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AFN: not for sale

ASHLAND ' A majority on the City Council don't believe the sale of the city's Ashland Fiber Network a viable option. At least three council members favor keeping AFN and its Internet service, while allowing private businesses to provide service over the city's fiber-optic infrastructure.

That option is called the open carrier model because it opens up the use of AFN's infrastructure to outside businesses.

Council members David Chapman, Russ Silbiger and Cate Hartzell, along with Ashland Internet and software company owner Alan Oppenheimer, have been working out details of the open carrier model.

We are convinced that this direction is sound and are confident that it is the best direction to take on behalf of our residents, the four said in a memo to fellow councilors.

The council will discuss whether to pursue the open carrier model, a sale of AFN or spinning it off as a nonprofit during a meeting that begins 7 p.m. Tuesday in the Ashland Civic Center Council Chambers, 1175 E. Main St. AFN is mired in debt and can't pay it off with the current rate structure it has to maintain to keep in competition with Charter Communications.

— Chapman said this weekend that he is unlikely to vote for selling AFN.

It would take a very strong suitor with a lot of money to change my mind that it would be worth selling to someone, he said.

Their group says their plan has many advantages. The city would get out of the tumultuous cable television business, which faces rising costs for the right to broadcast channels and requires major ongoing capital investment, the memo states.

But the city has made money on the Internet side and would continue providing that service, according to the memo.

Most households would pay a monthly amount to the city and, in return, receive base-level Internet access along with network and government television channels.

Low-income residents could be exempt from the fee, under the proposal.

The basic idea is that, Everyone pays something; everyone gets something, the memo states.

Users who want higher levels of Internet service could pay more to Internet Service Providers. Those who wanted more television channels could pay more to third-party cable providers providers as well.

Silbiger said households might pay as little as &

36;10 per month for the basic Internet and television service or as much as &

36;20. That upper amount would help pay off AFN's &

36;15.5 million debt, he said.

Private businesses could provide telephone and other emerging services over AFN's infrastructure, according to Chapman.

The nonprofit Jefferson Public Radio Foundation has offered to take over AFN, while other potential corporate suitors have backed off.

Vickie Aldous is a reporter for the Ashland Daily Tidings. Reach her at 482-3456.

New AFN head:

ASHLAND ' The city attorney's brother has been named to head the troubled Ashland Fiber Network.

Joseph Franell, brother of City Attorney Mike Franell, was appointed by Mayor John Morrison, who appoints city department heads, and Ashland Finance Director Lee Tuneberg, who coordinated the candidate search, have recommended that Franell be appointed to the post. The City Council is expected to confirm the appointment at tonight's meeting.

Joseph Franell lives in Florida where he works for a telecommunications company that offers telephone, cable television and Internet service in the southeast.

In a memo to the council, Tuneberg noted that more than 60 people applied for the position of Information Technology Director. The person will lead AFN and manage the city's internal computer systems.

Joseph Franell excelled in both interview panels and individual meetings with top management, Tuneberg wrote. Franell comes well recommended by managers, peers and subordinates.

AFN debt options:

ASHLAND ' The City Council will examine a number of options for dealing with the Ashland Fiber Network's &

36;15.5 million debt tonight, none of which come without sacrifice.

A sizable portion of the debt is likely to remain under any future scenario for AFN.

Finance Director Lee Tuneberg has created a list of options for paying AFN's 20-year bonds taken out in 2004. Annual debt payments will rise to &

36;1.43 million by 2009 and stabilize at about that amount for subsequent years.

The council imposed a &

36;7.50 monthly fee on all electric customers last year, but following stiff opposition repealed it before it took effect following. Tuneberg said such a fee would have to be &

36;12 or more per month to meet AFN's obligations.

Other options Tuneberg proposed include:

Other departments subsidizing AFN; could result in increased water, sewer or electric bills.

Excusning AFN from paying city administration costs; could lead to possible cuts in services.

Cutting city programs.

Leaving city jobs vacant.

Selling city property.

Raising property taxes (about &

36;148 per year on a &

36;400,000 house could cover a portion of AFN's debt.)

Redirecting city hotel, motel and/or meal meal taxes to cover AFN debt. Would cut city programs and lead to a 50 percent sewer rate increase.

Creating a new tax on gas, retail sales, incomes tax or impose a &

36;1 tax on entertainment tickets.

Capping spending and divert increases in revenue to cover debt.