AP&T telecom, we hardly knew ye….
The Public Utilities Board (PUB) last night heard a presentation on “where do we go from here” with regards to the Telecom business. Unfortunately, the video is not up on the webcast center (but if you want to watch 6 hours of photos of
In a brief nutshell, AP&T’s consultant presented three scenarios for going forward:
- Refinance and keep going
- Refinance, add voice and keep going
- Get out, get out, get out (commas and repetitions added)
No recommendation was made by staff, but reading between the lines, the recommendation is number three. Staff presentation indicates that in order to refinance the bonds and continue moving forward, AP&T’s cable business will have to show significant profit for a one year period. With a $33 million balloon payment due in June 2009, this means that AP&T, who’s cable TV side is losing customers monthly (and which ha yet to make a profit) would have to turn around by May. (that’s right, three months) and/or the internet business would have to skyrocket!
AP&T’s General Manager’s incredibly telling comment was that whatever happens, now that we’re having the “what should we do discussion” we have a small window before the value of the system (whatever that value is) starts to diminish and so we have a short timeline to get wherever we are going.
The next months will see reports on the true value of the system on the market and options for pursuing various courses.
Personally, I think it’s time to cut our losses and get out. This is a business that is not suited to Public involvement. I wasn’t here for the initial vote, and have to admit I probably would have voted for it. But unlike Public Power, which is a business decades old that doesn’t change too much, Telecom changes annually, with large technological advances that cost a lot of money, and sometimes don’t pan out. What is an incremental cost to a company like Comcast, Sprint or DirectTV, is a major investment for a small utility like AP&T. The near/mid-term horizon looks to be bring major shifts in this arena, with the possibility that WiMax, satellite and wireless solutions may make cable and digital fiber obsolete quickly.
Wherever we end up heading, it’s going to be painful. Some will yell “I told you so,” some will cry “You should have done this earlier”. Fine, they were right. Some because they actually knew what they were talking about, many because if you yell “It will never work” often enough, you’re bound to be right. Right now, it’s time for quick action. Painful as it may be.
Update :Corrected to reflect the correct year of the due date for the bond balloon payment.
dave
February 26th, 2008 at 7:38 am
So now you think that govt shouldn’t be involved in businesses best suited to the private sector. Progress, John, I’m proud of you. When does your anti-cineplex column appear?
APT Watcher
February 26th, 2008 at 11:58 am
The $33 M balloon payment is due in June 2009, not three months from now. But you’re point is well-taken on market share.
dave
February 26th, 2008 at 2:43 pm
APT is the first cable TV service I’ve ever had, so I have nothing to compare it to, but am underwhelmed by it. Picture quality is very poor on some channels (very good/excellent many others). Repeated calls to tech support have never resolved this.
Anyone have a comment on APT quality vs. Comcast?
APT Watcher (and user)
February 26th, 2008 at 4:55 pm
I usually stay with one ISP and had stayed with Comcast’s predecessors even though the company kept getting taken over every two years.
I finally decided to change to APT cable when I changed ISP and have had great experience on customer service responsiveness (more so than with Comcast). I subscribe to the Lieutenant package and have a digital cable and a DVR from APT and the picture on an HDTV is consistently top notch. Competition for cable services have kept Comcast’s rates low in Alameda. My friends in Hayward who have comcast pay about 10% more than I do.
Lauren Do
February 27th, 2008 at 7:42 am
Picture quality from any cable provider will depend on how many cable outlets you have activiated. This includes if you are using one of your outlets for your internet as well. The more activated, the more picture quality for non HD channels will degrade. Eventually all channels will need to be broadcast in HD so this will gradually cease to be a problem once the switch happens and the analog signal we get now is shut off (February 2009) leaving HD as the only option.
Andy Currid
February 27th, 2008 at 4:43 pm
I don’t take cable TV service from AP&T, just internet. Their internet pricing is great, reliability is good, but customer support is horrible - mostly because it’s outsourced to a provider in B.C. that has gone through multiple support system updates in recent years. Their main differentiator relative to Comcast is pricing - perhaps one of many reasons why they’re financially in a hole?
(BTW, Lauren - if you picture quality is degrading solely due to number of outlets, that’s possibly your problem, not AP&T’s. As long as the cable provider is delivering some target nominal dB at the point they enter your house, their job is done. You may need an amp to support more outlets. And switching to digital/HD won’t necessarily fix this. Also, analog cable does not switch off in 2009 - only analog terrestrial.)