From Phones to Fiber, Arvig Took Risks, But Ended Up on the Leading Edge

Leaders reflect on the company’s past and remain hopeful about the future

Even in the early days of Arvig’s history, owners Royale and Eleanor Arvigؙ—who bought the Perham Telephone Company in 1950—understood that if their business was to succeed, they’d have to take risks, embrace new technology and find ways to grow.

Together, their vision was clear: to build the best, most trouble-free private telephone company in the nation. Little did they know, the telephone was just the beginning. Not only would the company eventually bear the family name, the following decades would see major evolution and expansion into television, internet and business services under the leadership of future generations of the Arvig family.

Royale and Eleanor put their principles into practice right away, beginning with work to upgrade and modernize their newly-purchased telephone system. That would take time, investment and hard work, but the Arvigs weren’t afraid to make improvements and take on challenges from the start.

Growing and surviving
Rural telephone lines owned and maintained by area farmers were soon purchased, and poles and aerial cables were installed to replace lines loosely strung from fencepost to fencepost. From there, the company grew its territory, with the acquisition of other telephone companies in surrounding communities.

“I think we’ve had a history of growth from the day we started,” said Allen Arvig, CEO and President of the Board of Directors for Arvig. “When we had an opportunity, we looked at it.”

Allen, the second generation in the Arvig family and son of Royale and Eleanor, spoke to attendees gathered for the recent annual meeting of Perham’s Economic Development Authority. Allen joined son, David, Vice President and COO, and Dave Schornack, Director of Business Development & Sales, to talk about Arvig’s past, its present projects and future strategy.

Arvig was only the third telephone company in the nation to transition to underground cable lines in 1955, and by 1965, was one of the first in the area to convert from “party line” to private line service. Early on, the Arvigs took risks, showing they weren’t afraid to move to new innovations if it meant a better way to deliver dependable service.

“I think the handwriting was on the wall even back then,” Allen said. “My family believed if you weren’t going to grow, you weren’t going to survive. And we’ve just kept that going.”

Taking risks
In about 1989 or 1990, fiber was just being introduced in the telecommunications industry. When Arvig was presented with an opportunity to test what would become an early fiber-to-the-home platform, the company took a chance on the new technology, at a time when fiber was very costly to provide and largely untested.

In partnership with a company known today as Calix, a fiber network was built from New York Mills to the Rush Lake area.

“We had about 110 homes that participated, and that ran for years,” Allen said.  “That was kind of the forerunner of the fiber to the home that you have today.”

Allen credits the company’s progressive growth approach to having involved and engaged employees. Within Arvig’s leadership today—as in the past—are people who serve on state and national industry organizations and actively apply what they learn, then implement those ideas into the company.

Fiber in focus
In about 2005, Arvig’s strategy shifted to fiber. Fiber networks were still expensive to build, and companies weren’t seeing much return on investment at that time, as the technology was slow to be adopted on a large scale.

“In 2005, we were starting to look at how we can diversify, how we can expand,” Schornack said. “As you all know, we’re losing access lines, telephone lines. Same with (traditional cable TV) video customers. So, how do we survive long term? One of our strategies is fiber.”

In 2010, a growth opportunity in the fiber business presented itself, and it had a promising goal. In partnership with the Zayo company, Arvig built a fiber network ring that brought the company’s reach into the major population centers of Minneapolis, St. Paul, St. Cloud and Rochester.

“That really gave us the first foothold to expand outside of our local area,” Schornack said. “It gave us the first real exposure to fiber, which is kind of where we want to go long term.”

Moving forward
Arvig—which now has nearly 900 employees—now operates in more than half the counties in Minnesota in a service area of more than 9,000 miles. The company serves more than 700 medical facilities, 300 schools and has more than 46,000 internet customers.

Arvig also and has a presence in 16 states through a growing wireless backhaul business—transporting data via wireless towers from an end user to a node in a major network.

“As we build out this fiber … we’re working with a lot of wireless companies today … providing them backhaul or providing them fiber, and we’re doing that all over the area. We have (more than 500) towers under contract.”

The company has diversified through the years, with the acquisition of Time Communications, a call answering service; All State Communications, a security service, and by developing its own in-house construction division; and digital marketing company, Arvig Media.

“Our main driving force is still the telecom,” Schornack said. “We’re spread out all over the region. It’s kind of like a spider web. We’ve got spots here and there, but over time, we’re going to fill in those holes and over the next five or 10 years, I think we’re going to have a tremendous network.”

Arvig recently purchased portions of Windstream’s excess out-of-territory fiber network in Minnesota. The additional network adds more than 1,600 fiber route miles and grows Arvig’s network to more than 10,000 miles.

Not just growing, but improving
Even as the company grows, however, the focus isn’t only on expanding, it’s also on maintaining and improving existing network infrastructure. Underway currently are efforts to bring more services and faster internet speeds to rural service areas.

In 2017, Arvig elected to accept a share of funding from the FCC’s Alternative Connect America Cost Model program—or A-CAM—to invest in rural broadband expansion in Minnesota for the next 10 years.

“As we do that, the speeds are going to be quite a bit better,” David Arvig said.

In the first year of the program, upgrade efforts focused on Ada, moved to Pelican Rapids in 2018 and will center on Walker, Nevis and other areas this year. The goal is to improve internet speeds and bring better services to those areas, including TV, phone and business services.

On the internet side, the goal is to bring broadband speeds of 25Mbps download and 3Mbps upload. The need is definitely there, now and into the future.

“People are using a lot more, mostly for entertainment and video streaming,” David said. “There’s a lot more 4K content out there. Just one 4K stream is 25Mb.”

From the hand-crank telephone to high-speed fiber, Arvig has shown throughout its history that by taking risks, investing wisely and taking the lead with new technology, a company can grow, thrive and create for itself a promising future.

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