The Ashland Fiber Network plans to increase Internet speeds on May 1 without raising prices after the businesses that retail Internet speed saw a dip in customers.

The Ashland Fiber Network plans to increase Internet speeds on May 1 without raising prices after the businesses that retail Internet speed saw a dip in customers.

Together, AFN's three Internet retail partners lost 52 customers between March 1, 2011, and March 1 of this year, leaving them with 4,175 total customers, Ashland Administrative Services and Finance Director Lee Tuneberg said this week.

While AFN retailers have lost customers, AFN has added customers through direct sales of Internet service.

At the end of June 2011, AFN had 165 direct Internet customers, but boosted that count to 298 customers as of this week, said Ashland Information Technology Manager Michael Ainsworth.

City officials have for years been reluctant to sell Internet service directly to customers because they want to support retailers in the high-tech industry. They have since grown more willing to sell directly to customers.

AFN is on track to meet its Internet revenue target of $1.84 million for this fiscal year, Ainsworth said.

Upgrading AFN's Internet speed will cost less than $40,000, AFN staff members said.

Speeds will go from a maximum of 1,000 megabits per second to 1,500 megabits per second, according to information presented at an Ashland City Council study session earlier this month.

AFN competitor Charter Communications is in the midst of a campaign advertising a boost in Internet speed.

AFN plans to market its Internet speed increases and price freeze to its direct Internet customers.

AFN's Internet service retail partners would like to roll out a promotional pricing marketing campaign this summer.

The retailers have lost customers for a variety of reasons, according to answers customers give when they drop service. Some people moved out of the area, dropped service for the summer, were disconnected for failing to pay their bills or switched to Charter Communications or Dish Network, among other reasons.

Launched in the late 1990s, AFN sank $15.5 million in debt before stabilizing its finances. It kept the revenue-generating Internet side of its operation while spinning off its money-losing cable television service to a private company.

AFN contributed $409,000 toward its debt during the current fiscal year and expects to contribute the same amount next year, Tuneberg said.

The debt payment for the coming fiscal year, which begins July 1, is $1,428,631, he said.

A property tax of 17.5 cents per $1,000 in assessed property value will remain in place to generate additional money for AFN's debt payment, Tuneberg said.

The owner of a home assessed at $250,000 will pay an extra $43.75 in taxes per year to help cover AFN debt.

The final debt payment is scheduled for July 2024, Tuneberg said.

AFN has been without a leader since last summer, when the city's information technology director took a job in another city.

The city's electric department has been without its own director for several years.

City Administrator Dave Kanner told council members earlier this month that he would like to combine the information technology and the electric department directors into one position and recruit a person with marketing and management skills for that post.

That move would save well over $100,000 in salary and benefits.

Several years ago, one person ran both AFN and the electric department. But some community members and city officials thought AFN should have its own leader because the enterprise must operate in a highly competitive industry.

The city created the information technology position, and that person ran AFN and the city's internal computer and technology systems.

Staff reporter Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.