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Ashland to keep AFN

The Ashland City Council plans to keep the Ashland Fiber Network and have all households, except those that are low income, pay $10 to $21 a month in return for basic Internet and television service.

The city would also allow outside businesses to provide telecommunications services over AFN&

s infrastructure, which could bring in additional money and give residents access to emerging technologies without the city having to pour money into capital upgrades.

The entire concept is known as the open carrier model.

Residents who want more than basic Internet could buy extra services, such as technical support and computer virus protection, from the existing Internet Service Providers that already retail AFN&

s wholesale Internet service. Those who want more than network and government access television channels could buy more from cable television or satellite providers.

Although those basic channels are technically free, many residents cannot get good reception and buy service from AFN, Charter Communications or satellite providers in order to watch television.

Essentially, the city would stay in the Internet business, which has operated successfully, while getting out of the cable television business, where AFN has been losing money, according to Councilor Russ Silbiger, who helped craft the plan with Councilors David Chapman and Cate Hartzell, along with Alan Oppenheimer, who owns a local company that retails AFN&

s Internet service.

On Tuesday night, councilors voted 5-1 in favor of a motion that stated the council&

s intent is to implement the open carrier model. They directed city staff to work with the plan&

s drafters to work out details, including financial figures and legal aspects.

Silbiger said the city could cover AFN&

s $900,000 in yearly operating expenses and debt payments of $1.4 million if most of the city&

s 10,000 electricity customers paid $21 a month.

AFN&

s payments on it&

s 20-year, $15.5 million debt are not yet $1.4 million each year, but they will rise to that amount and then plateau in 2009.

Silbiger assumed that 1,000 households would receive the low-income exemption and another 1,000 households could not be reached by existing AFN infrastructure.

He acknowledged that it might be difficult to convince residents to pay $21 a month, but a lower figure of $10 per month for residences and $20 a month for businesses might be more palatable and would help pay the debt.

Silbiger noted that in 2005, the council adopted and then rescinded a plan to help pay AFN&

s debt that required electricity customers to pay $7.50 each month &

and the city was not offering basic Internet and television to everyone.

&

Previously, we were going to charge you $7.50 and not give you anything for it,&

he said.

Several residents came to the meeting to speak in favor of the open carrier model.

Lenny Neimark said he would gladly pay $21 a month for basic Internet and television service, especially knowing that AFN&

s debt was being paid off. But like a few others who spoke, he said the open carrier model is confusing.

&

To sell that concept, you need to simplify the language,&

he said.

Resident John Gaffey, who is circulating a petition that would allow voters to decide whether the city should be in the telecommunications business, questioned whether businesses would really step forward and pay to use AFN&

s infrastructure.

Councilor Kate Jackson, who voted against the motion to pursue the open carrier model, said she needs to see more financial figures for the plan.

Councilor Jack Hardesty, who did vote for the motion, said he wants the issue to go before voters. Silbiger said he supports that as well.

City Administrator Gino Grimaldi said city staff will work to implement the plan and will come back to the city council if they run into legal problems or other difficulties.

The newly hired AFN leader, Joseph Franell, also will be asked to review the plan, Grimaldi said.

The council had considered whether to adopt the open carrier plan, sell AFN, spin it off under a newly formed nonprofit organization or accept a Jefferson Public Radio Foundation offer to take over the enterprise.

Grimaldi said city staff had discussed a sale of AFN with a broker, who estimated AFN could be sold for $7 to $10 million.

Before the council vote, JPR Foundation Executive Director Ron Kramer said the nonprofit needs an expression of interest from the council before JPR officials continue investing time and energy in discussing a possible foundation take-over with city staff.

&

If the city wants to pursue other opportunities, that&

s fine, too,&

he said.

JPR Foundation officials had hoped to earn enough from AFN to supplement JPR operations while paying a sum each year to the city to help pay a part of AFN&

s debt.

For more details on the open carrier plan, visit the city&

s Web site at www.ashland.or.us. Click on &

Council business&

in the left column. Then click on the March 7 council packet and go to &

AFN Options.&

The council was scheduled to discuss long-term methods for paying AFN&

s debt on Tuesday night, but more research is needed into how the open carrier model could address debt issues.

Staff writer can be reached at 479-8199 or vlaldous@yahoo.com