The David vs. Goliath story is being re-told in Tacoma. The city’s power company has become a broadband fiber optic Internet and cable TV service provider, known as “Click! Network.”
Click! has become the target of criticism and competitive spending by national broadband cable TV provider AT&T.
Click! Network General Manager Dana Toulson says she isn’t paranoid – she believes AT&T’s goal is to keep Click! from replicating elsewhere, especially now that Click! is showing a profit.
Tacoma has the largest municipal telecommunica-tions system in the nation. Click! re-ceives calls from cities throughout the nation that are interested in enter-ing the cable and high-speed Internet access business and that has AT&T worried.
Toulson gave us 10 minutes for 14 questions about the world of high-speed Internet access and drawing a line in the sand with Goliath.
Q: What is Click! Network doing that is shaking AT&T’s world?
A: We must be doing something right! Seriously, the reason they’re coming after us is because we are a model for other cities. What we’re doing is connecting electric utility needs with tele-communications needs right at people’s doorsteps.
That’s a model that really had them scared because it represents serious competition in the long run. They want to nip it in the bud.
Q: Getting high speed Internet access can be complicated to set up. Broadband needs to be as easy as plugging in a TV. Are you trying to make it simple for Tacomans to get online?
A: Right now it really is. There are two ways to get high speed Internet access. One is through the cable modem that uses our RF (radio frequency) cable network and the other is through our fiber connection that uses fiber optics.
The cable modems are virtually plug-n-play. It’s as easy as getting your cable TV installed. And once it’s installed, it’s always on.
Q: What about Click! for corporate use?
A: Getting the fiber to your building is a little more difficult. It takes about 15 days if your building is already lit. If not, if we have to construct it, it takes about a month.
But fiber is right for a lot of companies with heavy Internet usage. We provide speeds up to an OC48. That’s equivalent to 32,000 simultaneous phone calls.
Q: Some city in Iowa may say, “Hey, we’re about the same size as Tacoma. We want to do this.”
What kind of hurdles did you encounter and how long did it take to get the concept of it through the munic-ipal council?
A: We started looking at it in 1995 for the utilities own use. We had consultants look at it and they’re the ones that came up with a “telecommunications” for broadband application.
Then we looked at a business study and took that to the council in 1997. Then it took another six months or so to get a franchise with the city.
We started building in 1998. It took about two years to build 670 miles.
Q: What services does Click! offer?
A: We offer about five stories, but the one most know is retail cable TV. We offer WorldGate Internet over TV. You can surf the Net directly from a wireless keyboard on your TV.
We also offer the cable modem service and broadband service to our wholesale and retail customers.
For the most part our real purpose was to provide telecommunication services to Tacoma Power. That enables the utility to monitor its substations and figure out when there is an outage and respond, sometimes instantaneously, to that outage.
Q: It’s the tough question every technology company gets: How’s your rev-enue doing?
A: We’re at the break-even point in terms of cash flow, which means our revenues are covering our expenses before depreciation.
Q: There’s talk that electricity rate-payers are paying to keep the system operating. Is that true?
A: There have been start-up costs associated with any new business. Since we’re now at the break-even point, we’re starting to send money Tacoma Power’s way.
Eventually the plan is this network of cable TV and broadband services will provide incremental revenue to the utility to pay for a network they were going to build anyway.
Q: This network was designed to monitor the meters on the use of electricity. Has that system been fully deployed?
A: We’re using the system now for improved electricity reliability and that’s something that you can’t see in dollar savings, but you do see it in terms of fewer outages.
We’re also pilot testing new meters that will allow us to remotely read electric meters, which will save time.
Q: Any opportunities for local software developers to write apps to go along with that whole power regulation digitizing process?
A: Oh, great opportunity because we’re connecting the meter to a home gateway. That will allow us to apply “smart home” applications in the home.
Q: Examples?
A: A developer could write applications to turn back a homeowners thermostat. The meters will allow people to go on the web and see what their usage is real-time and compare real-time prices.
Then they can use that to say, “Hmmm. If the price gets above .06 cents per kilowatt hour, I want to turn my water heater down.” You can program that yourself to have it happen automatically.
Q: Have you sat in a room together and talked with AT&T?
A: Well, we don’t talk to AT&T. No CEO summits.
Q: What do you think they’ve done to make their service better as a consequence of Click! being a competitive element?
A: They’ve invested heavily in rebuilding their network here in Tacoma. They offer prices for their cable TV that is much less than those areas where competition doesn’t exist.
Q: What other cities across the country have been in contact with Click to learn your secrets?
A: Ashland, Oregon now has a system up. Eugene. Provo, Utah. Alameda, California.
Pretty much tier two and three cities, those that aren’t served very well by the primary provider.
Q: What new services are around the corner?
A: We’re looking at new technology that will give you bandwidth on demand so you can just call up and get the capacity you need for just the time you need it.
We’ve just launched 119 new digital channels on our cable offering, plus a lot of pay-per-view. We now have 45 digital music channels.
We’ve got a lot of programming and a lot of positive response.
The web site for Click is at www.click-network.com. A full audio interview with Toulson and Click! Network can be heard at www.webtalkguys.com.
Dana Greenlee writes about technology every Friday in the Index. WebTalkGuys, which features tech-nology news and interviews, can be heard Saturdays from 11 a.m. to noon on KLAY 1180 AM in the Tacoma/Seattle area. Past show and interviews are also Webcast via the Internet at:
www.webtalkguys.com.