History of Paul Bunyan Telephone Cooperative

THE BEGINNING, 1950-1959

“Ray, a telephone cooperative is just not going to work up here!” REA Deputy Administrator to Ray Poxleitner, 1950.

Many residents didn’t even have the chance to get telephone service, they were too far away from a “city”. Those who could get service, received it from their township and they had to share the line with up to 9 other customers. That was the reality of telephone service in Northern Minnesota back in the late 1940’s. But the winds of change were in the air. In 1949, the United States Congress enacted legislation to add a new program to improve rural telephone service in the U.S.

On February 28, 1950 at the Bemidji Armory, M.B. Taylor, a court agent who had years earlier helped organize Beltrami Electric Cooperative, called the first public organizational meeting to explain the new telephone program under the direction of the Rural Telephone Administration (RTA) through the Rural Electric Administration (REA). This day marked the beginning of what would become Paul Bunyan Telephone, the name chosen for this new business in June, 1950.

Following the RTA procedures as presented at the meeting, a group of nine men from various rural areas around Bemidji were nominated as temporary directors of this new organization. These directors worked endlessly to sell memberships, which at $40 each were not cheap ($40 in 1950 is equivalent to about $400 today). Plus, there were field engineers, consultants from Washington D.C., and administration officials all scrutinizing the feasibility of a telephone cooperative in rural Minnesota. Yet after all the meetings and memberships, the RTA staff did not believe that a telephone cooperative could work in the area. It did not look good. On January 29, 1952, Paul Bunyan Telephone incorporated bylaws to establish the cooperative, yet it’s future was very much in doubt.

Frustrated at having invested an incredible amount of time and their own money, the Board members turned to the recently elected young Senator from Minnesota, Hubert Humphrey for help. This was the turning point. Humphrey invited the Board to a meeting with officials in Washington D.C. The meeting was long and arduous, but in the end Senator Humphrey told the deputy administrator that he had faith in the board members and strongly suggested getting the initial loan processed without further delay.

A telegram from Senator Hubert H. Humphrey stating an REA loan approval for Paul Bunyan Telephone.

There was one more requirement to meet though. The Board had to operate an existing telephone system before the loan could be approved. Negotiations to purchase the Kelliher Telephone Company resulted in a purchase price of $12,000. The Board did not have the kind of money lying around, so they turned to Beltrami Electric Cooperative and Security State Bank in Bemidji. Security State and Beltrami Electric agreed to loan the Cooperative money, but not before each board member signed a personal mortgage on their property for security. This final commitment ensured that Paul Bunyan Cooperative would indeed become reality.

In early June of 1954, the Kelliher Telephone Company and Hendrickson Township Telephone’s system in Hubbard County were purchased by Paul Bunyan Telephone Cooperative. This would prove to be the first of 45 systems that would be purchased and upgraded. Days later, on June 14, 1954, the first REA Telephone Program Loan was approved. The years and countless hours of effort had finally paid off.

With the REA loan in hand, the cooperative started to come together. On February 22, 1955, nearly 5 years to the day of the first organizational meeting, Paul Bunyan Telephone opened its first business office at 207 4th Street in Bemidji. That same year, eight-party service was offered to Kelliher and Hendrickson Township. The cooperative also purchased telephone systems in Becida, Hart Lake, Waskish, Saum, Shotley, and Woodrow townships. The first full year of service ended with a total of 208 members.

The remainder of the decade saw more telephone company and township system acquisitions. With more members each year, the Cooperative needed more space to operate and Paul Bunyan Telephone moved to a new headquarters at 207 4th Street in Bemidji in 1958. The cooperative’s operations would remain there for the next 16 years.

The decade ended with great optimism. Pitted against all odds, the founding fathers of Paul Bunyan Telephone had succeeded in establishing a local telephone cooperative, even though government officials had told them “a telephone cooperative is just not going to work up here”.

1960-1969

This would prove to be the decade where the foundation of Paul Bunyan Telephone was built. There would be more growth, the beginning of underground cable, and several advances in telephone technology.

In March of 1961, the reach of telephone service in rural Northern Minnesota was extended to Northome and Squaw Lake, as these exchanges were established into the cooperative. By November of 1962, three more areas had gained access to the telephone with the addition of Turtle River, Red Lake, and Solway. All 5 exchanges continue to thrive today.

Then, in 1964, an idea of improving the quality of telephone service to cooperative members emerged, put the lines underground. Since the beginning of Paul Bunyan Telephone, telephone lines ran above ground on telephone poles. While this delivered the service most of the time, nasty Minnesota weather played havoc on the lines and caused numerous outages. Putting the lines underground would eliminate any weather concerns and greatly improve the consistency of service. No longer could a good wind knock down a pole or a squirrel chew through the line. The innovative idea was tried first in September, 1964, when the recently added Inger-Wirt exchange was created with an underground delivery system. Today, 99.9% of the cooperative is served by underground cable.

With the quality of service issues being resolved, the Cooperative turned towards improving the service itself by giving each member their own line. This was a very big deal, since all members shared a line. The decision was made to phase the cooperatives exchanges into one party service. It was a large undertaking that would take 10 years and a large financial commitment. In 1968, the recently purchased Laporte exchange and Becida were the first to get one-party service. By 1978, all of the cooperative would have their own line.

1970-1979

Technology advances, further growth, and a new building. Sound familiar? That was the 1970’s at Paul Bunyan Telephone and why not? Do what works.

The tenth exchange was added to the cooperative after more new technology entered the scene. Paul Bunyan had already served the Red Lake exchange, but residents of Ponemah could not join the cooperative because the lake was in the way. That was until microwave. In 1970, the cooperative used microwave equipment to deliver telephone service across Red Lake to Ponemah.

More and more members were joining the cooperative as more progress was made in going underground and converting to one-party service. The business headquarters were maximized and it was time for another move. In 1974, Paul Bunyan Telephone Headquarters were moved to the former Beltrami Electric building at 301 America Avenue. This new location would be the grounds of further growth, prosperity, and services for 2 decades.

The 1970’s also proved to be the start of changes in the way telephone service was regulated by the government. Monopoly providers dominated the local, long distance, and telephone equipment market. Consumers had no choice in providers. The monopoly system was set up out of necessity to get service to all Americans and it worked. Now, Americans wanted options. The process of providing competition started in 1976, when the Federal Communications Commission (FCC) passed a ruling that allowed consumers to buy their own phones. Phone leasing from your telephone company was no longer mandatory. This would be the first of many legal rulings that would give the public more options for telephone services.

The decade ended with the cooperative stronger than ever, but there was even more growth and new technology on the horizon that would catapult Paul Bunyan Telephone into the next generation of telephone services.

1980-1989

By now, the cooperative understood that constant change was a part of the telephone way of life. What started out as 10 party service had been integrated to bring each member their own lines, members no longer were required to lease their equipment from the coop, and there was a lot more change to come.

In 1980, radio mobile phones and paging services were introduced. At the time, these 2 new products did not draw much interest, but it was a hint of the communication possibilities to come. Radio mobile phones lead to the inception of wireless phone service and paging services are still offered today.

The cooperative continued to grow, purchasing the Aure Telephone Cooperative in 1982 which became part of the Puposky exchange. Three years later, the coop would make its largest purchase to date, the Deer River Telephone Company which had been established in 1910 and was owned by the Giles family. This one purchase nearly doubled the size of the cooperative’s customers, though by law it remained a separate telephone company until the entire purchase was paid for, which was completed in 1997. Deer River would remain the largest telephone exchange for Paul Bunyan until expansion into Bemidji at the end of the century.

As the 1980’s drew to a close, a new product was introduced that would revolutionize the potential of a telecommunication network. Fiber optics. Fiber optic lines could carry a lot more information over the network and a lot faster. At the time the big benefit was that the network was not filled to capacity with phone calls. The endless amounts of capacity that fiber optics offered looked promising. In 1988, the first fiber optic cables were ran from Bemidji to Kelliher. In just four years, all of Paul Bunyan Telephone’s exchanges would be connected by fiber. Little did anyone know then that the fiber optics they were laying would allow for next generation of telecommunication services.

1990-1999

It would not be overstating the facts to say that the 1990’s would turn out to be the decade that transformed the way the world communicates. Cellular phones, satellite television, and the advent of the Internet were on the way.

Before all the new technology though, the cooperative would have to endure adversity. On April 26, 1990 a fire nearly destroyed the headquarters on 3rd Street. Started in the early morning by a electrical spark, the fire was spotted quickly and the building was salvaged. The next months were spent cleaning up the damage, yet service continued uninterrupted.

Later that same year, wireless phone service became a reality when Paul Bunyan Telephone helped create Cellular 2000. Cellular services would revolutionize communication, as it provided a way for consumers to stay in touch with the world while away from a landline phone. Like many new products or services, Cellular service started out expensive. But within 10 years, prices had dropped and wireless phones were common. Paul Bunyan Telephone discontinued its relationship as an agent of Cellular 2000 on December 31, 2005.

In 1993, the cooperative continued to diversify when it established it’s own directory publishing company, Pinnacle Publishing. In the beginning, Pinnacle published 16 directories for independent telephone companies in the midwest, including Minnesota Gold, the official directory of Paul Bunyan Telephone. In just 8 short years, Pinnacle Publishing went from an upstart to an industry leader in directory publishing when, in 2001, it merged with Independent Publishing in St. Cloud. Pinnacle Publishing now publishes over 130 telephone directories, employs over 90, and is based in the Bemidji Technology Park.

With 2 new services added and even more on the way, it was time for another move. On January 11, 1995 the cooperative bid farewell to downtown Bemidji and moved into a brand new cooperative headquarters in the newly created Bemidji Technology Park, a joint venture of Paul Bunyan Telephone and Beltrami Electric.

The new headquarters featured two more new services, Direct Broadcast Satellite TV and Videoconferencing. Satellite Television gave rural residents the opportunity to receive television services they could not otherwise receive. Paul Bunyan was an initial investor in Rural Vision, a local DBS provider and it would soon expand the amount of home entertainment available for the cooperative’s members. Rural Vision would eventually be sold to Pegasus in August of 1998, giving the cooperative an exceptional return on the investment that would allow for the unprecedented growth that was to come.

The decade was just half over and already the cooperative had withstood adversity, added 4 new services, and moved into a brand new headquarters. But the cooperative did not stop there. There was another communication service on the way that would come to change daily life throughout the world. It was the Internet and locally, Paul Bunyan Telephone would lead the way. Beginning in 1996, Paul Bunyan Telephone offered local Internet access to members through the newly formed Paul Bunyan Net. Paul Bunyan Net would soon turn into the regional leader in reliable Internet access and would continue to put Paul Bunyan on the cutting edge of technology.

While busy introducing new services into the marketplace, the entire landscape of telecommunications was about to change with the Telecommunications Act of 1996. The Act, passed by the United States Congress, allowed for competition in local telephone service. No longer was the cooperative restricted to boundaries determined by the government. It was clear where the cooperative was headed.

From the beginning in 1950, Bemidji had always been a part of the cooperative. Yet, for 46 years, Paul Bunyan did not have the option of offering its services to its residents. That all changed in 1996. The Telecommunications Act paved the way for the cooperative to bring residents of Bemidji into the cooperative. In November of 1998, the Connect Bemidji project was introduced. The project would result in a brand new telecommunications network for the Bemidji exchange, one capable of offering telephone, High Speed Internet, and digital television services. Construction of this new network to Bemidji started in 1999 and as the world ushered in a new century, Paul Bunyan Telephone was on the verge of unprecedented growth.

2000-PRESENT

Cellular phones, the Internet, Satellite Television - brand new just years earlier, now commonplace. But these services were only the beginning and the new decade promised potential never dreamed of even 10 years earlier.

In January of 2000, local telephone service and high speed Internet services were made available to the first areas of the Connect Bemidji project. For the first time, there was a choice in local telephone service providers and many selected to join the cooperative.

While expanding in Bemidji, the year 2000 also marked the beginning of the most extensive network upgrade in Paul Bunyan’s history. The upgrades, made possible by the increased membership from the Connect Bemidji project, allowed for the cooperative to bring advanced services like High Speed Internet and digital television services to rural areas. The upgrades now completed give us the ability to deliver High Speed Internet service out to all members of the cooperative. PBTV is currently available to over 90% of our membership and more will gain access and upgrades continue in the next several years.

On March 6, 2001, Paul Bunyan Telephone announced that it would soon begin offering the latest in television technology, Paul Bunyan Television (PBTV). PBTV would give members access to over 200 channels of all digital entertainment and would allow for local and long distance telephone services, television services, and Internet services to come on one bill and from one source. On June 1, 2001, members in the Solway exchange were the first to be offered PBTV services. PBTV is now in over 11,500 homes and is available to some members in each exchange in the cooperative.

In September 2003, Paul Bunyan Telephone began its second expansion project, this time heading east to Cohasset. The Connect Cohasset project is now completed and gives all those locations within the City of Cohasset the opportunity to join the cooperative and receive our advanced services.

2005 saw expansion begin to Grand Rapids and within just two construction season our first all fiber optic network expansion project was completed. All locations within the City of Grand Rapids now have services available and can join the cooperative with service provided over one of the first all fiber optic networks in the state!

2006 was landmark year for the cooperative, as the final locations in the large Bemidji telephone exchange were reached and Paul Bunyan Telephone now serves the entire exchange (previous 751, 755, or 759 prefix phone numbers). The project was one of the largest such undertakings in the country and has been extremely well received. In January, our first retail office was also opened in the Central Square Mall, Grand Rapids. This office was closed on February 16, 2008 to move into a larger facility.

As the cooperative continues to thrive, we continue to reach out to bring our advanced technology to more locations. 2007 calls for expansion to begin in the Lake George and Cass Lake Telephone Exchanges and further expansion north of the City of Cohasset.

While further expansion is expected, no specific plans exist past the current year due to the many factors that fluctuate annually and can affect such decisions. Our cooperative will continue to consider reaching out to new areas where it is economically viable. 2008 plans will not be finalized until next April.

On February 18, 2008 a new, expanded office was opened in the Grand Square on Pokegama Ave S in Grand Rapids to better serve our growing membership in Cohasset, LaPrairie, and Grand Rapids. In addition to more space, the office features expanded office hours and interactive displays of Paul Bunyan Television services.

Today, Paul Bunyan Telephone Cooperative serves over 3,500 square miles of Northern Minnesota with local telephone service, Paul Bunyan Long Distance, Internet services through Paul Bunyan Net, wireless telephone service, and all digital television services through Paul Bunyan Television.