Tacoma gets a competing offer for its muni broadband system

3 May 2015 by Steve Blum
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Another company has joined the bidding to take over the City of Tacoma’s ageing cable TV and broadband system, aka Click. Rainier Connect, a local cable, telephone and broadband company, says it’ll more or less match the terms offered by Wave Broadband and add a sweetener for Tacoma Public Schools.

Tacoma’s muni system is losing $9 million a year, according to recent reports and will also need extensive upgrade work. Wave stepped in with a proposal to pay the city $2 million a year for 40 or more years, and also invest an additional $1.5 million annually in plant upgrades.

Rainier is one of three ISPs that resell broadband capacity bought on a wholesale basis from Click, so it knows both the system and the local market. The sweetener is a program it’s setting up with Tacoma schools that would offer free – and adult content-filtered – Internet service to families on a subsidised lunch program. The offer sheet says Rainier is committing $500,000 a year to that effort, although it’s not clear how much of that is actual cash out of pocket and how much is reassigned costs for in-kind support.

There are advantages to working with a locally owned company with a 100-year history, although Wave’s headquarters are just up the road in Kirkland. For both companies, the questions will – or at least should – be whether they have deep enough pockets to keep their financial commitments, even if costs are higher or the take rate is lower than expected. That inability to ride out unexpected bad times is what did in Provo’s muni FTTH system.