Monthly Archives: September 2003

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Ashland is looking to hire a consultant to help rescue the city’s debt-ridden fiber network.

“It’s time to bring someone in with industry experience to overlook and see what we’re doing,” Wanderscheid said. “It’s a reality check on our assumptions to see if they’re reasonable.”

Since the beginning, AFN has fallen short of all predictions of profitability and has been mired in increasing debt. The debt – from interfund and capital loans – is forecasted to grow to about $14 million by next summer.

Four years after Ashland’s first technology assessment, Ashland Fiber Network is far from reaching its goals. When construction of the new system was just beginning, the City was worried that there would not be sufficient demand for the network to generate the necessary revenues to meet its goals.

In 1999, the City Administrator wrote a report on the assessment and presented it to the City Council. The report was also circulated to workshop participants and the Chamber of Commerce. The workshop revealed that the infrastructure was good, and when the Ashland Fiber Network came on-line, the infrastructure would be exceptional. But the use of the network was lagging.

Consultants for The Communication Group used existing research to develop an 18-month launch campaign for the new AFN municipal services. The report also proposed various improvements in the area of marketing. Specifically, the report called for implementing a direct sales team, revising the pricing structure, developing targeted marketing campaigns, promoting bundled cable TV and Internet packages, and marketing the advantages of a publicly owned advanced telecommunications network. Despite a one-year delay and intense price competition, the results were successful. High-speed data and Internet hook-ups exceeded goals.

In April 2002, AFN was forced to revise its business plan due to several issues: revenues were not meeting projections, capital expenditures were exceeding the amount originally financed, the buildout was taking longer than anticipated, and some managerial problems were identified.

An advisory committee was appointed to (1) revise the business plan, (2) develop a communication system with the council, and (3) evaluate ways to enhance the network’s performance.

In January, 2003 conerns were raised about whether the city council received accurate information. Auditor’s hadn’t reported on the “going concern” of AFN. The committee requested the auditors’ determine whether it is in their scope to do a “going concern” review of AFN. Apparently, a management audit or review of the business plan was not within the purview of the Committee.

It is crucial for AFN to increase the number of users to the network if it hopes to build value into the network. Real sustainable economic growth and security will come from expanding the information revolution to all parts of society. It is the creation of quality content that drives growth.
.
Unfortunately current business plan focusing primarily on revenue generation and little emphasis placed on creating quality content or usability. Furthermore, AFN has yet to finance the support staff, education and outreach programs that allows the community greater access .

Finding a local ISP that can meet users needs can prove challenging. Ashland fiber will not work with large providers such as AOL. Charter’s network, on the other hand, allows AOL access over their networks, and at greatly reduced prices.

When a local private school wanted to install a fiber network the prices quoted from the local ISP’s almost stopped the project. Not only were the setup costs extravagant, but the monthly charges were less than competitive. Throw in a charge for a pipeline and the price for AFN could cost over $395 a month and more than $1000 to set-up..

In contrast, Charter Cable offered their services for much less cost. Charter did it all for $100 and with a monthly charge of $59 with free TV and 10 emails. Another benefit to the school is that Charter supports AOL. Their cost for AOL dropped from $35 to $7.95 month as they no longer needed the dial up. And as an added bonus Charter wired and setup the building for them.

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106418918540987127

Ashland is looking to hire a consultant to help rescue the city’s debt-ridden fiber network.

“It’s time to bring someone in with industry experience to overlook and see what we’re doing,” Wanderscheid said. “It’s a reality check on our assumptions to see if they’re reasonable.”

Since the beginning, AFN has fallen short of all predictions of profitability and has been mired in increasing debt. The debt – from interfund and capital loans – is forecasted to grow to about $14 million by next summer.

Four years after Ashland’s first technology assessment, Ashland Fiber Network is far from reaching its goals. When construction of the new system was just beginning, the City was worried that there would not be sufficient demand for the network to generate the necessary revenues to meet its goals.

In 1999, the City Administrator wrote a report on the assessment and presented it to the City Council. The report was also circulated to workshop participants and the Chamber of Commerce. The workshop revealed that the infrastructure was good, and when the Ashland Fiber Network came on-line, the infrastructure would be exceptional. But the use of the network was lagging.

Consultants for The Communication Group used existing research to develop an 18-month launch campaign for the new AFN municipal services. The report also proposed various improvements in the area of marketing. Specifically, the report called for implementing a direct sales team, revising the pricing structure, developing targeted marketing campaigns, promoting bundled cable TV and Internet packages, and marketing the advantages of a publicly owned advanced telecommunications network. Despite a one-year delay and intense price competition, the results were successful. High-speed data and Internet hook-ups exceeded goals.

In April 2002, AFN was forced to revise its business plan due to several issues: revenues were not meeting projections, capital expenditures were exceeding the amount originally financed, the buildout was taking longer than anticipated, and some managerial problems were identified.

An advisory committee was appointed to (1) revise the business plan, (2) develop a communication system with the council, and (3) evaluate ways to enhance the network’s performance.

In January, 2003 conerns were raised about whether the city council received accurate information. Auditor’s hadn’t reported on the “going concern” of AFN. The committee requested the auditors’ determine whether it is in their scope to do a “going concern” review of AFN. Apparently, a management audit or review of the business plan was not within the purview of the Committee.

It is crucial for AFN to increase the number of users to the network if it hopes to build value into the network. Real sustainable economic growth and security will come from expanding the information revolution to all parts of society. It is the creation of quality content that drives growth.
.
Unfortunately current business plan focusing primarily on revenue generation and little emphasis placed on creating quality content or usability. Furthermore, AFN has yet to finance the support staff, education and outreach programs that allows the community greater access .

Finding a local ISP that can meet users needs can prove challenging. Ashland fiber will not work with large providers such as AOL. Charter’s network, on the other hand, allows AOL access over their networks, and at greatly reduced prices.

When a local private school wanted to install a fiber network the prices quoted from the local ISP’s almost stopped the project. Not only were the setup costs extravagant, but the monthly charges were less than competitive. Throw in a charge for a pipeline and the price for AFN could cost over $395 a month and more than $1000 to set-up..

In contrast, Charter Cable offered their services for much less cost. Charter did it all for $100 and with a monthly charge of $59 with free TV and 10 emails. Another benefit to the school is that Charter supports AOL. Their cost for AOL dropped from $35 to $7.95 month as they no longer needed the dial up. And as an added bonus Charter wired and setup the building for them.

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Schools’ phone service dies

Umpqua tribe, AFN providing phone service to school district

Could debts, wireless kill AFN? – May 11, 2003

Dot-com decline hurts Ashland Fiber Network – February 1, 2003
Internal cost-cutting made up for soft earnings in city-owned Ashland Fiber Network’s first quarter

Ashland Fiber Network can meet new goals. Still, the Internet and TV service is expected to lose money until 2006-07.

106419116667665803

Schools’ phone service dies

Umpqua tribe, AFN providing phone service to school district

Could debts, wireless kill AFN? – May 11, 2003

Dot-com decline hurts Ashland Fiber Network – February 1, 2003
Internal cost-cutting made up for soft earnings in city-owned Ashland Fiber Network’s first quarter

Ashland Fiber Network can meet new goals. Still, the Internet and TV service is expected to lose money until 2006-07.

106417870895508200

August 1999 Economic Readiness Assessment Report

Original assessment of schools, university, non-profits, hospital, businesses, and arts & entertainment. At the time of the assessment, construction of the new system – the Ashland Fiber Network (AFN) – was just beginning. The City was worried that there would not be sufficient demand for the network to generate the necessary revenues to meet its goals.
The assessment revealed that the infrastructure was good, and when the Ashland Fiber Network came on-line, the infrastructure would be exceptional. But the use of the network was lagging.

Amid telecom ruins, a fortune is buried

Forget dot-coms. The truly excessive over investment of the technology boom was in the Internet’s pipeline, the hair-thin strands of glass that snake across the state and nation, carrying pulses of light that translate into huge volumes of e-mail messages, Web pages and online video

106417870895508200

August 1999 Economic Readiness Assessment Report

Original assessment of schools, university, non-profits, hospital, businesses, and arts & entertainment. At the time of the assessment, construction of the new system – the Ashland Fiber Network (AFN) – was just beginning. The City was worried that there would not be sufficient demand for the network to generate the necessary revenues to meet its goals.
The assessment revealed that the infrastructure was good, and when the Ashland Fiber Network came on-line, the infrastructure would be exceptional. But the use of the network was lagging.

Amid telecom ruins, a fortune is buried

Forget dot-coms. The truly excessive over investment of the technology boom was in the Internet’s pipeline, the hair-thin strands of glass that snake across the state and nation, carrying pulses of light that translate into huge volumes of e-mail messages, Web pages and online video

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Outside help for network

A consultant will be brought in sometime next month to help guide the City of Ashland on the direction of the financially troubled Ashland Fiber Network.

The city plans to have the consultant come to Ashland to thoroughly analyze and give insight on AFN for 12 to 15 weeks, it was announced at Thursday night’s city budget committee meeting.

The hope is to have a completed budget containing suggestions by the consultant presented to the budget committee in March, City Manager Gino Grimaldi said.

“It’s a starting point in how we can improve AFN,” Grimaldi said after the meeting.

Ashland Electric Department Director Dick Wanderscheid said the consultant will give an honest appraisal on the direction and future of AFN.

“It’s time to bring someone in with industry experience to overlook and see what we’re doing,” he said. “It’s a reality check on our assumptions to see if they’re reasonable.”

The consultant will look carefully at the AFN budget and make suggestions, including how to market and manage AFN more efficiently. New networking services will also be looked at, Wanderscheid said. Possibilities include telephone service, or video on demand for cable customers.

Since the city decided to move ahead with AFN in fiscal year 1998, AFN has not fulfilled early predictions of profitability and has been mired in increasing debt.

The debt – from interfund and capital loans – is forecasted to grow to about $14 million by next summer.

The city sent inquires to 35 consulting firms in early August, Wanderscheid said. Four consultants have shown interest. The city hopes to have a consultant here in 2 to 4 weeks.

The consultant’s fee has not been determined, but is estimated to be in the $25,000 to $50,000 range, Wanderscheid said.

Ashland mayor and budget committee member Alan DeBoer said after the meeting it’s important to have an consultant come in to insure the fiber network is a success.

“AFN is here to stay,” he said. “The city has a huge investment and we need it to succeed. It’s a great service.”

Committee member John Morrison said he liked the idea of hiring a consultant.

“Get an consultant. Get an extra mind,” he said at the meeting. “Get someone in here to give us the guidance we need.”

At the meeting, city staff gave committee members possible future figures for the cost to customers of AFN Internet and cable access.

This included a projection of the cost of Internet residential direct connections increasing substantially each year. The figures start at $21.35 a month for fiscal year 2003-2004, and rise steadily, reaching $34.97 a month for fiscal year 2007-2008.

Some committee members voiced concerns about the high rates.

“It sound like a lot to me,” Committee member Dave Williams said. “Are we going to charge that much of an increase?”

City staff explained the figures were just an “best guess” of what could happen with cost for services.

“It’s not a prediction, but shows one possible future that could happen,” Wanderscheid said.

City staff also presented to committee members what AFN has done in terms of marketing and other revenue enhancement activities since the beginning of the fiscal year to improve the bottom line.

This included:

o starting a new AFN campaign based around the use of personal testimonials;

o adding an additional outside sales person;

o and adding a temporary AFN installer to help with the return of Southern Oregon University students.