In the case of muni systems, which are not-for-profit enterprises, one measure of “success” is defined as the level of their “take rate” – that is, the percentage of potential subscribers who are offered the service that actually do subscribe. Nationwide, the take rates for retail municipal systems after one to four years of operation averages 54 percent. This is much higher than larger incumbent service provider take rates, and is also well above the typical FTTH business plan usually requiring a 30-40 percent take rate to “break even” with payback periods.
Tacoma Offering Tips to Seattle
Seattle's new mayor continues to impress me as he makes good on his pledge to build a publicly owned fiber-optic network in the City. He has just met with the mayor of Tacoma to discuss lessons learned from the Tacoma Click! network.
We have previously discussed Click!, an HFC network run by Tacoma's public utility. Here are some additional benefits from the article:
Since its approval in 1997, Tacoma’s hybrid fiber coaxial network has, among other things, ushered in a cable television service, offered customers three high-speed retail Internet service providers, enhanced Tacoma Power’s electrical system and created a communications network among government institutions. In turn, the network and its programs have drastically reduced market rates for cable TV and Internet subscribers; saved local governments about $700,000 in annual expenses; and created several promising projects, such as “smart meters” that can gauge utility consumption electronically and “pay as you go” account options for electricity customers, she said.
I was glad to see the article noting the many differences between when Tacoma built their network and the present situation in which Seattle finds itself. Seattle certainly has bigger difficulties than Tacoma did, but they should continue examining their options to determine if the community should build its own network.
A local blogger was more pessimistic after reading the article, but one of the comments on the post bears repeating:
I have Comcast in Tacoma and all I know is since there is competition down here Comcast is about half the cost as it is in Seattle. They give you a rate good for a year. When your year is up you call up and just say Click! and bam back down you go. A friend in Seattle once called Comcast with both of our bills with similar service and mentioned my price and they said I must live in Tacoma and they wouldn't match the price.
Photo used under creative commons license from flickr.

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