Waupaca Online is losing customers on a monthly basis.
“Losing 50-plus customers over the last 12 months or so is not something we wanted. It forces us to discuss where we want to go,” City Administrator Henry Veleker told the Common Council on Aug. 16 during a Committee of the Whole meeting.
The status of Waupaca Online was the only item on the agenda.
Established almost nine years ago, the utility is regulated by Wisconsin’s Public Service Commission.
Veleker said when Waupaca Online was established, it was to:
• Meet an economic need. “Centerline Machine was the main impetus to get it going,” he said. The business needed high-speed Internet and was unable to get it.
• Provide choices for local web access at a time when there were not many.
• Help improve residents’ quality of life.
• Provide property tax relief.
Veleker said about 20 percent of the revenue that comes in through Waupaca Online goes into the city’s general fund.
“In a quiet way, we’re able to bring money into the city,” he said.
Of the approximately 300 customers the utility currently has, 153 of them have been with the utility since the beginning. “So, we’re doing something right,” Veleker said.
One of those original customers is Godfrey Insurance Agency.
In an Aug. 13 letter to Veleker, Brian Godfrey writes, “Your records will reflect our business has maintained continuous service with Waupaca Online since November 2002.
“Insurance was one of the first industries to rapidly transition from the Postal Service to almost complete dependence on Internet communications between local sales agencies and insurance communications between local sales agencies and insurance company home offices.
“Dial-up Internet service, while available, was far too slow to be workable, especially with new policy applications (upload), new and renewal policy contract delivery to agent (download) and claim loss submissions from sales agent to insurance company.”
He told Veleker that while agencies in metro areas had early and easy access to high-speed Internet, he had few options here until Waupaca Online began.
“The creation of Waupaca Online was vital to us and available precisely when we had to rapidly adapt and conform to communications via the Internet,” Godfrey wrote.
Veleker said that through 2008, the utility was doing OK.
Today, it competes with companies that have large advertising budgets, sales forces, pricing programs, retail presences and after-hours technical support.
The advertising budget for Waupaca Online is $750, he told the council.
Veleker believes Waupaca Online does a better job with its technical support and said the dollars that go into the utility stay local.
“I think, by all accounts, what we set out to do, we have accomplished,” he said. “Two people have run this business for the last nine years. I think that’s pretty phenomenal. And, the city has garnered a quarter of a million off this utility it would not have had otherwise. So, maybe it is not the failure people in the community say it is or some of you think.”
The city conducted a survey of former customers and asked why they discontinued the service.
The reasons why people switched to competitors included pricing, the service’s speed and in some cases, the economy.
Some found better rates by bundling Internet, phone and television.
Veleker said the competition is a lot keener than it was nine years ago.
“We were so sensitive to rates and cost for a couple years, so in a lot of ways, were destined to be where we are today,” he said. “Losing 50-plus customers is probably something we should expect, considering what we did the last couple years, and the economy doesn’t help.”
Four members of the council – Deb Fenske, Paul Hagen, Paul Mayou and Dave Shambeau – and Mayor Brian Smith are Waupaca Online customers.
“The cynics would say your competitors have six (there are 10 council members). Five of our governing board members feel the service is adequate,” Veleker said.
He believes the utility should be intergrated into the city’s IT and communications functions, with cross training of that staff and the creation of a department head, and that the advertising budget should be larger.
“We have spent no money telling our story,” Veleker said. “If we want to continue this, we have to have more bodies.”
Veleker said it is a service, not a business.
The mayor said, “I think what you need to do as council members is to sit back and digest what he gave us. Let’s bring it back next month. Think about how you think this should be done. This gives everyone the opportunity to talk to the public and do some searching about what they expect of Waupaca Online.”