The Ashland Fiber Network’s leader wants the businesses that retail the network’s Internet service to aggressively go after new customers. If those businesses don’t produce results, AFN will begin marketing itself as a direct Internet retailer, said Ashland Information Technology Director Joe Franell.
“If I saw active, aggressive customer acquisition plans from the Internet Service Providers, I wouldn’t suggest that AFN do retail,” he said.
AFN now operates mainly as an Internet wholesaler, although it does have about 75 retail customers, he said.
Franell said aggressive marketing could help the ISPs and AFN win 10 to 15 percent more of the market share.
They could convert Charter Communications and Qwest customers to AFN, while also convincing people who use slower dial-up and DSL service to switch to AFN high-speed service.
The push to get AFN’s Internet retailers to launch a marketing campaign is part of a new five-year business plan for the city-owned enterprise. The plan was prepared by AFN and finance department staff and unanimously approved by the Ashland City Council Wednesday afternoon.
Alan Oppenheimer, president of the ISP Open Door Networks, said the ISPs, AFN and the residents of Ashland will all benefit from Franell’s efforts to get the ISPs to seek more customers.
“He’s 100 percent correct to be pushing the issue of aggressive marketing,” Oppenheimer said. “He’s using a carrot and stick approach. The carrot is if you market more aggressively, you get more customers and make more money. The stick is if you don’t get your act together, we’ll do it.”
Jeff Rhoden, co-owner of the ISP InfoStructure, said Franell has been looking for ways to add customers, but until now, has not tried to set benchmarks for the ISPs to win customers or face competition from AFN as a retailer. He said Franell’s plan to approach the ISPs first about marketing is the right approach.
“What’s good for AFN is good for the ISPs. I think Joe believes that and wants to keep the partnerships with the ISPs,” he said.
Rhoden said even if AFN became a retailer, he doesn’t believe Franell would try to undercut the ISPs. Franell said AFN would retail its Internet service at about the price level charged by ISPs. For the average home user, AFN charges a wholesale rate of $26 per month. The retail price is about $35 to $39 per month after the ISPs add on charges, he said.
In the business plan, Franell predicted AFN would gross $109,601 in the next fiscal year if it marketed itself as an Internet retailer. He said he would not hire new workers to handle the added customers because the city’s recent melding of AFN and computer services staff has produced efficiencies.
Hired in early 2006, Franell already has reversed AFN’s long history of operational losses.
AFN made money from the start of the current fiscal year in July 2006 though December 2006. AFN was ahead on operations by $194,708, according to figures in the business plan.
Franell spun off the money-losing cable television service to Ashland Home Net, a local business.
“In large part, that’s what’s stopped the bleeding,” he said.
Residents stayed loyal to the locally-provided cable television service after it was taken over by Ashland Home Net. That helped AFN retain Internet customers who might have switched providers when they signed up for Charter cable television, Franell said.
The business plan predicts that net operational revenues will continue to rise, reaching $401,548 for the 2011/12 fiscal year.
After making long-neglected repairs and upgrades to AFN’s infrastructure next fiscal year, the Ashland City Council could choose to use the money to help pay AFN’s $15.5 million debt or for other priorities, Franell said.
Staff writer Vickie Aldous can be reached at 479-8199 or email@example.com.