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Tacoma business trends show how future can play out

The future is hard to plan for, especially when they keep moving and changing it.

Just about any edition of this esteemed publication contains multiple illustrations of the foibles, frustrations and futility of trying to guess where the future is going to be and making appropriate plans for showing up at that location.

But a handful of items in one specific edition from the past week are especially handy in contemplating just how tricky a proposition it is.

• Tacoma officials are mulling a proposal to lease the city-owned fiber-optic network to Kirkland-based Wave Broadband. The deal would include cable-TV service Click.



• A Port of Tacoma executive says container facilities there and at the Port of Seattle are operating at less than half of their total capacity.



• KeyBank is closing its Hilltop branch, due to a drop in consumer deposits of 25 percent from 2012 to 2014 and a 73-percent drop in consumer and small-business lending.



When people and businesses make investments in new facilities, the end game rarely factors in the planning. Those investments are spurred by the potential (or hope) for growth. Even if those new investments have a hand in making some older investments obsolete, there’s little thought given to what might eventually do the same to the latest building, plant, high-tech gizmo or operating strategy.

Banks didn’t build extensive networks of extensive branches with the expectation that people would stop going to them, preferring ATMs, mail and telephone services, and banking by Internet and wireless devices to actually walking into a bank.

The ports didn’t add container-handling terminals with the expectations that so much of the capacity would sit idle because of changing shipping patterns, new entrants to the market and stronger competition from existing players.

And the city didn’t get into the cable-TV business with a plan for it to become a money-draining proposition, squeezed by higher costs from content providers and lower revenue from consumers who are using other channels to access that content.

But that’s what happened, so now the concerned parties have to figure out what the next version of the future might look like, how they might get there and what to do with the investments made in plant and equipment designed for an earlier version of the future that is itself obsolete.

Of the three news items, the one about a local bank branch reflects a trend that has been playing out the longest and is the least surprising. Bank branch totals have been declining because of mergers, consolidation and closures. After peaking in 2009 at more than 92,000, the national total dropped to barely above 90,000 in 2013.

If anything, the surprising aspect is that the total hasn’t fallen further faster. Banks are still opening branches in the extending suburbs, where their customers have moved. And branches do still have some utility as marketing devices to get bank brands in front of the eyes of customers. But increasingly those eyes are focused on a computer or handheld-device screen, where almost any banking function can be performed. Key’s Hilltop branch, built in 1951 and containing nearly 10,000 square feet, is configured for a much different era.

The city’s venture into fiber-optic service was supposed to give residents some choice and a price break on cable TV. That it accomplished, for a while. But all cable providers, not just Click, have found the business model of the past is falling apart in the present and isn’t likely to work in the future, whatever that looks like.

The city’s decision to unload operation of the system on someone else who gets the burden of figuring out that “whatever” shapes up as, depending on the terms, a least-worst option. The surprising aspect isn’t that someone wants to take on the task (and risk), but that it’s willing to do so for 40 years, the proposed term of the lease. Maybe fiber optics will still be a significant technology in 2055 — copper wire, hardly a new telecommunications tool, is still around — but that’s a gamble it’s better to let someone else undertake.

The ports don’t have nearly as attractive a least-worst option. They’ve already ceded operational control of their facilities to outside operators, but they’re still on the hook for facilities that aren’t set up for a world of fewer but bigger ships. The ports are considering whether to focus on fewer but bigger facilities that could handle increased volumes. How to steer those increased volumes to Puget Sound remains to be figured out.

And even if they do, the future may have morphed, evolved or been disrupted into something else yet again, and now everyone gets to tear up the new plans and write still newer ones. Hitting targets in business life would be a lot easier if the target would stay still. As one day’s reading reminds us again, it doesn’t.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at bill.virgin@yahoo.com.

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