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- Subscribe - Contact Us - Rate Card - Place an Ad Archives Revels Classifieds Real Estate Guide Weather Subscribe Contact Us December 18, 2004 AFN rate increase questioned By Vickie Aldous Ashland Daily Tidings Ashland Fiber Network officials are proposing increased cable television and Internet rates that would take effect in January. The Ashland City Council will decide on whether to boost rates at a meeting at 7 p.m. on Tuesday in the Ashland Civic Center Council Chambers, 1175 E. Main St. Cable television package rates would increase between 5 and 9 percent. Wholesale rates for residential Internet service would rise by $3 per month and business Internet rates would increase by $3.50. But AFN officials believe customers may see more of an increase as local Internet service providers, or ISPs, increase their retail rates by $4 to $6 per month, according to a memo to the council. Mixed views The rate increase proposal has drawn mixed reactions from the Internet service providers who sell AFN's wholesale services to the public. "It is the second significant rate increase in a relatively short time," said Jeffnet Associate Director Paul Westhelle, referring to a previous increase earlier this year. "We are concerned about it. The rate increases seem to come up with very little process. We don't have much dialogue with AFN about expense items or if there's a meaningful way to run things more efficiently." The latest increase, if adopted, would be the fourth since AFN began operations in 2000, according to city staff. Jeffnet will pass on the price increases. The nonprofit Internet service provider, which contributes its excess revenues to help support Jefferson Public Radio, has little margin to absorb the increases and still contribute to the public radio station, according to Westhelle. But Alan Oppenheimer, president and founder of Open Door Networks, said the Internet price increase is probably overdue. Rates in Ashland are below the national average, he said. "I think it's good. It's the right thing to do. It's very, very important for AFN to be self-supporting if at all possible," he said. "There's no question that AFN has been underpriced." Competition dampens prices The new rates would make AFN cable television comparable in price to the cable television provided by the company Charter Communications. AFN's Tier 3 cable television package would cost $34.83 per month, the same as Charter's Expanded Basic package, according to city staff. Charter charges Talent customers $44.95 for Expanded Basic in that town where there is no competition from a city-owned provider, city staff said. Retail rates for AFN Internet service would range between $35 and $45 a month with the increase. Charter charges between $29.95 and $39.95 for similar Internet service, with the lower rate going to customers who also buy cable television, according to city staff. Qwest offers DSL service for $26.95 for the first three months and $29.99 thereafter, city staff said. Oppenheimer said even with AFN price increases, customers of both AFN and Charter are saving significant sums of money because of the lower prices caused by competition. "We save millions and millions of dollars in direct costs on TV and Internet," he said. However, Oppenheimer said this might be the last rate increase that AFN could adopt. "There really is not room for further rate increases other than for inflation," he said. Instead, AFN must continue to seek new revenue sources by taking steps such as offering new products and expanding outside the city limits, Oppenheimer said. Debt payment looms AFN is raising rates to pay for increased staff and rising costs for cable television programming, employee health insurance, equipment and other items, according to Dick Wanderscheid, head of AFN and the city of Ashland's electric department. AFN also must set aside money to pay its debts. Last spring, Navigant Consulting recommended AFN increase rates, offer new products and boost marketing efforts in order to meet its financial obligations. The city refinanced AFN's debt in August and must make a debt payment of $802,021 in July 2005. To meet that goal, AFN must earn $1.15 for every dollar it spends. During the first quarter of the fiscal year, which began in July, expenses exceeded revenues by $2,891. Because of that first quarter shortfall, AFN must earn $1.23 for each dollar it spends for the rest of the fiscal year in order to save enough money to make the debt payment, according to the most recent AFN Quarterly Report, which was issued in November. The AFN price increase will generate an additional $208,000, according to city staff. Gary McDonald, general manager for Charter Communications' Medford office, could not be reached for comment on whether the cable company would raise its rates in reaction to an AFN price increase. DailyTidings.com Home Page Archives | Revels | Classifieds | Real Estate Guide | Weather | Subscribe | Contact Us Copyright 2005 Ashland Daily Tidings and Ottaway Newspapers All Rights Reserved Slippers Isotoner Slippers Dsw Shoes Ceramic Piggy Banks Fanny Mae Eloans Calenders 2005 Calender 2005 Accelerate Weight Loss Programs Citibank Student Loans Acs Loan Matchmaking & Dating Scripts Adventure Travel Conference Calls - $50/Month Security Systems student loan consolidation helzberg diamonds Click Here Site Search: .:Advertisements:. RESOURCES - Mail Tribune News - ODOT Road Cams