By Mike Harpold
March 31, 2010
The Ketchikan City Mayor wants to get KPU Telecom out of private business, but selling the utility would be nothing less than throwing the baby out with the bath water.
From a consumer standpoint, selling KPU has never made sense. It will end telephone and cable TV competition in Ketchikan, resulting in higher rates for every subscriber and fewer services. The expense of technology upgrades cited by the city as a reason to sell will be borne by ratepayers whether the utility is city owned or in private hands.
City management complains that KPU Telecom profits, currently used to subsidize water and electric services, have fallen from $2 million annually to a half-million. The manager says proceeds from a sale will be used to continue the subsidies through a rate stabilization fund. But since the buyer will have to recover his outlay by raising our cable TV and telephone rates, how are Ketchikan residents ahead?
Today Ketchikan offers businesses and residents the most advantageous array of low rates and state of the art information technology in Alaska. But once KPU Telecom is sold, we will no longer have control over the shape of Ketchikan s information infrastructure. We won t be buying the utility back if we find we ve made a mistake.
The reasons cited for the sale are not substantive and appear to reflect only narrow city government interests. They do not incorporate the broader interests of residents and ratepayers. In a move akin to asking the barber if you need a haircut, the city asked a firm that specializes in the sale of municipal utilities if it should sell. Predictably, the firm said yes, pocketing $95,000. The same firm will set the price and take a commission on the sale.
Sale backers argue that the city council will have final say on whether to sell or not, but the results of the election will stand as a voter-driven mandate. If a buyer is not found, KPU Telecom will die a slow death by starvation.
Ketchikan will live with the
results of the April 6th ballot for many years. Take a minute
About: "The author served on the Ketchikan City Council from 1998 to 2001"
Received March 27, 2009 - Published March 31, 2010
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