Sale of Rainier Connect: A Sign Tacoma Wasted Click Network

Tacoma, in former mayor Bill Baarsma’s blunt assessment, has a long history of “being fooled.”

“It’s almost like we’re dumb,” he says.

Baarsma and I spoke on the phone this week. He was on vacation in Hawaii, but for some reason he picked up the phone. i called about the potential sale of Rainier Connectthe local telephone, TV and Internet provider, to Palisade infrastructurea company with links to Australia and New Zealand.

More specifically, I called because the recently announced deal, for an undisclosed sum, puts the future of Tacoma’s Click Network back in the spotlight. Baarsma played a role in the creation of the Click Network some 30 years ago, during his time on the City Council.

As The News Tribune’s Debbie Cockrell reported, the proposed deal would allow Palisade to enter into the existing Rainier Connect lease with the city of Tacoma, pending approval by the city and Tacoma Public Utilities, among others. The global entity could then tap into the city’s municipally owned Click Network, just as Rainier Connect currently does, to sell cable and Internet services to local consumers.

That prospect, in Baarsma’s mind, would represent a massive waste of an asset that Tacoma had the foresight (and good luck) to invest in and build long before municipal internet was great.

Showing off his typical historical flourishes, Baarsma likened it to things like the original Narrows Bridge and the Tacoma Hotel, unique possibilities that we missed and let slip through our fingers.

A bit dramatic? Sure. But the former mayor is right: In recent years, at a time when other cities would kill for what Tacoma already has, the infrastructure to deliver internet to residents as a public service, we seemed hell-bent on fumbling far and wide.

“We had the largest municipally owned telecommunications system in North America when Click Network was established,” Baarsma said. “There have been a lot of these stories over the years, of Tacoma disappearing. It’s frustrating. I am extremely proud of what we have achieved and I hope that we can achieve it in other areas, but my God, it is difficult to accept.

Let’s back up for a moment. As readers will remember, in early 2019 the Tacoma City Council voted to pursue a public-private partnership with Rainier Connect, which eventually resulted in a 20-year pact allowing the local provider to operate its Click municipal cable and internet service. It was a big uproar with a lot of public process. But beyond all the technical details, cost-benefit analyzes, and potential legal ramifications (more on that in a bit), the question the city grappled with was simple:

Should Tacoma use the cable and broadband network it built in the 1990s to go “all-in,” as it was characterized at the time, with TPU offering Internet service to residents like any other public service?

Or, given the potential costs and trade-offs, would it be better to partner with a local private provider to achieve the same goal, ensuring residents have options beyond the cable conglomerates while protecting the city and TPU’s bottom line in the process?

Tacoma chose the latter, for a number of complicated reasons, as we’ve already discussed. And at that time, the deal that was closed with Rainier Connect: a family business with over 100 years of history in Pierce County – was seen as a compromise at best. The city retained ownership of its network, while a local company with long ties to the community was able to do business using our network.

The problem? Now, just two years after Rainier Connect took over, the possible sale of the cable and Internet provider to a global infrastructure and asset company with no ties to Tacoma or Pierce County would appear to threaten the basis for that decision.

Sure, it’s not Comcast and it’s not Wave, but how different is it really? Throughout the lengthy process that led to Tacoma’s decision to enter into a public-private partnership with Rainier Connect, the city heard time and again that maintaining elements of local control was important to residents. We build the Click Network by Tacoma, not for a company in another part of the world to benefit.

Then there are the things we know now that we didn’t know then, which add insult to injury.

Beyond concerns that entering the Internet and television business would be a waste of money for the city, one of the main reasons Tacoma Public Utilities’ all-inclusive plan was abandoned came down to legality: Tacoma was being sued by a group of TPU Taxpayers who argued that it was illegal for TPU to subsidize Click’s television and Internet business, and that there was a legitimate fear that the city would lose.

But Tacoma didn’t lose. State appeals court ruled in favor of city in late 2019, months after Tacoma decided to partner with Rainier Connect. Although there was a possibility that the case would reach the state Supreme Court, that did not happen either. In essence, at least at the time, the all-in plan survived a legal challenge.

More recently, as recognition grows that the Internet has become an essential service, the state legislature has taken steps to make make city-owned internet networks easier. Last year, lawmakers passed a law giving utility districts and local municipalities the legal authority to sell broadband services directly to subscribers. This statewide push comes at the same time as the Biden Administration has made billions of federal dollars available for broadband expansion.

Hindsight is 20-20, but that hurts.

Fast forward to the present, and the question is: Where do we go from here? While the city technically has the authority to reject the deal through its agreement with Rainier Connect if it determines that the proposed sale would violate agreed terms and conditions, that seems an unlikely outcome barring major disclosures, particularly given the potential ramifications. to start over.

According to City of Tacoma spokeswoman Maria Lee, Rainier Connect has yet to file a formal written notice of the proposed sale. Once that happens, the clock will start ticking down on the city’s decision.

Until then, Tacomans must reflect on what might have been and the future.

Will the Palisade investment be bad for the future of Internet service in Tacoma? There’s no way to know. Can you blame Rainier Connect for wanting to sell, taking advantage of an excellent opportunity that President and CEO Brian Haynes says will be good for Rainier Connect’s network, customers and current employees? Of course, no. That’s business.

Still, when it comes to the Click Network, it’s hard not to feel like we dropped the ball, yet again.

“It is irritating. It hits you in the crop,” Baarsma said.

“And it’s a story that seems to be repeating itself in Tacoma.”