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Fiber network numbers soft in first quarter By Sean Wolfe Ashland Daily Tidings Internal cost-cutting made up for softer earnings in the municipally owned Ashland Fiber Network's first quarter. By and large, the network is making the numbers projected by its business plan. AFN has managed to hit its targets on its number of cable and residential Internet connections throughout the city, but its high speed data customers are in decline, thanks to the pop of the dotcom bubble. According to the city's Electric and Telecommunications Director Dick Wanderscheid, while the service is losing money, it's also reducing costs. "Our business plan assumed a rate increase with data services, but the market for bandwidth is such that we can't increase rates. People can buy (Internet) bandwidth pretty cheap right now. Also we lost some customers. Some went out of business, some left town. It's part of what's going on in the world of dotcoms," Wanderscheid said. Revenues since last July have been markedly soft, missing all but one monthly target through December. On average, AFN brought in $156,829 per month over the past six months. By June 2003, AFN needs to bring in $203,979 per month to hit its steadily escalating revenue goals. At the same time, the service has managed to drop its expenses. Capped at $282,077 a month, the network overspent last year in August through October. But by November, the networks expenses dropped under the cap at $281,761, and in December expenses began to fall more sharply to $260,372. Another area of concern are the networks number of bulk cable television contracts. Since last June, the number of contracts - typically sold to hotels - have remained flat at 139 customers. "The problem is that most hotels already out there have long-term contracts with the incumbent cable company (Charter Communications). All of our contracts are with new hotels. We're in Ashland Springs Hotel, and all the new ones," Wanderscheid said. While these make the target projected by AFN's business plan, the network could safely not sell another bulk service contract until next year, and still make its projections. Nonetheless, Wanderscheid resists criticism that the business plan's targets are not ambitious enough, despite the trend in high-tech industry to update business plans frequently, and sometimes more than once a year. "We wanted to be as conservative in our business plan as possible. Whether it's aggressive enough or not is somewhat relative. We look at the targets, and we hope to exceed those targets. But there was a lot of concern in the advisory committee to make realistic targets, without being overly optimistic. And that plays into the whole issue of revenues versus expenses. Our data revenues are down, but because we've run a tight ship, our revenues are down less than our expenses," Wanderscheid said. "We haven't discussed updating our business plan. The City Council knows the consequences of the old business plan, and there's no discussion of updating it at this point," Wanderscheid said. LINKS: DAILY TIDINGS: Main | News | Sports | Business | Obituaries | Opinion | Columnists | AP News | Subscribe | Archives | Weather | Classifieds | Contact Us | Privacy REVELS: Main | Calendar | Dining | Movies | T.V. OTHER: Road Cams Copyright 2003 Ashland Daily Tidings 541.482.3456. 1661 Siskiyou Blvd., Ashland, OR 97520. Ottaway Newspapers, Inc. - Advertisers -