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Republican gubernatorial candidate Tom Emmer asks a question during a briefing Tuesday on the telecommunications industry at Paul Bunyan Telephone Cooperative. Behind him, from left, are House 2B GOP candidate Dave Hancock and Senate 4 Republican candidate John Carlson. Pioneer Photo/Monte Draper

GOP gubernatorial candidate Emmer brushes up on telcos

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No rally, no press conference, no crowds. This time Republican gubernatorial candidate Tom Emmer came to Bemidji to learn.

"I want to make sure people in outstate Minnesota know that this candidate is interested in specific issues to outstate Minnesota," Emmer said Tuesday as he spent an hour with Paul Bunyan Telephone Cooperative officials.

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He learned about rural telcos and the need for broadband Internet to reach every home in rural Minnesota. He also learned about Paul Bunyan Telephone's leading-edge push to bring broadband to remote areas, including Ash River at Lake Kabetogama.

"Our philosophy is less government," Emmer said in an interview. "Our philosophy is giving people the opportunity to realize their economic potential. That's what will drive prosperity. But when you come out and talk with businesses like Paul Bunyan, you've got to let them know that as governor, if you're ever elected governor, this is not about party. This is about how do we make sure that greater Minnesota has access" to broadband Internet.

Paul Bunyan Telephone General Manager Paul Freude said the cooperative begun in 1952 with 300 customers now serves 29,000 customers in a 4,000 square mile area. It acquired Blackduck Telephone about two years ago, and along with it about 100 customers at Ash River about 92 miles north.

Last year, Paul Bunyan extended fiber optics cable to homeowners' premises, and by doing so, extended fiber optics to Big Fork, Littlefork and International Falls.

"Japan is touted as having the greatest telecommunications network in the world? They don't, we do," Emmer said, referring to comments by Randy Young of the Minnesota Telecom Alliance that Japan is totally wired in the cities, but has yet to bring broadband to rural Japan.

"It's amazing when you look at this (service) map and see what this company has done," Emmer added. "When I saw how they just expanded to 100 customers in Ash River, one of the most remote locations in northeastern Minnesota, it gets amazing. And these guys are always taking a chance.

"This is one place where government is important," he said, "to make sure that the little guys can compete; make sure that the little guys can provide the competition for service that is necessary. Bemidji may not be where it is today if it hadn't been as far as communications if Paul Bunyan had not been here."

Freude said the cooperative is now seeking a $30 million grant/loan from the $7 billion included in the federal economic stimulus bill for extending broadband services throughout the nation. The cooperative will know by Oct. 1 if it is successful, with work planned to connect remote areas near Park Rapids, south of Grand Rapids and to Coleraine.

Funding would come through Rural Utilities Service under the U.S. Department of Agriculture.

"The underlying network is needs to be there to create jobs (in the community) and to connect it to the world," Freude said of bringing broadband to the fringes of its competitive service area.

"When you read the story of this company, it really is the culture of this company has been about forward-thinking, taking risk, making sure they build out services and be ahead of the ball game," Emmer said.

Paul Bunyan Telephone has seen a growth spurt since the mid-1990s, Freude said, growing from 40 employees in 1998 to 125 today. The cooperative grew when competition was allowed, with the firm going into Bemidji, bringing full service over a four-year period and competing with Qwest.

"We now have more customers in our competitive service area than in our incumbent area," he said. All new construction is bringing fiber to the premise, and it is working to do the same with current customers.

"The goal of the National Broadband Plan is good," Freude said. "We need broadband brought to every citizen of the United States. But how we get there is what concerns us."

He told Emmer that Congress is considering shifting proceeds from the Universal Service Fee on telephone bills to Internet subsidies.

"That support fee is used by rural telcos to bring service to hard-to-reach rural areas," he said. The worry is that by shifting the funding, rural telcos won't have the ability to provide remote service at comparable rates to urban subscribers.

To reflect the true costs of providing services, without the Universal Service Fee, a rural monthly telephone bill might be $60 to $80 a month more, putting broadband Internet out of reach, Young said.

"Those dollars are at risk," Freude said.

There is also an effort to end the excise tax on phone bills, an access fee charged to long-distance companies who access the local network to complete their calls. Big providers hope to end the service, which they say is only a few cents per customer.

But Freude said the access charges and Universal Service Fee amount to 30 percent of total revenues for Paul Bunyan Telephone.

"Local service rates would go up dramatically if we lose those two," Freude said.

Emmer said he learned more Tuesday than in any legislative hearing in St. Paul, and plans to continue meeting with businesses in rural Minnesota.

"I'm doing this now to start the relationship and make sure people know that if we are elected governor of this state, it's for everybody in this state and that we have to be very in tune with not just talking about how we keep funding programs in this state but how we make sure that companies like Paul Bunyan are able to exist and continue to grow and provide the services they are providing to places where most people never would have taken the risk as there was no incentive to do it," said Emmer.

He plans to connect rural and metro Minnesota, hoping to avoid the usual rural versus metro split.

"Way too often we have seen in this state people from the metro area, without even realizing it, pretty much focus on the metro area," the state representative from Delano said. "They don't understand ... as their issues of the day are paramount to them; they're the center of their own universe."

Running for governor, Emmer says, "you've got to make sure people understand this is a big state and there are issues all over this state and greater Minnesota needs to be recognized as equal to every other part of the state."

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Pioneer staff reports
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