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Telephone co-op to distribute $2.8 million

Above: Three-year-old Elena Harmsen was hesitant to cuddle up to Grover but her mom, Erica, was there to ease the anxiety of meeting the famous Sesame Street character Wednesday at the annual Paul Bunyan Telephone Cooperative celebration. Pioneer Photos/Monte Draper

Paul Bunyan Telephone, Bemidji's telecommunications provider of voice, video and data, will disburse $2.8 million later this year in patronage payments.

The payout will begin in August and amounts to half the capital credits for 1998 and 20 percent of 2008, Dave Schultz, Paul Bunyan Telephone chief financial officer, announced Wednesday at the cooperative's annual meeting.

"2008 was another significant year," Schultz said, adding that net margin for the year was $6.94 million, which kept pace with 2007's $6.965 million despite the economy.

He also reported that service connections have risen 33 percent over five years, from 42,500 in 2004 to 56,500 in 2008, he said.

"We've had strong numbers over the years, and we see continued success," Schultz said.

The strong net margin has allowed Paul Bunyan Telephone to have favorable treatment from lenders, such as $38 million it borrowed from the U.S. Agriculture Department's Rural Development Administration. This is the second year it has used the line of credit from the loan.

General Manager Paul Freude said the cooperative's goal is to replace copper wire with fiber, thus boosting data transmission speed, but that it now has new technology for compression of the copper wires, enabling those wires to carry higher data transmission and allowing the cooperative to delay fiber optics for those wires.

"The compression of copper wires works within a mile of our consumer service stations," Freude said.

He also announced that by later this year, Paul Bunyan television capability should be available in 100 percent of its service area, and nearly 100 percent in its Blackduck subsidiary area.

Land-line telephone services has slipped, he said, accounting at one time for 65 percent of revenues but only 32 percent in 2008. He predicted that within a decade, wireless and especially telephone over Internet will be the standard.

Also, within a decade, consumers of cable television will receive programs over the Internet by their choice.

Wednesday was also the cooperative's annual fish fry open house. A Paul Bunyan Telephone official estimated that nearly 6,000 people were served walleye, prepared by the Bemidji Fire Department.

In cooperative elections, incumbent District 4 director Jim Tarbell won re-election unopposed with 2,037 votes. In District 5, incumbent Bruce Blanchard was ousted by Randy Friske. Friske ended with 1,564 votes while Blanchard had 1,258 votes.