Wiring Southern Oregon
Using the Ashland Fiber Network as a model, a Medford businessman builds a fiber-optic network to increase competition in cable TV, Internet service and high-speed data transmission
Medford, OR (PRWEB) April 28, 2005
As Hunter Construction owner Richard Ryan's crews installed 80 miles of fiber-optic cable for the upstart Ashland Fiber Network in recent years, he began seeing a far greater dynamic at play.
He wasn't just wiring one town, he was setting the stage for an enterprise with far-reaching implications. Ryan envisioned the possibilities of extending fiber up Highway 99 into Medford and beyond.
"It was more like a bolt-of-lightning kind of thought," Ryan says. "Boom, there's an opportunity to develop a community network here to expand upon Ashland's blueprint and get a more regional opportunity and carry open-access
To a greater area."
If AFN could revolutionize communications in Ashland, why couldn't the same thing happen elsewhere in the Rogue Valley? If competition could reduce the cost of cable TV in one place, why not elsewhere? If high-speed data transmission could lure business to Ashland, why not the rest of the Bear Creek drainage?
"The Ashland Fiber Network has provided the opportunity for businesses, such as ours, to create a business that without the AFN would otherwise not be possible," Ryan says. "The community network we are constructing is an example of a business built due to the availability of this technology, and we hope to
Share the opportunity to create new businesses using our open access network."
Fiber-optic lines are a conduit for three elements: cable television, Internet service and high-speed data connectivity. It's the latter two that Core Digital will pursue - at least for now. AFN provides all three, selling television
Packages, while offering bandwidth to nine Internet service providers.
In fairly short order, Ryan revved up Hunter Communications and Core Digital - all housed in a new $300,000 facility on Enterprise Drive - to tackle the chore. Hunter/Core has already signed 12 clients for high-speed connectivity.
The company's also pursuing a telecommunications franchise in Talent and is considering the options for a cable TV franchise there as well.
"We plan on offering full data and cable TV services - a build out - upon approval of the required franchises," Ryan says.
Core Digital is connecting the valley in a way promised but as yet undelivered by corporate giants Qwest and Charter Communications. Just as AFN is a bandwidth broker in Ashland, Core Digital will do the same for Talent, Phoenix, Jacksonville, Central Point and Eagle Point.
"AFN is at the cusp of the technology," Ryan says. "They're creating collaborative opportunities for a community system linking residences, businesses, schools, government agencies and health care. The infrastructure and technology are there to support a regional digital village."
Sooner or later, like AFN, Core Digital will find itself pitted against corporate giants Qwest and Charter Communications - a company for which Hunter Communications once did infrastructure work. The track record for mammoth utility providers, however, isn't strong when it comes to serving smaller, less profitable markets.
Thus, Ryan is anxious to see what benefits can come from his efforts, be it merely saving clients money, improving school Internet service or bringing new business to the valley.
"If everyone is afraid of the big guy with lousy service, how is anything going to get started?" Ryan queries. "The local cable provider has changed four times, the phone company two times.
"Are they going to reinvest in the community as part of their business and marketing plan? Did Ashland back down when challenged? The answer is essentially 'no.' The model is set; there's a model for others to follow."
AFN has been paying Qwest $35,000 annually for service from its Medford point of presence into the Internet.
What really opened the door for Ryan was AFN's decision to string its cable between Ashland and Medford. In order to run lines through Medford's right of ways, AFN had to deal with the City Council. Medford agreed to waive $80,000 in franchise fees charged over a five-year period in exchange for AFN connecting City Hall and the Lausmann Annex to the network.
Part of Ryan's agreement with Ashland was ownership of 50 percent of the 48-count fiber bundle. Core Digital connected Medford's city offices and had advanced wires to the Medford School District's hub.
"I'm tickled to death with it," says Medford city economic development point man Bill Hoke. "It's a real benefit. It's good for AFN, for us and other guys. Anytime you enhance capabilities it makes it more attractive to a broader audience. Normally those are users providing above-average wages. It will also
Give people working in the proximity the ability to hook on and grow their business."
Hoke hasn't charted the potential impact of high-speed capability for the community, but he can see just around the corner.
"With the Winetrout Building (along the railroad tracks) coming on line," Hoke says, "that will be easily hooked into the high-speed lines."
Ryan plans to work the south valley and outlying areas first, concentrating on business customers. But there are hot spots in Medford as well.
"Initially, we're looking for people along the main line that goes down Highway 99, then we're planning to go out Barnett (Road)," Ryan says. "We have a different technology solution to the question of high-speed access than Charter
And Qwest. We want to be able to respond in days, rather than taking months and years."
Ryan likens the present telecommunications options to a garden hose, and says what he's building is more akin to a fire hose.
"There's both an increase in volume and speed," he says.
Charter Communications was quick to answer AFN's expansion with rate reductions in affected areas, slowing the city's return on its $7.6 million investment that will eventually grow to $9 million.
Dick Wanderscheid, AFN's new chief, says in November of 2000, Charter was charging $30.43 for its digital-plus cable TV package, requiring a one-year commitment. At the same time, outside of Ashland, the local cost was $48.89.
As AFN went into different areas, Charter countered with a variety of incentive packages.
Charter Communications group vice president Ron Hren, who oversees the company's Oregon operations, says the company will continue to compete rigorously.
"We compete where we have to compete," Hren says. "Research shows there are very few places where cable has been overbuilt, where someone has been successful. You need tremendous revenue to pay back the investment."
Hren says Charter has 200 business customers in the area with high-speed connections.
While Charter was able to look over AFN's digital shoulder as the public fiber network posted build-out regions known as nodes for all to see, Hunter/Core will be able to build its communication lines where there is demand. If the
Pieces fall into place in Talent, the company could string fiber quickly enough to meet regulatory demands so that it could provide digital cable TV as well.
But Ryan says Hunter Communication has a couple of advantages that Ashland lacked: A private firm isn't controlled by Davis-Bacon-type statutes requiring publicly funded projects to pay prevailing union wages that tend to drive up the cost of anything built by a government agency.
"We're working on a level playing field against the competition that Ashland wasn't able to," Ryan says.
He scoffs at those who suggest Ashland should pull the plug on AFN, just as it's beginning to unleash its potential. With Hunter Communication and Core Digital tapping into the system, he says, it will both provide an unanticipated revenue source "and a shot in the arm."
Hunter Construction produced revenue of $1.2 million five years ago and anticipates sales of $3 million this year.
"We've been growing steadily," Ryan says. "We've reinvested all our profitability back into equipment, our building and personnel training."
What it can do for a large customer may soon be seen.
Medford School District has relied on T-1 lines, providing 1.4 megabits per second, to feed its network hub that serves 22 school and office sites. Core could ratchet the district's capabilities up to 100 megabits or 70 times.
Jim Scharaga, manager of information services for the district, says the network is used for everything from grades and attendance to e-mail and Internet access. Although the schools have been online for four years, they weren't totally
Connected.
"We're taking about 500 hits an hour just on e-mail traffic," Scharaga says. "My main concern is what happens when it doubles, triples. Plus we're talking about access to what I call the largest library in the world."
Scharaga says the school district currently pays Qwest between $55,000 and $60,000 annually.
Although district administrators, including Superintendent Steve Wisely, were impressed by what they saw in a test on Friday, it will be more than a month before the district could put out a proposal request that would allow Core to follow-up.
"If we can work some kind of deal, it will be a real addition to the district, going from 1.4 megs to 100 megs. That should probably, in my opinion solve our connectivity for possibly 20 years - maybe forever. This is a reasonably permanent solution."
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