The Emporia Gazette

May 28, 2012

• Headlines
• Sports
• Forums
• Weather
• Classifieds

• Help
• Log in
• Home

• E-mail story
• Post a comment
• iPod friendly version

If the cast looks familiar, that’s because it is.

The former Valu-Line telecommunications team – Steve Sauder, Bobbie Agler, Rick Tidwell, and Stormy Supiran – have reunited in another communications-related venture, Valu-Net LLC.

They joked among themselves recently, as they compared themselves to an aging rock band going out for a reunion tour.

This time, though, they’re involving other members of the community as investors in the venture that will bring fiber optic broadband service to Emporia.

It won’t be an ordinary “broadband,” which commonly refers to Internet service at any speed above 1.5 megabytes.

“Everyone says they provide broadband these days,” Tidwell said. Valu-Net will start installing a fiber optic network in Emporia that will deliver internet, phone and television. “The difference with our network is that we can provide multiple gigabytes of bandwidth in both directions simultaneously, while all the other networks – cable, telecommunications, wireless – can at best only provide about 10 megabytes or less consistently, and only in one direction at that speed.”

The Valu-Net team previously had been the core administration for the original Valu-Line of Kansas Inc., phone company.

Sauder had started the company in 1982. Agler, a certified public accountant, became the company’s financial advisor and, in 1998, after retiring from his own accounting firm, became its chief financial officer.

Tidwell combined efforts with Sauder in 1984 to create a company that sold telephone equipment and long-distance service. In 1985 Tidwell left his job as an Emporia firefighter to join Valu-Line full-time.

Supiran came on board in 1985, adding his considerable expertise and experience as a switch technician and programmer; in fact, he’d written much of the program Valu-Line had purchased for its long-distance billing.

Valu-Line merged in 1998 with Birch Telecom and grew quickly, as it attracted investments from Wall Street and expanded into many major cities nationwide.

Although the local team eventually left Birch, Birch survived major changes in federal regulations and two bankruptcy proceedings. It continues to employ about 100 people in its Emporia office.

Serious business

The local men obviously enjoy working together again to meet the challenges of a new project, but they’re deadly serious about creating a solid company that provides a much-needed, high-quality broadband service here.

They consider better broadband a necessity for efficient communications transmissions, as the demand burgeons for more and more bandwidth to run Internet, television and phone services. Without higher broadband, transmission speeds will continue to slow and sometimes cease temporarily on wireless and copper-based services.

To keep speeds zipping for consumers, the company is building an all fiber optic-based network. Unlike traditional means of transmitting data, fiber networks allow high-speed data transmission through a single fiber strand that can carry tremendous amounts of data at once and is considerably more reliable than traditional copper wire-based services.

As the telecommunications industry continued to grow and evolve over the past 10 years, it became apparent to the Valu-Line veterans that the current wireless and cable services here were being pushed to their limits, as demand outpaced the availability of bandwidth to carry the communications.

“(Copper-based networks) can only run so fast,” Sauder said. “They’re fast out-running their capabilities. … We saw this need continuing to grow in the past few years, with no one stepping up to serve.”

The team and the local investors have decided to take on that role, by investing their money in an effort to keep Emporia businesses and individuals at the front of the broadband-technology curve.

Sauder compared the participation of local investors to those investors who were part of the “Committee of 50,” a group formed decades ago to create an economic development fund to benefit Emporia and its citizens.

“We’re investing in ourselves, but this hopefully will turn around (dividends) for investors,” he said.

The new company is expected to create about 30 full-time jobs, in addition to the contract-crew jobs needed to build the fiber network.

Valu-Net’s owners are planning to fill the broadband gap, through private investments and term loans. The initial investment for the new company is many times more than the $150,000 needed to start up Valu-Line.

“This is a little larger project,” Sauder said, using understatement as he compared the two companies.

Serious fundraising for Valu-Net began in July, and approximately $5.5 million already has been raised to begin the project. By the time it is complete and running throughout the city, Agler estimated, the cost will be a little more than $14 million “to do Emporia right.”

Sauder wanted to focus on investments from within the community and more than 90 percent of the funds have come from Emporians or former residents interested in strengthening the company and the city as well.

“This is a good opportunity for Emporia to re-invest in itself,” Sauder said. “… We hope to return some wealth to the community this way.”

Caught in

the middle

Because of Emporia’s size, it was being overlooked as broadband services moved into metropolitan and small rural areas.

“The AT&Ts of the world are not providing the service here. … The rate of return was enormously better in Dallas, Texas,” Sauder said, to illustrate the situation. “From a financial perspective, it made no sense (for major companies) to invest in small towns.”

The federal government was willing to make the investment in the small rural areas.

An estimated $100 million federal stimulus grant was awarded to one company to build broadband services in western Kansas, he said.

“What we’re doing,” Sauder said, “Madison has already done.”

Madison, just south of Lyon County, received a $3.5 million federal stimulus grant to combine with a $3.5 million in federal loan money to build a $7 million system that covers 200 square miles and serves about 500 people.

In the meantime, towns the size of Emporia were being overlooked and left behind, from technology and business standpoints.

“This is a necessity for economic development,” Tidwell said. “It became painfully apparent that nobody else was going to build this for us.”

Doing the

homework

Considerable research and planning went into the project long before it could begin.

The men got in touch with another former Birch employee, Brad Moline, who had started Allo Communications in Nebraska. Moline had adopted the fiber-optic business model early, and the Valu-Net team saw that much could be learned from the way Allo had built its business.

“Fortunately, Allo was willing to share their strategy,” Tidwell said.

Tidwell and Sauder put together a plan and took it to Agler, who studied the information and saw financial promise.

“This plan could work,” Agler said.

Tidwell devoted much of 2011 to laying the foundation for Valu-Net, which will soon settle into newly remodeled offices in the Sunset Plaza complex, 2914 W. Highway 50. Regulatory approvals, application filings and an interconnection agreement with AT&T all were part of preliminary tasks to complete before anything else could be addressed.

They also needed to decide whether to affiliate with another company or to go out on their own.

“Somewhere along the line, I said to Rick, ‘If we had Stormy involved, we could do this ourselves,’” Sauder said.

Supiran, who was semi-retired, agreed to come back to Emporia and join in the effort.

The result is Valu-Net, an independent company that will use fiber-optic cable to provide service throughout the city. It has a contract to use Westar poles when needed; laying of the main underground cable already is well underway, through an agreement with Kansas Fiber Network.

The commitment to work with KFN was made “before we raised a dime,” Sauder said.

KFN already was building a state-wide fiber network to connect a number of independent telephone companies and intended to come to Emporia with its fiber network lines. Linking Valu-Net through its network and covering the city was a plus for both companies.

Fast and reliable

Internet bandwidth issues and service interruptions will be almost non-existent because fiber networks are built differently from copper wire or wireless systems.

Underground conduit for the service has been installed through the downtown area and out to 12th Avenue to the company’s headquarters. Fiber service is expected to be available to customers in the downtown area this summer.

“We have to literally install fiber to every building that we’re serving, which will obviously take some time,” Tidwell said.

The men anticipate the resulting service will be worth the effort and expense to bring what Tidwell describes as virtually unlimited broadband to Emporia.

Customers, whether business or residential, will notice a markedly faster and more-consistent service than they’ve had before from their telephone, video or Internet services.

“The quality of what we provide will be next-to-none,” Tidwell said.

The men mentioned applications for long-distance learning, live streaming, and interactive video functions among the uses that will improve markedly. Broadband availability for medical uses, such as transmitting X-rays to out-of-town hospitals and physicians, could be life-saving.

“Our physicians tell us that today transmitting an X-ray can be a 20-minute job; it should be seconds,” Tidwell said.

With fiber, it will be, for all types of users.

“No matter what they have now, we can provide it better and faster,” Supiran said.

He illustrated fiber optic’s speed by comparing data transmission capabilities to water flow: a megabyte of data, for example, could compare to a water faucet; 10 megabytes would be greater, like water from a garden hose; 100 megabytes would more resemble the flow from a fire hose.

And the comparison of water flow to the gigabyte Valu-Net will provide?

“Then,” Supiran said, “a guy is like standing at the water tower and getting drenched.”

That speedy volume of service will be available consistently to “each and every customer in Emporia.”

“The beauty of the fiber is that it’s terribly reliable, provides unlimited upload and download speed, and is relatively simple to build and maintain,” Tidwell said.