A Brief History of Direct Communications Cedar Valley

Or, How we built the most advanced fiber network in Utah right here in Eagle Mountain.
Direct Communications is a family owned and operated rural telecom provider with roots going back to 1951 when Lee May bought Rockland Telephone from T. H. Bell, future Secretary of Education under President Ronald Reagan. Lee ran the company until 1977 when he sold Rockland Telephone to his son Leonard May. Upon assuming ownership of Rockland Telephone, Leonard executed plant upgrades to the network to make Rockland Telephone a state of the art telephone network, including being the first independent telephone company to install a digital switch.
In the 1990’s Rockland Telephone changed its name to Direct Communications Rockland and along with its non-regulated affiliate, Direct Communications Star West, began to grow both vertically and horizontally. Direct Communications Star West first launched a satellite entertainment franchise in 1993. It then began to provide Internet Services in 1996 with deploying high speed broadband by 2000. Direct Communications Rockland acquired another telephone exchange in Southern Bear Lake County that moved its subscriber count to 1500.

Direct Communications involvement with the City of Eagle Mountain began in 2000 when Leonard May was introduced to the City’s Telecom System Administrator, Dan Valentine, at a telecommunications event. Direct then offered its expertise and help to the fledgling system as it endeavored to purchase a billing and accounting system. The relationship began to grow and as Direct Communications became involved with the City of Eagle Mountain, Direct could see the opportunities for business growth in this area.

Direct Communications began its official interest in acquiring the City of Eagle Mountain’s Municipal Telecom System in November, 2001. With the election of Mayor Kelvin Bailey it became clear that the City of Eagle Mountain was deeply interested in selling its Telecom System to a potential buyer. As a consequence of Direct Communications’ relationship it approached the City to make it clear that it was interested in evaluating if an acquisition would be mutually beneficial. Direct Communications and the City of Eagle Mountain entered into an intent to purchase agreement in November, 2001 and began the necessary regulatory and financial work to consummate the acquisition.

The first step was to come to a conclusion of what a fair market value for the system was. Per the City Ordinance this was necessary for the City to sell any utility. This was performed and a target price was established. After the target price was established the motion to sell the Telecom System was taken to the voters of Eagle Mountain who overwhelmingly, 96% in favor of, approved the sale to Direct Communications.

The next step was to identify exactly what assets comprised the Telecom System. As a consequence of the rapid growth and the bifurcated construction obligations between the City of Eagle Mountain and the Sub-Developers, the network records were lacking. Direct Communications contracted with a local telecom engineering company to evaluate the plant assets and asses its value. This process took the entire year of 2003.

In 2004 Direct Communications was comfortable approaching the Utah Public Service Commission seeking a Certificate of Convenience and Necessity that would allow it to be a regulated telecom provider in Eagle Mountain. Through the year of 2004 Direct filed its petition and was involved in various technical conferences and open hearings as the Utah Public Services Commission evaluated if the acquisition was in the public interest. The Utah Public Services Commission ruled that the acquisition was in the public interest and the new corporation, Direct Communications Cedar Valley, was set to begin operations once the Federal Communications Commission recognized it as an eligible telecommunications carrier.

Direct Communications Cedar Valley filed a docket to become a fully recognized eligible telecommunications carrier in the fall of 2004. As things frequently go with governmental agencies it took some time for the FCC to analyze the findings of the Utah PSC and the filings from both Qwest and Direct Communications. With the help of Utah’s Congressional Delegation, led by Senator Orrin Hatch, the FCC finally ruled in November, 2005 that Direct Communications Cedar Valley could serve as an eligible telecommunications carrier and awarded it the exchange area of Eagle Mountain. With that ruling the City of Eagle Mountain and Direct Communications chose to consummate the acquisition on 01 February, 2006 and on that day Direct Communications officially took ownership and responsibility for operations at Eagle Mountain.

At a signing ceremony with the city council and mayor present, Direct Communications presented the City of Eagle Mountain a check for $6.3 million for the purchase of the former Eagle Mountain Telecom network. For pictures of that event, see http://www.directcom.com/eaglemtn/images/community/telecom-sale/index.htm

One of the first positive steps Direct Communications took in bringing the local communications service in line with industry standards was to decrease DSL prices. The cost of building and maintaining the network would have driven the city steadily towards bankruptcy, and with no federal cost recovery structures in place, the city had to charge exorbitant prices to try recover costs on its network. Before DIRECT COMMUNICATIONS bought the network in 2006, residents who wanted DSL had to pay the city a $250 install fee and 1.5 Meg DSL service was $100 a month. DIRECT COMMUNICATIONS introduced a 256kb DSL package at a starting rate of $29.95 per month, with the installation fee being waived with a 1-year commitment. During 2006 DSL subscribership in Eagle Mountain more than doubled.

The most important change that has taken place since Direct Communications assumed ownership is the investment in new technology, and investment in the local network. Each year since 2006, DIRECT COMMUNICATIONS has invested several millions of dollars into the network plant. Immediately after the sale, DIRECT COMMUNICATIONS began significant network upgrades to ensure that the telecommunications network in Eagle Mountain was the most state of the art and robust network along the Wasatch Front. DIRECT COMMUNICATIONS began laying Fiber-to-the-home in most new sub-developments. With significant capital investment in fiber optic deployment to the customer’s premises, new redundant fiber optic routes to connect to all the major carriers in Salt Lake City and new electronic equipment, Direct Communications was ensuring that no other Wasatch Front community could provide the same connectivity as Eagle Mountain can.

Direct Communication’s state of the art FIBER OPTIC network offered 2 major advantages:
Bandwidth
Direct Communications has direct fiber optic connectivity to all the major carriers in Salt Lake City. This provides the option of multi-Gigabit connections. It is total fiber all the way.
Redundancy
By 2009, Direct Communications had deployed 3 separate fiber optic routes to connect the fiber optic network in Eagle Mountain to the world. This means that if one fiber optic route is cut, instantly the traffic will be seamlessly routed on one of the other two routes. This ensures the protection and integrity of a business’ telecommunications information.

2007 and 2008 were watershed years for the telecommunications industry as a whole, as more homes began to substitute traditional landline phone service with wireless service only. DIRECT COMMUNICATIONS management soon predicted that in order to compete effectively in the wake of industry trends, the most important service for the future was broadband, and specifically, how much bandwidth a company could deliver. These years were spent trying to evolve, build and prepare the network for massive future broadband deployment over fiber. DIRECT COMMUNICATIONS purchased a new digital switch in 2008, and invested several millions in new fiber optic cable and digital equipment. DIRECT COMMUNICATIONS also introduced their first real product bundle which included local phone, calling features, 350 minutes of long distance, and 3Mb DSL for $89.95. They also successfully petitioned the Utah PUC to lower residential phone prices in Eagle Mountain by $1, to $16.50 per line.

2009
Our efforts to position ourselves as the future of broadband technology began with an overhaul of our broadband offering in Utah, where we upgraded our packages to new speeds ranging from 3Mb to 20Mb. This was made possible by a positive development in the federal regulation of local telephone networks, along with the completion of major new fiber routes going out of Eagle Mountain, which allowed Direct Communications to offer the first true 20Mb connection to homes on fiber optic cable in Eagle Mountain. DIRECT COMMUNICATIONS was now even offering homes on copper speeds of up to 12Mb. The smallest broadband package on offer was now 3Mb.

Kip Wilson, general manager of the Utah property, also came up with a revolutionary idea of offering a bare-bones landline service with only 10 minutes of measured service, and unlimited 911 calling, which was branded e-phone, or emergency phone, for only $1 excluding taxes. Since the market was moving away from regular landline anyway, ephone was a way to remain competitive in the changing market, because people could have the safety of a landline, with the vital benefit of still paying bundled rates for our broadband service, which was the key to our long-term strategy of becoming the only real choice for serious broadband services. After seeing a couple of years of declining landline subscription, this year was a new dawn for Direct Communications Cedar Valley, and our market share steadily began to grow again.

In January 2009, Direct Communications led the rural telecom industry in the launch of a new low-cost landline choice, called emergency phone, or ephone, by Direct Communications. This was a regular landline, but without the unlimited calling. The service is free. All you pay is some of the taxes and fees associated with regular phone service.
What do I get with e-phone?
Unlimited 911 calling.
500 minutes incoming calling.
10 minutes local outgoing calling.
Unlimited calls to the phone office.
Directory assistance.
Operator Service.
Overage minutes are only 10c per minute. (Compare that your cell phone.)
Ability to make long-distance calls. (At regular long-distance rates.)

What are the benefits of e-phone?
Get the fastest broadband service in Eagle Mountain at a lower price because it’s in a bundle.
Peace of mind knowing you will have a phone that works in an emergency.
911 services will find your home.
A local 789 home phone number to give out when you don’t want to list your mobile phone number.
A safety phone for your kids and babysitter to use from your home.
Incoming calling minutes to offset high usage on your cell phone plan.

In Idaho, we expanded our state-wide fiber network, offering fiber-to-the-premises to retail and wholesale customers.

In April, we opened a new community center in Oxford, Idaho, with 10 computers and high-speed internet available for free public use, to add to our outreach program which already included another 10-computer community center in Paris, Idaho.

Direct Communications was featured in the September 2009 issue of Rural Telecom, the NTCA’s official industry publication, in an article titled “Emergency: How One Telco Turned The Tide With Young Customers,” explaining how we had met the needs of our customers and had grown our subscriber base with the ephone. This article led to a number of inquiries from other rural telcos all over the country wanting to know more about our offering.

2010
2010 was another year of growth in Eagle Mountain for Direct Communications, where we defied all landline industry loss trends and saw a growth of 14% in our landline subs. This was remarkable especially considering the stagnant housing market. This growth was accompanied by a 30% growth in the number of broadband subscribers.

Our priorities for the year were to win back market share by leveraging our superior fiber-optic broadband service, and migrate current customers to higher bandwidth.
We felt that to focus on our competitive advantage of being able to provide more bandwidth, we had to offer an improved online experience to the customer and show people how they could do more online with us versus our competitors, so we focused all our marketing on applications.

We felt we could increase broadband subscribers by becoming the primary source of entertainment in the home. Xbox was a perfect promotional item for that marketing strategy. Our unique competitive advantage is that as the only wire-line broadband provider in the area, we are able to provide the higher speeds and unlimited bandwidth needed for high definition video streaming. Our wireless competitors fear streaming—we needed to encourage it. Besides gaming systems, we later gave away Apple TV players and also began to offer ESPN3.com to our customers.
We also improved incentives on refer-a-friend program to $100 per referral, which tripled the number of customer referrals compared to the precious years.

Direct Communications was invited to present our story at several telecommunications industry events around the country and explain how we market emergency phone service. We presented at the Fall NTCA Conference in St Louis, and again at the Winter OPASTCO Conference in Miami, the Zone/ANPI Conference in Park City, and the Utah Rural Telecom Conference in St George. The most fascinating aspect of our story to out-of-state companies appeared to be the unique demographics of Utah County, and the overwhelming proportion of young families in the area.

In Utah we launched our first unlimited long distance offering, and an all-VOIP digital phone product.

We ventured in the new world of corporate social media, launching our first corporate blog, YouTube Channel and Facebook pages.

2011
Although this year was one of increased uncertainty for the rural telecommunications industry, with the FCC and federal administration threatening to cut major funding sources for rural areas under the guise of the national broadband plan, Direct Communications as a company made some important strides forward to strengthen our company, get to know our customers better, improve our products and offerings, focus on our core business, improve our competitive position in the markets we serve, and acquire new customers and revenue sources.

Overall, 2011 was a very good year. Our employees and customers should feel satisfied that we made a real difference to our communities, and improved the quality of life in both Idaho and Utah during 2011. We spent the year expanding our fiber network to the vital institutions that serve your rural areas, like schools, hospitals, city, county and government buildings, doctors offices, libraries, small and large businesses, and of course, homes.

In Eagle Mountain, the year began with some great publicity as Direct Communications was awarded the 2010 Best Business of the Year by the Lehi Area Chamber of Commerce. http://blog.directcom.com/2011/01/19/direct-communications-awarded-2010-best-business-of-the-year/

After months of work, Direct Communications was able to open the doors to their new building on Campus Drive in Eagle Mountain in February, 2011. Our grand opening was held in June, along with the ribbon cutting of the Eagle Mountain City business incubator program. The building has 8 “pods”, or office spaces, approximately 2500 square feet each. Direct Communications houses four of the pods, Beyond Limits Physical Therapy occupies one pod, and the Eagle Mountain City incubator program has the remaining three pods. After working in two separate areas for several years, Direct Communications was excited to have all of their employees at the same location. This new building signified an important coming-of-age for DCCV, which began as a start-up in the back of the fire station in 2006, and employees who remember all sharing a single bathroom and welcoming potential customers into the reception desk/storage area/stairwell, now had their own offices with hardwood trim—an unimaginable prospect 5 years ago. For more about the building see http://blog.directcom.com/2011/10/06/opening-ceremony-ribbon-cutting-for-new-direct-communications-building-in-eagle-mountain/

We began the year with a couple of new marketing initiatives to launch our new brand position and tagline of “faster streaming broadband” and started by giving away a year-long subscription to Netflix streaming to all new customers in January. In February we gave away a Roku streaming media player to all new customers. In June, to coincide with Pony Express Days, we gave away a Wii to new customers, which enjoyed about the same success as the Xbox promotion the previous year. All of these device promotions were designed to migrate customers towards using streaming video as their primary entertainment source, because that not only increases the value of our service from a commodity to a premium product, but also, once they become dependent on their internet for video entertainment purposes, they are less likely to leave us for a wireless competitor. We conducted a couple of customer survey during the year, and found that 66% of our customers said they now use online streaming of video as their primary entertainment source.

Also during June, we announced new broadband speeds for all customers, with our basic speed starting at 8Mb, and our fastest speed on offer at 50Mb. This was designed around our main wireless competitors offerings, which had 7Mb as their top speed. Of course, by the end of the year they had also reacted and changed their packages to advertise 10Mb and 15Mb speeds.

After Pony Express Days we cut back on advertising until December, when we rolled out a Kindle Fire as a Christmas promotion, which emphasized making the internet fun—since the new Kindle could stream video, download apps, and play games. The Kindle promotion ended up being our most successful marketing campaign of 2011.

However, 2011 was an interesting year for marketing with the maturing of social media, which for the first time played an important part of our integrated marketing, and opened up a new target media market for us, since we could now target internet customers living only in Eagle Mountain and we began spending a significant portion of our advertising budget on facebook ads.
We began the year by splitting our facebook page into two separate pages for Idaho and Utah, to make it more relevant to each market. Acquiring fans was a slow process at the beginning, until we learned the only sure way to entice more customers to our page was with online promotions for facebook fans. By the end of the year we had over 500 customers on our Eagle Mountain facebook page. See http://blog.directcom.com/2011/06/14/first-winner-of-directcom-monthly-facebook-fan-contest/
Navigating social media has been a learning experience for us, and we have had to learn to take the good with the bad, as dissatisfied customers also like to use our page as a soapbox, but overall it has been a positive experience for both the company and our customers, and we actually implemented a lot of good suggestions made by customers on our page through our interactions this year.
We presented on the subject of social media at the annual Utah Rural Telephone Association meeting in St George.

Direct Communications Cedar Valley’s own Brenda Caldwell was named Utah Valley’s Raddest Receptionist by Utah Valley BusinessQ Magazine, and Brenda was featured in the Fall 2011 issue. http://blog.directcom.com/2011/09/29/directcoms-brenda-caldwell-named-utah-valleys-raddest-receptionist/

2011 turned out to be a great year to be offering our customers ESPN3, because BYU football, which many of our customers follow, went independent largely on an ESPN broadcasting contract, and so most of their games were streamed online on ESPN3 this year.

We were also kept very busy this year working with the three major national mobile phone providers to construct and deliver fiber optic service to most of the cell phone towers in the area, so that they could offer more data to their customers, and we also now wholesale broadband service to most of our competitors in the area. Without an extensive fiber optic network, our rural economies would not be able to function in this information age. As our tagline claims, we are the future of broadband technology in the rural areas we serve.

2012

In Eagle Mountain, Direct Communications Cedar Valley began an ambitious plan to blanket Eagle Mountain with Wi-Fi Coverage. Direct Communications began rolling out Wi-Fi coverage at select sites in Eagle Mountain in conjunction with Pony Express Days celebrations in the city. The company deployed three towers before Pony Express Days, so that residents could enjoy internet coverage at the Rodeo grounds, Amphitheater, and carnival at Nolan Park. The end plan was to deploy about 40 Wi-Fi access points at strategic sites in Eagle Mountain so that residents in Eagle Mountain would be able to connect to the internet no matter where they were in the city. These sites would be directly connected to our fiber optic network. Directcom deployed about 6 sites in 2012, with the remaining scheduled to be installed in 2013.
The plan to cover the City with Wi-Fi first emerged at the urging of Eagle Mountain City officials, who felt this would put Eagle Mountain in a strong position for economic development. Not only would Eagle Mountain have the premiere fiber-optic network in the state, but also the first city-wide Wi-Fi coverage in Utah.
This Wi-Fi coverage was not intended to be a replacement for existing home fiber-optic service in Eagle Mountain. This was only intended to be offered as a value-added service for residents who already subscribe to home internet service.

Published Industry Articles about Direct Communications: “Hooked on Broadband” – pg 12, May 2012 issue of Rural Telecom.

2013

Direct Communications again donated to all the local schools in Eagle Mountain, as part of the company’s commitment to be involved in the community. As the local broadband service provider, Direct Communications believes that supporting local education is a way to both reinforce the important message that good education and better broadband service go hand in hand, and both are essential elements to enhancing the quality of life for all in Eagle Mountain.
We also sponsoring the new Frontier Middle School Hope Squad Program.

For more on our giving to local education, see our blog for articles such as http://blog.directcom.com/2013/12/06/direct-communications-donates-to-westlake-high-school-2013-edition/

2013 Annual Giving to Eagle Mountain Schools

Pony Express Elementary

$500

Hidden Hollow Elementary

$500

Eagle Valley Elementary

$500

Rockwell Charter High School

$500

Mountain Trails Elementary

$500

Frontier Middle School

$1000

Ranches Academy

$500

Westlake High School

$6000

Published Industry Articles about Direct Communications: “Making Your Internet Service Unique, Better and Special” pg 39, May 2013 issue of Rural Telecom.

In Eagle Mountain, we upgraded every school in the Alpine School District in Eagle Mountain to a 100Mb fiber connection, and built a 1Gigabit connection to the new Frontier Middle School in Eagle Mountain.

One of the major challenges we continued to face as a small company with a limited budget, was keeping up with fiber construction in all of the new subdivision growth in Eagle Mountain, as well as continuing to upgrade older subdivisions from copper to fiber lines. These dual demands kept our construction crews, and accountants very busy, as well as the sales and support staff. Over the past several years, we have typically been able to upgrade about 300 older homes a year to fiber, as well as run fiber to all the new subdivisions being built. During 2013 the company upgraded Cedar Trails, Sage Valley, and the Eagle Landing subdivisions from Copper to Fiber lines.

We updated our installation policy so that any new customer could sign up for Directcom Broadband service without a contract by simply paying a $75 broadband installation fee up front. However, in examining all the service orders over the course of the year, we found almost 99% of customers in Eagle Mountain still preferred service with a 1-year contract and $0 upfront, so we continued to offer a contract-term option.

A wireless competitor, Rapidwave, sold out to our largest competitor, Digis, only for the former owners to reemerge a few months later as a retreaded WISP called Innovative Air.

In another interesting change in the competitive environment, one of the developers of a low-end condo complex in the City Center decided to deploy their own wireless ISP (with coax feeding each apartment) and force all renters to subscribe to their sub-par service as part of the rental contract.

2014
No Contracts

In Utah, we again updated our installation policy to an even shorter 6-month contract term with free installation, a 30-day no risk guarantee, and only a $25 early termination fee if customers wanted to disconnect before the 6 month term was completed. We continued to offer a no contract option with a $75 install fee. http://blog.directcom.com/2014/02/02/no-contract-required/

A Direct Communications team presented at the annual Utah Rural Telecom Association conference in March, where we explained to the local industry leaders and Utah public utilities commission why we are spending every resource upgrading all of our customers from copper to Fiber Optic Cable. Mining all of our customer data for the past few years clearly indicated that fiber customers were generally more satisfied with their internet service than DSL customers, even in cases where they were receiving equivalent speeds.

We partnered with the Utah Education Network to bring a 1 Gig fiber Ethernet connections to each school in Eagle Mountain.

The city center fiber to the home upgrade multi-year project was completed at the end of 2014, although a few individual customer cutovers to fiber extended into the 2015 year. All subdivisions in the city center were now 100% fiber to the home.

 

During the 2014-2015 school year, Direct Communications donated over $7,000 to the schools in Eagle Mountain, as part of the company’s commitment to be involved in the community. As the local broadband service provider, Direct Communications believes that supporting local education is a way to reinforce the important message that better broadband service and a good education go hand in hand, and both are essential elements to enhancing the quality of life for all in Eagle Mountain. To read what the local schools are saying about Direct Communications involvement in education in Eagle Mountain, visit  http://blog.directcom.com/2014/11/11/eagle-mountain-schools-receive-sponsorship-from-local-internet-provider-direct-communications/

2015 

1 Gig Speeds

More speed was the keyword for this year. We launched a true 1 Gig residential package, although the introductory price was high at $209. The year started with a huge speed boost for all Internet customers, as everyone’s  internet speed was automatically upgraded for free in January 2015. For fiber customers, connection speeds automatically tripled for no extra cost, with our starting speed increasing from 8Mb to 30Mb for $29.95. DSL customers also saw a slight speed increase.  Read more at http://directcom.com/eaglemtn/faster-new-speeds-for-2015/

We also introduced a new 10Mb speed at at $19 price point on the fiber network as a fighter package to compete with cheaper wireless offerings. However, interest in this was relatively low as the market has clearly moved beyond 10Mbps.

Netflix in Super-HD and Ultra-HD

Direct Communications faster streaming broadband got even better, due to  DirectCom becoming a Netflix SuperHD Partner, with a Netflix server hosted on our extended fiber network in partnership with the Utah Fiber Network.

This meant that Directcom customers in Eagle Mountain would be able to watch movies and TV shows in Super HD and Ultra HD on  supported devices.  Customers would  need to subscribe to at least 8Mb/s download for HD quality and 25 megabits per second or higher for UltraHD. Readmore at http://directcom.com/eaglemtn/directcom-is-now-a-netflix-superhd-partner/

Core Router Upgrade

During the month of May, Directcom techs worked over several nights installing a new Core Network Router. While this did cause some inconvenient temporary outages for a few customers last month, the good news is this new Cisco core router will more than triple the network processing capacity from a previous 4 million packets per second to over 12 million packets per second. If that doesn’t impress you, know that Direct Communications can now handle over 120 Gig per second on the fiber network in Eagle Mountain.

All In-House Tech Support

Directcom achieved a long-worked on goal of bringing tech support at all levels in-house, from the level one initial call to the level 3-customer residence visit, in order to provide a better integrated, and faster, smoother, support experience for Internet customers. Tech Support calls began to all be answered in our own office, rather than offsite by a call center, and transferred seamlessly between departments via phone or online chat, for customers convenience.  See  http://directcom.com/eaglemtn/meet-faleshia-one-of-your-new-in-house-tech-support-specialists/ for an example of our new local tech hires.

Fiber to the Home Upgrades around Nolan Park Area

The Chimney Rock network area around Nolan Park became the latest Fiberhood in Eagle Mountain, where older copper loops and drops were  upgraded to all new Fiber to the Home, bringing 1 Gigabit speeds and more reliable Internet service for residents in the Windhover, Cold Springs, Sundance, Crittenden Corner, Red Rock Ranch, Rockwell Village, and Castle Rock neighborhoods. The fiber construction project began in April 2015 and was completed at the end of Feb 2016.

2016

Fiber to the home upgrade to Silverlake subdivison

Fiber to Kiowa

Office flood