Friday, March 10, 2000
Lebanon telecom costs up sharply
Bright spots are also seen
BY CINDI ANDREWS
The Cincinnati Enquirer
LEBANON — The city's pioneering effort to build its own telecommunications system has gone from an estimated $5.1 million to an actual cost to date of $9.2 million.
The system also lost $1 million in its first year, city officials said Thursday night. But despite that news, one councilman remained optimistic about the system's viability.
“There are some good surprises,” said Mark Flick, also the finance committee chairman, at a committee meeting.
Among those:
• Rapidly increasing advertising revenue brought in $16,000 in 1999 and $4,000 in the first two months of this year.
• More customers than expected — 2,300 — signed up in the first year. Mr. Flick estimates the growth will plateau at 2,850.
“Telecom should break into the black by August,” Mr. Flick said.
But another councilman was less sanguine about the numbers Thursday.
“I think we have a serious problem,” said Joe McKenzie, an early supporter of the system. “This hemorrhage is fatal if we don't do something about this very quickly.”
Lebanon's nearly 1-year-old network of fiber-optic cable lines — one of just a few such systems built by a city — provides customers with cable television and high-speed Internet access. Such access will help attract increasingly Internet-dependent companies to Lebanon, City Manager James Patrick said this week.
The network also could be adapted to alert residents to severe weather and to instantly alert the fire department when an alarm goes off in a home or business.
But the concern now is that the system's bread and butter — cable — does not make enough bread to cover the payments on the bonds the city sold to build the system.
Other city money is being used to make up the difference.
“We're continuing to grow the system; we're starting to make money,” Mr. Patrick said.
The city expects to release complete financial projections for 2000 next week.
Part of the additional costs were because the scope of the project increased to serve more areas than originally planned.
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