The [Former] Mayor Speaks on AFN
by Cathy Shaw“Eliminate risk and you eliminate innovation…don’t eliminate risk; knowingly take it on.” Vaughn Keller
I served as mayor of Ashland during the inception of the Ashland Fiber Network (AFN). At the time we were preparing for electric deregulation and it seemed logical to lay the infrastructure for high-speed data services and cable television while we were at it. Back then we were all on dial-up and our community, rich with graphic artists, writers, publishers, and book editors needed both speed and reliability. AFN was about providing infrastructure for Ashland’s homegrown businesses and creating a spark to encourage new, clean industry that would provide living-wage jobs.
The New Year’s edition of the Ashland Free Press included a number of articles suggesting a nexus between conditions specific to the city-owned cable system and the revenue shortfall. Below I list few of those reasons, why they’re flawed, and the real cause of the growing shortfall.
Leadership
Between City Councilor Russ Silbiger and the Ashland Free Press, the most ink was given to management’s ‘failure of leadership and lack of vision’ as the single biggest contributing factor for AFN not realizing its potential. And why not? Staff is an easy and believable target—and one being used with greater frequency these days. After all, it makes sense that the person at the top is to blame. Problem is, when it comes to AFN, Dick Wanderscheid is not at the top of the food chain. The city council is.
Let me explain by putting this in a different context.
When people are unhappy about how money is being appropriated in Salem – not enough for schools, human services or whatever—they call their elected officials. They blame the Republicans, the Democrats, the Senate, the House, or the governor. However, in my six years of working with Alan Bates I cannot recall one single constituent complaining about state staff not providing vision or leadership for the elected officials.
When Social Security shows unprecedented debt, we don’t call the Social Security Administrator demanding an explanation as to why he failed to re-invent the organization so it runs in the black. Nope: We blame President Bush or Congress.
Yet in Ashland we blame staff.
Isn’t it true that voters don’t want staff setting the vision or policy? That’s why we have elected officials. What’s ironic about this finger-pointing is that it’s coming from the very people who should be providing leadership and vision. I guess as long as fingers are pointing at staff, voters won’t place blame where it really belongs. So far, so good.
Marketing
The suggestion that inadequate marketing factors into AFN’s revenue shortfall seems logical. However, there are different forces at play in the AFN/ Charter scenario that tend to neutralize marketing.
Marketing typically works best where two ‘similar’ businesses are competing for the same market. And while AFN and Charter appear to be similar they’re fundamentally different in an important way: AFN is community-owned and Charter is corporate-owned. This fact drives subscribers in spite of marketing and creates blocks of users who cannot be persuaded.
For example, there are those who subscribe to AFN because they believe in community. They’re the same people who contribute to JPR, Britt, KSOR, and political causes. They’re the people who shop at the Ashland Community Food Co-op and Ashland Hardware. And they’re the same people who vote for libraries and schools. These subscribers came to AFN simply because they believe in community-owned cable and will remain for the same reasons no matter how many slick mailers they receive from Charter.
Similarly, there are those who oppose government competing with private enterprise. These subscribers will remain with Charter no matter what we say or how we say it.
In addition to these locked customers, there are also those who subscribe to AFN because their livelihood or business depends on a rock-solid system that won’t crash. Yes, there are some who don’t want cheap: They want 100% certified American steel. These subscribers are immune to “specials” designed to lure them away from AFN because reliability is driving their decision, not cost.
Finally, there are those who are strictly driven by rates and don’t care who owns the system. These subscribers are with Charter and will remain there because, although neither AFN nor Charter are charging what it costs, Charter is willing to go further into debt than the city is. Ironically, if these subscribers all moved to AFN, our community-owned cable rates would go down because industry rates are driven by the customer base.
Central Services
Central Services is the portion of city government that doesn’t generate its own revenue, such as administration, finance, the city attorney, and personnel. Because these services support all the city departments, all departments share in the cost of these services.
The suggestion by the Ashland Free Press that getting out from under the city’s Central Service equals a solvent system,’ is logical. After all, AFN’s Central Service Charge is the difference between the community-owned cable running in the black vs. in the red.
While getting out from under the city does indeed remove the central-service charge, it also removes AFN from the great resources of the city. I was on the Hospital Board when it divested from the city and I assure you, AFN and Ashland Community Hospital are very different.
Prior to divesting from the city, Ashland Community Hospital was independent from the city in nearly every aspect. AFN, on the other hand, is intricately woven into the city fabric and divestment would undoubtedly trigger significant start-up dollars for the spin-off.
We should think carefully before implementing this plan of attack.
Prevailing Wage
Divesting AFN from the city in order to remove prevailing-wage requirements is one of the more insidious solutions to our revenue shortfall. After all, isn’t this the community that passed a resolution supporting a living wage? Isn’t this the city that said if non-profits wanted to receive City of Ashland grant money they would need to pay a living wage and provide benefits to their employees? And yet we want to reduce our overhead by hiding behind a company that will pay less and not provide benefits? It might be time to walk the talk.
“We cannot insure success, but we can deserve it.” John Adams
So what’s the real reason behind AFN’s revenue shortfall?
The reality is that AFN is running behind schedule on debt retirement because we’re fighting the third largest cable company in America. By holding the Ashland market 46% below their national average, Charter holds AFN below market as well. Make no mistake: Charter wants a monopoly in this market before dumping their bankrupt system and they’re aggressively going after it.
There’s an amazing corporate battle going on right here in our backyard. This is what a take-over looks like. This is what predatory pricing looks like. This is what corporate bullying looks like. If Ashland voters truly believe in closing corporate loopholes and holding corporations accountable, this is what the fight looks like. We should all be concerned that our nation is close to having just two cable companies determine 90% of our nation’s programming. It’s time to put our money where are values are.
Given the importance of this struggle, a $7.50/ month fee seems like a small price to pay. However, the hue and cry against this 25-cent/day subsidy, led by those who oppose government competing with private industry, culminated in a speedy retreat by the council. Further, the importance of AFN infrastructure was marginalized by anti-television rhetoric which conveniently ignored how government subsidizes all infrastructure—with the largest subsidization going to the automobile.
For example, on top of state and local transportation dollars, Ashland charges $6.00/ month/ household to generate additional road-repair dollars—and has done so for 20 years. In all that time no one has complained. No editorial about it being regressive. Not one word about the poor who can’t drive and yet still pay. So, why shouldn’t we subsidize infrastructure for data services that enables people to make a living wage working at home?
AFN has done exactly what we hoped it would do: It diversified and strengthened our economy while minimizing the impact of this economic growth through home offices. Indeed, since AFN launched, the number of Ashland businesses have doubled while our population grew only two percent per year.
AFN isn’t about teaching a man to fish vs. giving him a fish; AFN is about providing the tackle.
