Tacoma, Wash., Plans Municipal Broadband P3 That Includes Private Commitments to Net Neutrality, Equity, and Privacy

Joanne Hovis, President

Yesterday I had the honor of presenting the results of a near-18-month process to the City of Tacoma, Wash., City Council and the Board of Tacoma Public Utilities (TPU). At their direction, I have been working with a City and TPU team to determine a future strategy for Tacoma’s successful and renowned Click! municipal broadband and cable network, which was built in the 1990s and has been instrumental in bringing competition and choice to the Tacoma market—offering, for example, internet service even before the region’s commercial cable network (now owned by Comcast) was internet-capable.

To secure for the coming decades the considerable benefits that Click! has delivered over the past 20 years, the Council and Board directed us to determine how a public-private partnership (P3) for operations of Click! could achieve critical community goals and values—including net neutrality, low-income affordability, privacy, and competition. The Council and Board’s shared vision is to secure these goals through private sector partnership and operations, while the public maintains ownership and control of the underlying communications network.

As the culmination of a significant process of requesting input and qualifications from potential partners, yesterday I presented two negotiated term sheets to the Council and Board. One term sheet is with local ISP Rainier Connect. The other is with a larger, regionally headquartered company, Wave Broadband. In both cases, the term sheets contemplate a partnership of 20 years, which can be renewed twice, each time for 10 years. The length of the relationship gives both sides business certainty—and enables the private partner to make substantial investment commitments.

In my view, both term sheets represent important win-win outcomes for the public and private sectors, and both term sheets meet the Council and Board’s visionary policy goals for the Click! network—including equity, net neutrality, data privacy, low-income affordability, and robust competition.

Importantly, under both term sheets, the private partner will not take ownership of any part of the network, which will remain a public asset. Indeed, the City’s utility will not only retain ownership of the existing network but will also take ownership of all upgrades the partner makes to the network with its own capital over the course of the partnership. And these upgrade obligations are robust—both term sheets contemplate not only that the partner will invest on an ongoing basis, but also hold the partners to a standard for ongoing upgrade to continually meet national or regional standards for broadband service. In the short term, both term sheets guarantee that the partner will upgrade the network to gigabit speeds across its entire footprint within three years.

In addition, under both term sheets, the private partner will make enforceable commitments to respect net neutrality, to respect user privacy, to offer substantially reduced-cost products to low-income members of the community, to meet robust customer service standards, and to offer services and pricing equitably across the entire network footprint.

While both term sheets and potential partners are strong, we recommended to the Council and Board that they proceed with final negotiations with Rainier Connect—based on its substantially higher financial offer and some stronger terms, including a much more robust oversight role for TPU in the event that the partner wants to sell or transfer its rights under the contracts to operate Click!.

The Council and Board now plan a process of public input and deliberation of next steps and the direction they wish to go—which will then lead to detailed and final negotiations for final contracts between TPU and the selected partner.

It’s been my honor to participate in this remarkable 18-month effort, which has had all the hallmarks of the best in public process—openness, competition, deliberation, transparency, and stakeholder engagement. For more on that process and its outcomes to date, yesterday’s presentation is here, the Wave term sheet is here, and the Rainier Connect term sheet is here. We prepared a report that compares the term sheets and their alignment with the Click! policy goals, which is available here. The City and TPU also released a report documenting their stakeholder engagement effort.

Published: Wednesday, March 6, 2019 by CTC Technology & Energy