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Tacoma’s Click Expands—And Utility Customers, Taxpayers Might Pay The Price

October 10, 2016

Blue and red fibre optical cablesAs the Coalition for the New Economy reported this past June, Click, Tacoma’s city-owned cable and Internet system “has never managed to pay for itself.” Unfortunately, that fact didn’t stop city officials from voting 3-2 in September to expand Click by allowing the sale of Internet and phone service directly to customers. (Click now only sells to Internet service providers that then sell to customers.)

Who will pay for this expansion and what will happen if Click continues to lose money?

According to the Tacoma News Tribune, the city’s electricity customers or taxpayers will pay the price—even if they don’t get cable, Internet, or phone from Click.  (Only 113,000 of 170,000 Tacoma Public Utilities (TPU) customers actually can subscribe to Click.)

Legal experts, and some TPU board members, object to that arrangement.

The News Tribune reported this weekend that, “before Tacoma Public Utilities board members voted on Click Cable TV’s expansion … former TPU attorney Mark Bubenik sent a letter threatening to sue if electric ratepayers weren’t held harmless.” Bubenik said state law and the city’s charter prohibit TPU “from making gifts and loans of public funds, and from using power revenues to pay for anything but the operating expenses required to supply utility services to customers.” Bubenik also told The News Tribune that “utility funds are sacred and they have limited use only for the betterment of the utility and reducing rates, and the television, internet and phone service are outside the city’s electric utility’s basic function.”

TPU Board Chairman Mark Patterson and board member Monique Trudnowski agreed with Bubenik.

Attorney Dave Jurca also agrees with Bubenik. He told The News Tribune, “It seems pretty clear to me that this is not a legal use of ratepayer funds. Providing cable and Internet service is a nice thing. … but that doesn’t have much to do with the proper function of Tacoma Power, of the electric utility providing service for people to use in their homes, and the best illustration of that is the … people who are going to be paying for this TV and internet service that they can’t even access.”

Other board members disagreed and those voices prevailed. According to The News Tribune, the plan passed last month authorizes “Click to get between $6 million and $10 million per year” from TPU electric revenues “for operations, maintenance, taxes, debt and capital costs — including the cost of upgrading the system to gigabit Internet service speeds …” Bubenik plans to take his opposition to the city council this month when it votes on Click’s expansion. If he’s not successful, he said he would consider a lawsuit.

Additionally, according to The News Tribune, “No one expects that a diversified Click will operate in the black …” And what happens in that case? According to TPU board member Trudnowski, it eventually could mean the city has to cover Click shortfalls with general fund revenues.