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Alameda Power & Telecom moving toward sale of troubled telecom

By epearlman
Thursday, November 13th, 2008 at 7:04 am in Alameda Power & Telecom, City Council, Events.

As has been in the news lately, Alameda Power & Telecom is working on the sale of its debt-ridden telecom business. Apparently there has been an offer from Comcast. Some details here and here. More info, I’m sure, will be forthcoming. Ahh, Michele Ellson has the scoop.

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  • http://actionalameda.org/actionalamedanewsblog/2008/11/13/details-on-alameda-power-telecom-comcast-deal/ David Howard

    This should have been done 5 years ago, or sooner. Shame on Mayor Johnson for letting this drag on so long, and getting so expensive. Johnson was elected to City Council in 1998 – and has been on council or in the Mayor’s chair continuously since then – on the same ballot that authorized the utility to embark on this money-losing boondoggle. She’s never stepped in once to try to mitigate the losses, and was always “unavailable for comment” when the story broke in the newspapers during her 2006 re-election campaign for Mayor.

    I’m trying to tote up the numbers – my best estimate so far is that this failed enterprise cost Alameda taxpayers $85 to $100 million.

  • Dave Johnson

    I switched to AP&T from Comcast 5yr ago because Comcast could not resolve connectivity issues for over 6 months, yet continued to send a technician out to waste an entire day telling me “everything is fine”. I have never been happier since switching. If they are not profitable, rates should be increased. I would gladly pay an additional $10/mo on my $49/mo service with AP&T broadband. It isn’t that difficult to figure out. Price your service accordingly and if subscriptions decline, reducing profits further, then sell the business as a matter of course based on real reasons, rather than these spurious emotions. Certainly do not continue to operate any business at an operating deficit but one would expect even a modicum of attempt to remain sustainable.

    It is disappointing that the only reliable high-speed connectivity in Alameda will be dismantled and sold to the only other player in this space. Comcast does not care about its customers. It’s recent litigation and reprimand by the FCC hold testament to this fact:

    http://arstechnica.com/news.ars/post/20080820-fcc-order-scolds-comcast-for-changing-story-on-p2p-blocking.html

    And what is Comcast’s response ? Begrudgingly comply, but counter-sue the FCC. What for ? For doing its job:

    http://arstechnica.com/news.ars/post/20080904-comcast-sues-fcc-wants-p2p-throttling-order-overturned.html

    They are a more evil member of the oligopoly of broadband Internet access and I it will be a sore day when the exemplary broadband service of AP&T is handed over to them for pennies on the dollar.

    -=dave

  • http://actionalameda.org/actionalamedanewsblog/2008/11/13/details-on-alameda-power-telecom-comcast-deal/ David Howard

    If you calculate the total cost to the City of Alameda (i.e. taxpayers, homeowners, residents) to build out the network, you will find that you were actually paying more than an extra $10/month. All of the debt that was issued and electric division transfers and general fund transfers have been subsidizing the lower rates that AP&T has been able to offer.

    As I noted, I’m working to verify all of the numbers, but let’s say the cost of the network, including all the bonds and other transfers, and the $15 million net from Comcast was $80 million. (Or $8000/subscriber – more than twice what comparable networks were sold at or built out at in the same time period.)

    Anyway, take that $80 million and divide it over 120 months (10 years – from inception to today) and 30,000 Alameda households equals $22.23 per household per month. So add that $22.23 to your AP&T bill, and you’ll see what you’ve really been paying for AP&T cable. Increases of the nominal rate (what you see on your bill, excluding this hidden cost) would only cause people to switch back to Comcast.

    The overpayment to build out the network doomed the enterprise from the start.

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  • http://debtdeal.com Greg Benitez

    Yet another quality post. I posted a plug for your website at mine. Anyway, I am sure most people forget the point you are discussing.