AFN adds customers in spite of recession

The Ashland Fiber Network has managed to add more Internet customers despite the recession.

In 2007, the city-owned Internet service had 3,971 active modems at the end of June, when the city's fiscal year closes.

Numbers increased to 4,083 active modems at the end of June 2008, and rose still further to 4,128 active modems at the end of June this year, according to figures provided by interim Information Technology Director Michael Ainsworth.

Ainsworth said in the face of falling retail activity across the country, he's proud of the AFN team's achievement.

AFN wholesales Internet service to other companies and nonprofits — known as Internet Service Providers, or ISPs — that then retail Internet service directly to customers.

"Due to the stellar efforts of AFN staff and our retailer ISP partners, collectively we were able to grow our cable modem customer base during the worst economic downturn in recent U.S. history," Ainsworth said.

Customers appear to view high-speed Internet service as a necessity, he said.

With nearly $1.5 million in revenues, AFN ended its fiscal year at 106 percent of revenue projections, he said.

The recession did appear to affect AFN's more costly service that extends fiber optic cables directly to businesses to give them greater bandwidth.

But that service still brought in $192,114 to meet 97 percent of its revenue projections, Ainsworth said.

"Our business customers in Ashland with direct fiber service have national and global presence and are in a better position to ride out the economic rollercoaster. In general, the majority of Internet-based businesses enjoy lower overhead expenses than typical brick-and-mortar businesses and this helps them adjust to the recession as well — which is great news to everyone, including AFN," he said.

Ainsworth predicted AFN will increase its revenues by 5 percent this fiscal year.

Financial news about AFN hasn't always been so rosy.

The city of Ashland began building AFN as an Internet and cable television service in the 1990s, but it accumulated $15.5 million in debt due to higher than expected costs and stiff competition from Charter Communications.

Joe Franell was hired from the private sector in 2006 to become AFN's first director. He privatized the money-losing cable television business and AFN was able to begin helping with its debt payments.

AFN is supposed to pay $356,000 toward a $1.4 million debt payment for this fiscal year. Other city departments, ranging from the Electric Department to Ashland Fire & Rescue, have had to help shoulder the debt burden, as have Ashland residents who pay higher property taxes because of the debt.

Franell left Ashland to take a new job in October 2008. Since then, Ainsworth has been working at both his own job as AFN operations manager and Franell's old job as the city's information technology director. The IT director oversees AFN and the staff members who handle the city's internal computer systems.

In August, the Ashland City Council agreed to spend $25,000 for an outside firm to recruit candidates for the IT director job, as well as screen the applicants, produce detailed reports on finalists and conduct background checks. The salary range for the job when it was held by Franell was $90,591 to $101,824, Ashland Human Resources Director Tina Gray said.

Some councilors were dissatisfied with an AFN business plan that Ainsworth presented to the council in March, believing that the plan was not aggressive enough about adding new customers.

Ainsworth said he presented an honest financial picture of AFN that was not sugar-coated.

In years past, AFN had trouble meeting overly optimistic business plans.

Despite some councilors' concern that the business plan was not aggressive enough, Ainsworth's plan projects that AFN can add regular wired Internet customers while also adding wireless Internet customers. It assumes that many people will choose both services rather than giving up wired service when they buy wireless Internet.

Ainsworth said he plans to apply for the IT director position.

If the city hires an outside person to head AFN, that person should look at whether AFN is appropriately staffed, City Councilor Russ Silbiger and City Administrator Martha Bennett have said.

When AFN privatized its cable television service, it lost one position. However, AFN staff members still perform the installation work for both cable television service and Internet. AFN is compensated by the company that owns the cable television service for that television work, Ainsworth said.

That ensures that all the work on the network is done correctly so people have high quality service, he said.

AFN staff responded to 4,304 requests for services during the fiscal year that closed in June, up 18 percent from the previous year. Staff members maintain the system's complicated infrastructure — which includes 121 miles of network outside the main headquarters — and are available even in the middle of the night to preserve services in case of wind storms and heavy snowfall, Ainsworth said.

Staff writer Vickie Aldous can be reached at 479-8199 or

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