The Tacoma City Council is right to take its time weighing the options for what to do with the city’s money-losing Click network — especially since it now has even more options than before.
Rainier Connect, a telecommunications company that has been operating in Pierce County since 1910, has upped the ante on a proposal by Kirkland-based Wave Broadband to lease Click’s fiber network and provide Internet, cable and phone service.
Not only would Rainier match Wave’s proposal, claims CEO Brian Haynes, it would also work with the Tacoma School District to supply laptops or tablets and free Internet access to qualifying low-income students.
In addition, Rainier — an Internet service provider that buys wholesale Internet access from Click — would commit to hiring at least 61 of Click’s 93 employees and to not selling the company for at least 10 years.
Some critics aren’t convinced that the city should lease Click at all. And the network’s employees — most of whom are unionized — are understandably unhappy about the possibility of losing public sector jobs and benefits.
But the fact is that unless something changes in the way the network is operated, it will continue losing money — a lot of it. Tacoma Public Utility ratepayers are subsidizing Click by about $9 million annually; a lease would end the money drain. TPU would be remiss if it weren’t exploring ways to remedy the situation.
Even if Click were to start offering bundled service — in direct competition with the three private ISPs it sells to — TPU says it would still need to be subsidized. The only realistic scenario besides a lease that would significantly staunch or eliminate the money flow would be for Click to get out of the cable business altogether.
But that would undermine one of the main reasons Click was created: to provide cable competition in a market previously monopolized by a poor service provider. Today, the competition Click provides keeps cable prices charged by rival Comcast lower than in areas where Comcast is the sole provider.
A lease deal would preserve a cable competitor for Comcast; both Wave and Rainier would continue offering cable service, and either would be in a better position to keep rates lower than TPU.
Nothing should be considered a done deal here. The TPU board and City Council should give the competing proposals serious consideration — with perhaps some bonus points to a local company that has served the community for more than 10 decades.
Who knows? There might be more suitors out there. Wave Broadband’s proposal may have been first, but that shouldn’t give it a leg up over others.