The city has approximately 10,000 electric customers, who together will pay an additional $75,000 per month once the AFN fee is added to their bills. If that added revenue had to be generated solely by cable television customers, the average cable customer would pay an additional $23.66 per month, according to Tidings calculations. The price of the Expanded Basic cable television package — with that amount and the planned $7.12 January increase — would therefore have to cost $65.61 per month, much higher than the national market rate of $48, according to Tidings calculations. AFN’s Internet service already is at market rates and there is little room to raise fees there, according to city staff. Councilor Alex Amarotico was the one councilor who voted against the price and fee changes. He said there wasn’t enough data yet to make a decision and he would have preferred to see an electric fee increase that was a percentage of a user’s electric bill. Businesses such as his own Standing Stone Brewing Co. would then pay a higher fee and residents with low bills would pay less, he noted. “That’s fine. AFN is a benefit to all businesses in Ashland, I believe,” Amarotico said. But Silbiger said using a percentage of electric bills would have been complicated and raised many questions, such as how to account for low income people who use a lot of electricity because their homes lack insulation and efficient heating systems. The added AFN fee on electric bills will appear as a separate line item so that it will be clearly visible, according to the council decision. The electric fee will be added next month to begin generating revenues, but the council did not want to raise cable television prices in the fall when Southern Oregon University students and others typically sign up for cable. Rates for premium channels like HBO were not raised because those prices are already high, Silbiger said. Staff writer Vickie Aldous can be reached at 482-3456 x. 3018 or [email protected]. 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