| As part of the work done by the AFN Advisory Committee,
a quarterly report format was developed. The first report was completed in
November 2001. While we continue to exceed Business Plan projections for
Residential CATV, Residential Cable Modems and Bulk CATV accounts, the High
Speed Data Accounts are not keeping with plan targets and are declining.
The worldwide high tech recessions has also effected Ashland and at last
count over 13 businesses that were high speed data customers of AFN have
either totally ceased to exist or have closed their Ashland operation.
In a positive note, AFN in conjunction with RIO communications will
be providing voice over IP dial tone to the Ashland School District beginning
in July 2003.
RIO will utilize AFN's network to provide this service to all of
the School District Facilities. They were the successful bidders submitting
the lowest cost proposal to the School District as part of the District's
RFP process.
While this won't result in a lot of revenue to AFN, we will incur
no costs in providing this service. The main beneficiary will be the School
District which estimates saving of about $30,000 over 3 years because of
the arrangement.
Actual expenses are exceeding plan projections primarily due to paying
about $95,000 in outstanding bandwidth bills from the previous fiscal year.
This occurred because of a dispute with our primary bandwidth provider over
AFN's inability to change to a different type of service. Because they failed
to respond to numerous inquiries from us concerning this, we with held part
of payments until they responded to our request. These bills were later paid
in September causing the large increase in expense. Because we took credit
for having lower expenses last year it is appropriate to claim the expense
this fiscal year.
The City's last revision of the AFN business plan occurred in fall
of 2001. We now have almost 2 full additional years of data that can be used
to update this plan. We plan to update the plan this summer when all of the
financial data is available from FY 02-02. This update should be able to
provide the council with the tools necessary to judge the long-term financial
health of AFN and also determine if other steps or initiatives will be necessary
or desirable for the future success of AFN. |
