By John Larson
The local business seeking to be a partner in the long-term future of Click! Network appears to have the edge over its competitor, a major broadband company. On March 5, Tacoma City Council and Tacoma Public Utility Board met to hear a presentation from JoAnne Hovis of CTC Technology & Energy. The consulting firm has been advising the two governing bodies regarding options for the future of the municipally owned communications network.
There were an initial five responses to a request for proposals. Three of them were deemed fundamentally non-aligned with 12 policy goals set by the two bodies. The non-responsive bidders were given an opportunity to revise their proposals. The list was narrowed to three. One of them, Yomura Fiber, saw its discussion end due to incompatibility regarding control of the fiber to meet security regulations. The meeting this week focused on the final two, Rainier Connect and Wave. Term sheets for the two companies were examined.
Rainier Connect is a local business that has been providing Internet service through Click for many years. Wave is a company with operations on the West Coast, East Coast and Texas. “We were dealing with two viable partners,” Hovis remarked.
Both companies are similar in their technical and financial capacity. Both demonstrated the capability to upgrade and operate Click assets. Both provided independent verification of financial capacity to meet obligations. Wave is an equity-backed company, the sixth-largest broadband provider in the nation. While Rainier Connect is a small, family-owned business, it appears able to scale up its operations to meet the obligations of the deal.
Her recommendation is to negotiate with Rainier Connect. The company aligns better than Wave with several of the policy goals. On the goal of affordability for low-income customers, both companies offered reduced-cost service for households eligible for TPU electric service discount program. Both would provide free service to at least 30 locations that provide assistance to the poor, but Rainier Connect was the only one to offer the federal Lifeline subsidy of $9.25 per month.
In the category of financial stability, Wave would pay TPU approximately $1.5 million per year, each year, of which $500,000 will be applied to Wave’s electricity costs. Rainier Connect will pay $2.5 million the first year, increasing incrementally to $3 million annually beginning in year six.
In the area of customer service, only Rainier Connect promises to begin repair of service interruptions within 24 hours, and only they committed to having customer service staff located in Tacoma.
Councilmember Conor McCarthy, who took office in 2016, said this was the most positive meeting regarding Click since he has been on the council.
In response to a question from Councilmember Ryan Mello, Hovis said the company that is selected would offer cable television. Mello noted that the future of cable is uncertain. While Hovis acknowledged that the way Americans are watching television is changing, cable is not on its deathbed. “There are still a lot of people who want cable television and the partner will respond to that.”
The TPU Board will take public comment on this topic during its March 13 meeting.