Background:
AFN began service in February 2000. In August 2002, rates were increased
for the first time. Subsequent rate increases were enacted in May 2003 and
June 2004. This proposed increase would be the fourth increase since AFN
began operation.
AFN is incurring increased cost of operating the system. We have added two
additional staff members (1 ½ FTE increase) to provide better service.
We also have higher health insurance, other benefit costs, negotiated cost
of living salary increases, higher CATV programming costs and increased costs
of other material and services. This necessitates an increase in rates to
cover these higher expenses.
The following table illustrates the existing and proposed monthly CATV
rates:
|
Old Rate |
Increase |
New Rate |
| 000000000 |
000000000 |
000000000 |
000000000 |
| Tier 1 |
$8.25 |
$0.79 |
$9.04 |
| Tier 2 |
$13.40 |
$1.00 |
$14.40 |
| Tier 3 |
$33.04 |
$1.78 |
$34.83 |
| Tier 4 |
$44.03 |
$2.92 |
$46.95 |
These fees are inclusive of $.75 PEG that go to RVTV and all franchise fees
which accrue to the City. Premium Packages would increase by 5%.
For comparison, the latest advertised rate by Charter for service that is
comparable to Tier 2 is $14.38. Their expanded basic service in Ashland is
provided at $34.83, which is comparable to our Tier 3 services at $34.83.
AFN will be adding 5 additional channels to the Tier 2 services: CNN En Espanol,
Animal Planet, The Travel Channel MTV, VH-1 and Free Speech TV. Also, one
additional channel (ESPN Classic) will be on the Tier 3 service. This movement
of channels is necessitated by programmer's demand for minimal penetration
levels of viewers.
We also have upgraded our Weather Channel feed to provide Ashland specific
weather forecasts. In addition, all customers that have a set top box will
have a new pay per view service called "In Demand" which will provide 30
channels of pay per view choices for AFN subscribers. We have freed up space
to provide local channel HDTV signals to all our customers and hope to begin
broadcasting these signals in January 2005. Customers in all tiers who purchase
an HDTV and have or buy a set top box can take advantage of this new service.
Outside of Ashland, the rates are much higher for the same services. For
example, rates for expanded basic in Talent is $44.95/month.
Cable Modem Fees would increase as illustrated in the following table:
|
Old Rate |
Increase |
New Rate |
| 000000000000000000000 |
000000000 |
000000000 |
000000000 |
| Residential (w/ISP) |
$23.45 |
$3.00 |
$26.45 |
| Residential (No Isp) |
$28.90 |
$4.00 |
$32.90 |
| Residential Intermediate |
$48.25 |
$2.78 |
$51.03 |
| Business (1-IP Address) |
$72.80 |
$3.50 |
$76.30 |
Staff expects retail rates will increase by $4-$6/month as a result of our
wholesale price increase. Ashland's ISPs are currently charging $31-$39/month
for this retail service, so the new range could be $35-$45 per month.
For comparison purposes, Charter currently charges $39.95 for stand-alone
cable modem rates and $29.95 for this service if the customer also purchases
cable TV. So AFN, depending on the customer's ISP choice, will be close or
slightly more expensive than Charter. Also, QWEST offers DSL service (256kb
up and down speeds) in some areas of Ashland, for a 3-month introductory
rate of $26.95, but it increases to $29.99 after the promotional period ends.
As a part of the increase, AFN will be doubling our upload speeds for residential
cable modems from the current 128kbs up to 256kbs. Our downstream speeds
continue at 3-5 megabits, which is the fastest cable modem service available
in the Rogue Valley.
No changes in High Speed Data Rates are proposed. |
