Don’t rush to double down on Click

When public servants decide to risk millions of dollars, they’d best make sure they are acting legally. Tacoma’s utility board seems to have skipped this rather obvious step while moving to entangle ratepayers more deeply in the city’s money-losing Internet ventures.

As early as today, the board could decide to start retailing Internet access through its broadband fiber-optic system, Click. Since the late 1990s, Tacoma Public Utilities has been leasing part of the system’s capacity to private Internet service providers while retailing its own cable-TV programming.

But the Click television network has been bleeding customers right and left: It had 24,400 cable subscribers in 2009 and now has roughly 18,000. The system as a whole is currently losing money at an annual rate of $7.6 million, according to TPU staff. On its current trajectory, it will run a deficit of $37.4 million over the next five years.

That’s coming out of your pocket, if your house is plugged into Tacoma City Light. Right now, Click adds about 2 percent to the average customer’s bill, whether or not the customer buys the television or Internet services.

To stanch the hemorrhage of ratepayer cash, some TPU leaders have proposed to lease the fiber system to a private company on condition that it pay millions for the privilege, keep the technology up to date, offer inexpensive access to needy households, sustain “living wage” jobs, among other conditions.

Two telecommunications companies look very interested: Tacoma’s Rainier Connect and the Kirkland-based Wave Broadband.

Maybe that’s just too logical. Instead, some members of the utility board and Tacoma City Council would prefer to have TPU stay in the dwindling cable-TV market and plunge into Internet retailing by becoming an ISP on its own network.

This “fix” looks like the same old problem, except a lot bigger. It can succeed only if the city can recruit tens of thousands of more customers, a very big gamble. Yet the utility board may well choose this path in its meeting today, and the City Council may ratify the decision later this month. It’s a shame there’s no requirement that the plan’s supporters invest some of their personal money in the scheme — we doubt it would garner a single vote.

Plus there’s that legality problem.

The closest thing to a legal opinion on subsidizing Click came out of the Tacoma city attorney’s office last July.

The opinion is admittedly murky. But it notes that state law specifies that TPU is in the business of providing only electric, water and railway services to its customers. Television and retail Internet are not on that list.

According to the opinion, state law and the city charter “do not necessarily grant the public utility board the authority to provide commercial telecommunication services to the public because such services are not sufficiently related to the production or delivery of electric services.”

That’s not a court decision, and it’s certainly open to dispute. But it should be enough to make the board and the City Council pause before they sign ratepayers up for what will likely be even greater losses — and perhaps run afoul of the law at the same time.

This story was originally published December 2, 2015 at 12:33 PM with the headline "Don’t rush to double down on Click."