December 21, 2005

JPR offers to run AFN

Foundation already has ties with network, would still use ISPs

By Vickie Aldous
Ashland Daily Tidings

Ashland City Councilors Russ Silbiger, left, and David Chapman discuss the future of the Ashland Fiber Network at Tuesday night’s city council meeting.

An organization familiar to many locals emerged Tuesday night as a potential savior of Ashland’s troubled fiber network.

Jefferson Public Radio Foundation Executive Director Ron Kramer said the nonprofit foundation is interested in assuming control over AFN, the city’s cable television and high-speed Internet service. That scenario could fit under the spin-off option being considered for AFN.

“We believe we have the capability to step forward and help the city,” Kramer told council members.

He said JPR representatives have been meeting with city staff to understand AFN’s financial situation.

Kramer said JPR control over AFN would ensure local control and ownership. JPR has existed in the community for 31 years and already operates telecommunications services, he said.

JPR is involved with AFN through Jeffnet, an arm of the nonprofit that retails AFN’s wholesale Internet services. If JPR took over AFN, the other local Internet service providers that sell AFN services could continue operations, he said.

Kramer said JPR proposes paying the city at least $326,000 a year to help pay off a portion of AFN’s $15.5 million, 20-year debt.

AFN’s yearly debt payments will rise and stabilize at about $1.4 million after several years, when interest plus principal payments are made. The city is making interest-only payments until July 2007.

Unlike the city, which must comply with public meeting and records laws, JPR would not have to conduct AFN’s business operations in the public eye where competitors could see AFN plans, Kramer said.

He said he does not think taking over AFN would put JPR’s finances in jeopardy.

“If we thought this was a serious risk to our radio operation, we wouldn’t do it,” he said. “The business is not a huge money-maker, but we think we could do it in a way that would be financially stable.”

He said JPR could promote AFN on the air, saving on marketing costs. Still to be discussed would be whether JPR would take over both the television and Internet operations of AFN.

Earlier this year, the city council established an AFN Options Committee made up of business and high-tech experts to research options for the future of AFN. After three months of extensive research, the committee recommended in November that the city work on both selling AFN and spinning it off.

Having a spin-off option in place could help the city get a higher price if the council did decide to sell AFN because buyers would know selling wasn’t the only option. Spinning off AFN could have its own advantages, such as maintaining local control, but entails more financial risk than a sale, the committee reported.

The committee also expressed interest in a “common carrier” approach in which businesses would pay to offer their own services over AFN’s infrastructure.

The options committee estimated the city could sell AFN for $5 million to $10 million, not enough to cover the debt. If a nonprofit assumed control of AFN, the committee recommended it assume $6.5 million of the debt since it likely could not survive saddled with the full debt load.

Staff writer Vickie Aldous can be reached at 479-8199 or valdous@yahoo.com.