In a major reversal, Tacoma council, utility board could change course of Click’s future

The two governing bodies that oversee the city’s Click Cable TV network will consider abandoning a long-championed plan to develop Click into a municipally-owned and operated internet, cable and phone service that would get funding help from Tacoma Power revenues.

Tacoma Public Utilities and the city are facing a lawsuit challenging the legality of its plan to fund Click’s transformation to a new business model using funds from electric ratepayers.

An analysis completed by an independent consultant sometime in the last year apparently determined that the city won’t be able to meet “some of the community’s policy goals related to Click using a retail services plan that is paid for in party by electric utility funds.” That’s according to a resolution the Tacoma Public Utilities board is expected to vote on at its meeting Wednesday.

That finding and the lawsuit were factors in the decision to reverse course on the funding model for what’s been called the “all-in” plan, a direction for Click that was approved with fanfare by the City Council in December 2015. At that meeting, the council rejected a proposal to lease money-losing Click to a private company for 40 years and instead directed Tacoma Power to develop a business plan for keeping the network public.

“We’re going to get a lot of folks concerned about this again, and that’s unfortunate, and we try to do what we can to explain it to everybody. But the risk is if we can’t find another non-power way to fund this, what’s the other alternative?” utility board member Mark Patterson said in an interview Friday. “The other alternative is turn it off. No one wants to do that.”

The decision to go all-in was championed by most council members and Click’s supporters but wasn’t universally popular. Some members of the utility board and City Council have questioned whether buoying Click with ratepayer funds is legal or financially sustainable. With Comcast and CenturyLink also offering telecommunications services in Tacoma, there were concerns about whether Click could sign up enough customers to be financially solvent.

If approved, the resolution on the utility board’s agenda will rescind the 3-2 vote the board took in September 2016 to approve a business plan for the all-in model, funded in part using power revenues. It will also ask the City Council to agree with that decision. The City Council also will be asked to rescind its vote from December 2015 that initially directed Tacoma Public Utilities to develop a business plan to keep Click publicly operated.

Patterson said they are still open to the idea of a municipally-owned and operated internet, cable and phone service, but that the key challenge is finding money to pay for it. Taking money from power revenues to pay for the telecom service has been legally challenged, and Patterson and Mayor Victoria Woodards said the city’s general fund is stretched too thin to help pay for Click.

“The only thing that we’re pulling back on is the power funding,” Patterson said. “That doesn’t mean there aren’t other alternatives. I personally would like to see us pursue private alternatives. I’ve always been more in favor of that.”

A public-private partnership could be the way forward. That was explored when Kirkland-based internet service provider Wave offered to lease Click for 40 years, but the offer was rejected by the City Council.

“It was a political choice. I think we would have pursued some of the other alternatives if there had been more support for the other alternatives in the community at the time but there wasn’t,” Patterson said Friday.

He added that a partnership with a private company could be contemplated further this time.

If the plan is approved by the TPU board and the City Council, the utility and the city will solicit bids and proposals from “any and all entities” with a working knowledge of Click, its infrastructure and its business to determine how to move forward with Click in a way that’s legally and financially sound and fulfills a number of its 12 community policy goals, the resolution states. Bids and ideas could potentially come from the two local internet service providers that currently lease space on Click’s network (Rainier Connect and Advanced Stream) or other, larger companies.

“I can just sense, having been on the council, there is a movement to want some kind of resolution, to stop having study sessions about Click and get some resolution to make it the community asset it’s supposed to be and move forward,” Woodards said Friday.

Whatever happens needs to happen fairly quickly, Patterson said. Since the TPU board approved a funding model for the all-in business plan in September 2016, much of the planned action to transform Click and upgrade its network has been on hold, stymied in part by the lawsuit filed last summer.

The city manager and interim utility director are expected to work together to get a call for proposals ready, and may hire a consultant to help, according to the resolution. Proposals should be in to the board and council some time in March, and those bodies are expected to take action within three months of getting those proposals.

The City Council and utility board will hold a joint public study session on Tuesday at noon to discuss the future of Click as a group.

This story was originally published January 19, 2018 at 2:13 PM with the headline "In a major reversal, Tacoma council, utility board could change course of Click’s future."