| Background: |
When AFN was launched as an open network over 2 years
ago, all local and regional ISP’s were invited to participate.
We currently have nine certified ISP’s and occasionally receive new
inquires from start up companies that wish to become certified ISP’s.
Our staff feels that our current number of ISP’s offer an adequate number
of customer choice, price, and product offering therefore customers won’t
benefit significantly by continuing to add ISP’s to the network.
New ISP’s would also require more AFN staff time and additional staffing
over the long term as ISP participants increase. There are three possible
ways to remedy this problem. They are:
1) Limit ISP’s to the nine that are currently
certified.
This is clearly the easiest option and requires the least amount of
effort and staff time to implement. It would also create a secondary market
where ISP’s could sell their AFN customers to new entrants at whatever
the market will bear much like the existing market for drive-up windows in
Ashland. If a company ceased to operate, the City could accept the highest
bid for their slot and still maintain nine ISP’s. The downside to this
option is that our open network would be limited to nine participants. This
could be perceived as a retrenchment of the original open network idea that
was used to partially sell AFN’s benefits. However, we believe there
is abundant choice currently and this issue could be revisited if future
conditions change.
2) Increase Entry Requirements for New ISP’s
This option would grandfather the existing ISP’s, but would set
new requirements for any new entrants. This could be done in a number of
ways, including but not limited to: cash payments, bonding requirements,
deposits, or knowledge and experience benchmarks. While this might discourage
some new participants it doesn’t guarantee that any new ISP’s
wouldn’t be added. Adding new ISP’s will ultimately require new
staffing and costs, without significant benefits to customers.
3) Create a moratorium on certifying new ISP’s until July
2003.
The issue here is balancing the ease of implementing option #1 and
a breach of the perceived open network approach of AFN, or pursuing option
#2, and potentially continuing to add new ISP’s resulting in higher
costs and more staff requirements in order to keep AFN open to new ISP’s.
The third option buys us additional time to review performance of certified
ISP’s, market conditions and competitive pricing, interest from potential
new ISP’s, estimates of increased staffing requirements before any final
decision is made. Staff feels that the moratorium solution (#3) is the best
choice because it allows us to solve this problem temporarily and then
re-evaluate with better data in July 2003, for an ultimate solution. |
