Subject: LAFN Systems Bulletin - The Future of the LA Free-Net
The following message is from the Steering Committee to all LAFN users.
Please note that since there are some users who do not use LAFN mail, we
will be also sending this message as an email so you may receive another
copy. Because of the large number of LAFN users, the mail system will
be quite bogged down during this process and will likely be extremely
slow in responding.
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The Los Angeles Free-Net has been in existence since 1994 providing the
lowest possible cost internet service as a volunteer, non-profit
organization. We have been able to offer low prices because of being
able to distribute costs over a number of users. While there are some
costs that are per user, there are also a number of cost items that we
incur with only one user and they don't change with 6000 users. We have
to price the service to cover both the per user costs and to cover the
fixed costs.
During the last few years there has been a large down turn in dial-in
usage. People are switching to DSL/Cable services for higher speed. As
a result, all ISPs are losing dial-in users in great numbers. LAFN is
experiencing the same down turn.
As a result, LAFN was able to find a reasonable DSL solution for AT&T
areas in California. We were able to price the service generally below
other vendors (after the first year). LAFN did not adopt introductory
pricing because we didn't have the resources to cover the first year's
losses and we thought that our users would be able to see that they will
end up paying back the first years lower prices with the higher later
year prices.
Over 5/6'ths of the LAFN users who committed to switching to LAFN DSL
decided to go with AT&T's lower introductory rate. They said they would
come back at the end of the year. Well, the year is long gone and none
of them have returned to LAFN. They are paying over $25 per month for
their service and not switching back.
As a result, LAFN is now faced with a significant choice: shut down as
of 1 November 2007, or change our approach to try and remain in
business. Our goal is to remain in business and we are going to try to
turn around the situation. However, we have only a limited time to
bring about changes. The current price structure LAFN has used for
several years no longer covers our costs. Thus we are faced with either
shutting down or raising rates and adopting the same strategy as AT&T.
Please note that other ISPs have been forced to adopt this introductory
rate structure to survive.
LAFN does not really want to cease operations. However, we need to
raise our number of users significantly to continue. Even with raising
our rates, LAFN still needs 250 new DSL users or 1500 new dial-in users
to be able to cover our costs. We anticipate altering our account
structures and costs as follows:
Dial-in $8 per month (regular and extended). SlipStream would add $1
more.
DSL - Introductory rates (one year commitment)
Bronze - $15 per month
Silver - $15 per month
Gold - $23
Platinum-$40
After the year is up the rates become:
Bronze - $30
Silver - $30
Gold - $35
Platinum-$50
At this time we plan to retain the existing pricing for our existing DSL
users. We believe they should be rewarded for taking that leap of faith
with us. We are considering retaining the existing flat rate program
for DSL such that users would have a choice.
Also, please note that Extended dial-in service is available in most
locations nationwide (except Alaska, Hawaii, Maine, and Iowa) for the
same $8 per month rate. DSL is currently only available in AT&T areas
of California. This is a great opportunity for those in AT&T areas to
upgrade to DSL as we may not be able to retain the flat rate service for
DSL for new users in the future.
We also plan to start an extensive program to obtain new users. For the
entire LAFN history we have relied on word of mouth advertising from our
existing users. Over 80% of our new users indicate that as their source
of information on LAFN. However, we are not signing up enough new users
to be able to even maintain the new rates.
History shows that our current users are going to be the source of most
of the new users. We desperately need your assistance in this endeavor.
If we are unable to obtain the new users previously indicated LAFN will
have no choice but to shut down. If you like LAFN service and want it
to continue, you will need to be part of our program to obtain new
users. Advertising has traditionally not been very effective. However,
we are considering trying it. However, it costs and we currently do not
have anyone with real experience in this area. We are looking for
people with advertising experience to volunteer to assist in this
campaign. The continued future of LAFN depends on the success of this
campaign.
Another step we are are likely to take in the next few weeks is to move
our servers to a location with a lower cost. While the current location
is provided free, the telecommunications costs to that facility are
considerably higher than other available facilities. Moving the servers
will result in the loss of internet service for the Tarzana hospital
lobbies and will require that our servers be down for a couple of work
days. We will have access to the new facility only during regular work
hours.
We have not finalized the arrangements for moving the servers yet so
will not be able to provide a schedule at this time. Once the
arrangements are completed, we will have to move quickly so there will
not be much notice. There will generally be no change required to your
computers and things will work as before once we are back up. However,
if you have one of the LAFN IP addresses configured anywhere
(206.117.18.xxx), that will need to be changed. We will provide that
information once it is known.
We realize the inconvenience this will cause our users, but the only
other viable option is to completely shut LAFN down. That would be an
even larger inconvenience for most users. We appreciate your
understanding during this transition period and hope you are willing to
spread the word about LAFN. We cannot survive without new users.
-- The LAFN Steering Committee
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