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Case Study BEK

If you’re going to take the time to do something, take the time to do it well. This has been the mantra for one of North Dakota's original cooperatives, BEK Communications. Being owned by your customers creates the perfect incentive to provide top-notch telecommunication services - even in one of the least densely populated areas of the country. Formed in 1952, BEK quickly merged with or acquired upwards of 20 small phone entities in south central North Dakota. In 1996, the company acquired several more exchanges when USWEST (now Qwest) pulled out of several rural exchanges. Today, BEK serves about 18,000 people in an area slightly smaller than the state of Massachusetts.

In the mid-1990s, BEK decided to build a fiber backbone that would ultimately deliver all of its customers with bundled fiber to the home services. Early FTTH deployment started by 2004 and continues today, with about 70 percent of its customers already served. The FTTH architecture should be completed within the next few years. Meanwhile, BEK's CEO, Derrick Bulawa, keeps a watchful eye on the network's progress. "I've been the CEO here for five years, one month, 14 days and four hours," says Bulawa. "You have to keep track of a good thing - and I believe we have a good thing. We offer our customers normal telephone, digital television and broadband services. Our basic low-end Internet service on fiber today is 12 Mbits/sec downstream and 1 Mbit/sec upstream, with options for up to 30 Mbits/sec." That's pretty decent service when one considers that member density for BEK's service area is about 0.95 members per square mile. Why would a service provider in such a sparsely populated area opt for fiber over legacy copper? "When you look at either copper or fiber, both pose their own set of challenges in rural areas," explains Bulawa. "But if you're going to build it with last-mile loop lengths as long as 20 miles and want it to support advanced services for the next 30 to 50 years, you have to choose glass. That's been our board's philosophy. The ever-increasing cost of copper is also making fiber more attractive today." Being completely rural, BEK has no terrestrial competitors, and rural cooperatives have very different goals and objectives compared to other providers. "We are simply expected to build long-term services for our members," says Bulawa, "and most of our debt is provided directly from the RUS (Rural Utilities Service), which required sound long-term investments. That generally prevents a lot of the uncertainties faced by other providers." Last year, BEK received a grant to expand its service territory into an underserved area outside of Bismarck. It enabled BEK to expand services in a contiguous manner to about 1000 new customers. As Bulawa suggests, "It's less complex to let the city expand toward us as opposed to dealing with all the regulatory issues involved with expanding toward the city." BEK is a relatively new member in the FTTH Council, despite being involved with fiber deployments for some time. As the council evolved, the importance of being a part of the process in terms of FTTH quickly made a believer out of BEK. "We found that the council kept us informed," says Bulawa. "It's important to keep up with best practices, latest technologies, and information. Although we probably look a lot like the other 580 rural phone companies across the country, we all operate a bit differently. We need interaction with other companies and organizations that face challenges similar to ours. So we take a pretty progressive posture to keep our members served with the most advance services available."