This is the last in a four part series about the Click network in Tacoma, Washington, where city leaders spent most of 2015 considering a plan to lease out all operations of this municipal network to a private company. Part 4 highlights Click’s often unseen “spillover effects” on the City of Tacoma’s economy and telecom marketplace over the network’s nearly 2 decades in operation, contributions that Tacoma should expect to persist and even expand in the future.

We published Part 3, an analysis of why the municipal network is positioned to thrive in the years ahead within the modern telecommunications marketplace on June 21st. In Part 2, published on June 7, we reviewed why Tacoma Public Utilities considered the possibility of leasing out all of the Click operations. On May 31, we published Part 1, which reviewed the community's plans for the network.

Part 4: Click’s Accumulating “Spillover Effects”

Regardless of any impending changes with Tacoma Click’s operations, it’s clear that the network has and will continue to support and enhance the overall economic interests and the public good in the City of Tacoma. “Spillover effects” - the benefits to the community that don’t show up clearly in any financial statements - tend to appear after communities developing their own municipal broadband networks.

Click’s spillover effects start with the broad economic development benefits that arose when Click appeared. Before Click came to town, Tacoma was a city in economic decline. Many businesses had fled downtown for the suburbs over the 50-plus year period after World War II. 

This is Part 3 in a four part series about the Click network in Tacoma, Washington, where city leaders spent most of 2015 considering a plan to lease out all operations of this municipal network to a private company. In Part 2, published on June 7, we reviewed the main reasons why Tacoma Public Utilities considered the possibility of leasing out all of the Click operations. On May 31, we published Part 1, which shared the community's plans for the network. Part 3 covers why we believe the Click municipal network is positioned to thrive in the years ahead within the modern telecommunications marketplace.

Part 3: Positioning Click for the Future

If Tacoma leaders decide to move ahead with the “all in” plan that they're currently exploring, several factors suggest that Click can become an increasingly self-sustaining division of Tacoma Public Utilities (TPU). To recap, the “all in” plan would reportedly involve two major changes at Click. One, it would mean upgrading the network to enable gigabit access speeds. Two, the all in option would likely mean cutting out the “middlemen” private companies that currently have exclusive rights to provide Internet and phone services over the network. Instead of the current system, where Click only offers cable TV services while middlemen provide Internet and phone, the new all in plan would position Click as the retail provider for all three services.

Adapting to A Challenging and Changing Telecom Landscape

It makes sense for TPU to keep Click and improve it. TPU’s slide from Part 2 in this series reveals:

(1) Click’s subscriptions for Internet-only customers turned a corner in 2014 and started to exceed projections.  This data indicates that the most important component of Click’s future business prospects—its Internet access service—is growing.

This is Part 2 in a four part series about the Click network in Tacoma, Washington, where city leaders spent most of 2015 considering a plan to lease out all operations of this municipal network to a private company. Part 2 explores the major reasons why Tacoma Public Utilities has considered the move to lease out all Click operations. Part 1, published on May 31, examines possible plans for Click in the immediate future.

Part 2: TPU’s Challenges with Click

When TPU officials proposed last March to lease the network to a private ISP for 40 years, they cited revenue losses for Click as high as $7.6 million annually, indicated by troubling financial reports in recent years. Some critics, however, such as those with the advocacy group “Stick with Click,” countered that this figure is inaccurate. They say that TPU manufactured the revenue losses through an accounting decision that resulted in a deceptively bleak picture of Click’s financial performance.

To shed light on the disagreement, we're examining relevant facts about Click.

Allocating the Costs of a Shared Infrastructure

When Tacoma first built the Click network in the late 1990s, the Hybrid Fiber Coax (HFC) infrastructure was to support services for two divisions of the TPU: TPU Power and Click. Besides the infrastructure’s function for supporting Click’s services, the city designed the HFC infrastructure to support a smart electrical metering program for TPU Power services.

This dual purpose meant that for accounting purposes, TPU had to allocate the costs of a shared network based how much each division would rely on the network. This cost allocation (a common accounting practice) would assign each division a portion of the original capital construction costs for building the network and a separate portion of the network’s ongoing operations and maintenance (O&M) costs. 

Ultimately, and with the help of an independent consultant, the city settled on cost allocation ratios in 2003, which determined how the TPU would assign capital and O&M costs to each division. TPU Power would pay 73 percent of the capital costs to build the HFC infrastructure; Click would pay the remaining 27 percent. Click would then pay a 76 percent of the network’s ongoing O&M costs, with TPU Power paying the remaining 24 percent of O&M.

This is Part 1 in a four part series about the Click network in Tacoma, Washington, where city leaders spent most of 2015 considering a plan to lease out all operations of this municipal network to a private company. Part 1 explains Tacoma's plans for Click's immediate future.

Part 1: Tacoma Votes to Explore Keeping Click!

2015 was a tense year for Tacoma Click, the nearly 20-year-old municipal network in this city of about 200,000 just south of Seattle. In March of 2015, Tacoma Public Utilities (TPU) announced it was considering a proposal to sign a 40-year agreement to lease out the network to a private Internet Service Provider (ISP). But after months of deliberations, the Tacoma City Council decided in December with a resounding 8-0 vote at the last City Council meeting of the year to explore what the city calls their “all in” option: a plan which, if implemented, would include technological upgrades and major structural changes to the business model aimed at preserving Click as a municipally-owned network.

When Tacoma Click, one of the first municipal networks in the U.S., launched its Hybrid Fiber Cable (HFC) system in 1999, the network provided Internet speeds that were among the fastest in the country. For the past two decades, Tacoma Click has provided community anchor institutions, businesses, and residents in Tacoma with access to retail Cable TV service and wholesale Internet and phone service. 

Click has never managed to pay for itself. However, nothing in Click’s financial reports can account for the municipal network’s numerous indirect contributions (both economic and otherwise) and overall value to the Tacoma community as a whole. There are also promising signs that the network is positioned for future growth.

Taking Sides

When communities decide to proceed with publicly owned infrastructure, they often aim for open access models. Open access allows more than one service provider to offer services via the same infrastructure. The desire is to increase competition, which will lower prices, improve services, and encourage innovation.

It seems straight forward, but open access can be more complex than one might expect. In addition to varying models, there are special challenges and financing considerations that communities need to consider.

In order to centralize our information on open access, we’ve created the new Open Access Networks resource page. We’ve gathered together some of our best reference material, including links to previous MuniNetworks.org stories, articles from other resources, relevant Community Broadband Bits podcast episodes, case studies, helpful illustrations, and more.

We cover: 

• Open Access Arrangements
• Financing Open Access Networks
• Challenges for Open Access Networks
• U.S. Open Access Networks
• Planned Open Access Networks

Check it out and share the link. Bookmark it!

Next Century Cities recently hosted "Digital Northwest," a summit for regional broadband leaders. Leaders from member cities all over the country gathered together to learn from one another and discuss digital inclusion, models for success, partnerships, and much more. 

Chris led a panel of mayors and city council leaders from cities with well-known municipal networks in a discussion of their networks and how their communities have benefitted. 

The panel featured: 

• Mayor Jill Boudreau, Mt. Vernon, WA
• Mayor Wade Troxell, Fort Collins, CO
• City Council President Jeremy Pietzold, , Sandy OR
• Councilmember David Terrazas, Santa Cruz, CA

Next Century Cities (NCC) is hosting Digital Northwest: A Broadband Summit for Regional Broadband Leaders at the Bell Harbor International Conference Center in Seattle, Washington. The National Telecommunications and Information Administration (NTIA) is co-hosting the event.

The summit will bring together federal, state, and local officials, industry representatives, and community leaders to celebrate successes and share resources. The summit will examine gaps that remain and strategize on how to expand high-speed Internet access.

After a welcome reception in the evening of Sunday, March 20th, there will be a daylong summit on Monday, March 21st featuring workshops on a variety of topics ranging from rural Internet access to the digital economy. 

Conference attendees are invited to stay a little longer. In the morning of Tuesday, March 22nd, government officials, industry representatives, and other experts will be on hand to answer questions in an “office hours” session.

What: Digital Northwest: A Broadband Summit for Regional Broadband Leaders 

Where: Bell Harbor International Conference Center, Seattle, Washington, 98121. 

When: March 20-21, 2016 (optional: the morning of March 22, 2016)

Register online for the summit.

Northwest Open Access Network (NoaNet) was just a dream back in 2000, but, fifteen years later, it’s one of the largest networks in the state of Washington. NoaNet is celebrating fifteen years of accomplishments, so we compiled fifteen fun facts everyone should know about this community network.

1. One of the first Open Access networks in the U.S.
Back in 2000, people in rural Washington watched as the dot-com and telecom boom passed them by. Frustrated that large ISPs refused to build infrastructure near them, the people created NoaNet and allowed anyone to use it through Open Access. This type of design encourages multiple service providers to share the infrastructure and local communities own the network.

2. Almost 2,000 miles of fiber
You know that amazing, next-generation technology that Google is rolling out in select cities across the U.S.? Yeah, people in Washington started using fiber optic cables fifteen years ago to bring high-speed Internet to their communities. Now, NoaNet extends almost 2,000 miles through both rural and metro areas.

3. It’s a giant Institutional Network
With all that fiber, NoaNet connects 170 communities and around 2,000 schools, libraries, hospitals, and government buildings. It serves as a middle mile network, connecting the public institutions of small towns to the greater Internet. 

4. 40% of Washington government traffic, by 2007
And that’s just within the first seven years!

5. 61 last mile providers
From NoaNet’s infrastructure, private providers bring connectivity the last mile to homes and businesses. Having publicly-owned middle mile reduces the capital costs of building last mile infrastructure - that means more providers can compete with one another and better prices for everyone. Currently, there are over 260,000 customers!

Island living has its perks - the roar of the waves, the fresh breeze, the beauty of an ocean sunset - but good Internet access is usually not one of them.

A November Ars Technica article profiles Orcas Island, located in Washington state. Residents of the island's Doe Bay chose to enjoy the perks of island living and do what it took to get the Internet they needed. By using the natural and human resources on the island, the community created the nonprofit Doe Bay Internet Users Association (DBIUA). The wireless network provides Internet access to a section of the island not served by incumbent CenturyLink. 

DBIUA receives its signal from StarTouch Broadband Services via microwave link from Mount Vernon on the mainland. Via a series of radios mounted on the community's water tower, houses, and tall trees, the network serves about 50 homes with speeds between 30 Megabits per second (Mbps) download and 40 Mbps upload. Residents who had previously paid CenturyLink for DSL service were accustomed to 700 Kilobits per second (Kbps) download except during busy times when speeds would drop to 100 Kbps download and "almost nothing" upload.

Outages were also common. In 2013, after a 10-day loss of Internet access, residents got together to share food and ideas. At that meeting, software developer Chris Sutton, suggested the community "do it themselves." 

Island Self-Reliant

The talent to make the project successful came forward to join the team. In addition to Sutton's software expertise, the island is home to professionals in marketing, law and land use, and a former CenturyLink installer. The network went live in September 2014 and is slowly and carefully expanding to serve more people.

Doe Bay realized that they could solve the problem themselves. Ars quoted Sutton:

Just waiting around for corporate America to come save us, we realized no one is going to come out here and make the kind of investment that’s needed for 200 people max.

…

Out on the coast of the great state of Washington, community networks are making waves. Orcas Island residents recently made headlines with their homegrown wireless network, and Mount Vernon’s fiber network previously appeared in the New York Times. Now, the city of Anacortes is considering its options.

Anacortes: Fiber-to-the-Home?

The city is negotiating with an engineering firm to develop a fiber network that best provides connectivity for the 16,000 residents. The engineering firm is expected to present to the city council next on November 16th.

Public Works Director Fred Buckenmeyer estimates the cost of fiber optic installation at about $15 million. The city of Anacortes has applied for a $375,000 grant from Skagit County to help pay for the construction, but the city would likely need a take-rate (homes to subscribe to the network) of 35 - 40% to break even on the project. 

Mount Vernon: Open Access

Anacortes’ plan is rather distinct from that of its neighboring community Mount Vernon. The network in Mount Vernon is an open access fiber available to government and local businesses, not residents, in Mount Vernon, Burlington, and the Port of Skagit.