February 09, 2003

Hometown meets high-tech at local phone company

   By Dave Richardson
   Times Herald-Record
   drichardson@th-record.com
   
   Warwick – Call it the little phone company that could.
   WVT Communications, formerly Warwick Valley Telephone Co., is not just alive after 100 years in business, but thriving in ways its founders could never have imagined.
   There's a gargantuan gap between the wooden telephones and plug-in switchboards of yesteryear and the racks of blank-faced digital switches and routers that make WVT hum today.
   To fully understand the profound changes the company has gone through since its inception, take a quick look back in time.
   In 1902, a group of 25 residents, fed up with Warwick's by-then antiquated telephone system – a lone public telephone in a drugstore on the village's dusty, unpaved Main Street – decided to start their own telephone company.
   Records of those early days are few, and living memories fewer. Writings of John J. Beattie, an old-time Warwickian and legendary storyteller now deceased, describe the drugstore phone as a relay of sorts for long-distance calls coming by a direct wire from the New York City Telephone Company to another phone installed by Warwick's fledgling phone company.
   One Harry Talcutt, a part-time drugstore clerk, would hop from phone to phone, getting the dish, passing it on, picking up the retort and passing it back, Beattie wrote. This went on until the two companies agreed to a direct connection, cutting poor Harry out of the loop, but propelling him into a later job in the telephone business.
   The company soon graduated to an actual operator who earned $10 a month, running a classic plug-in switchboard connecting 134 customers in the village with 66 more rural party lines.
   
   Making an impact
   The impact of this newfangled communication system on Warwick was enormous.
   Local historian Richard Hull described the budding telephone system as a glue binding Warwick together, creating a greater sense of community and helping to solidify the town's identity.
   "In the old days, people connected at places of businesses or at church," Hull said. "The telephone began to intensify and broaden communication in a more secular way.
   "It also cemented the many little communities that make up Warwick, and contributed to a sense of community and place," Hull added.
   Though it's something most people take for granted, that impact continues to be felt.
   Today, WVT has more than 30,000 customers from northern New Jersey to Middletown, all hooked up to banks of digital switching equipment, high-speed Internet routers and fiber-optic digital video networks that would likely have been dismissed as Buck Rogers voodoo claptrap by that old-time operator.
   The company has been and continues to be fiercely independent – one of just a few dozen independent telephone companies left in the state. It's an elite membership in a rapidly shrinking club, as more and more independents throw in the towel, selling out to the big Bells.
   "That's just not a direction the board wants to go," says Lynn Pike, WVT's CEO. "The board and I want WVT to stay an independent telephone company. So, in order to remain a viable company, we've got to look at being more and more innovative."
   And innovative the company is. It was one of the first to go all-digital in the late 1980s. It branched out into cellular service, and offered its own long-distance service.
   
   Branching out
   By 1995, WVT had caught the Internet wave. The company launched its own Internet service, Warwick Online, offering customers dial-up access to the World Wide Web. At the time, it was one of just a handful of telephone companies nationwide doing the same thing.
   "We tried to get the AOLs and the Prodigys to serve us up here," says Brenda Schadt, a company vice president. "They didn't want to do it, so we did it ourselves."
   Shortly after the launch, WVT again took a pioneering chance, offering ISDN service – then the state of the art in Internet access – to its customers. It was the first in the region to introduce DSL, the next generation of high-speed access, in 1998.
   Now the company is breaking ground again with the launch of its own digital television system. The technology behind the system is a wonder, allowing WVT's fiber-optic network to deliver 145 channels of crystal-clear digital TV, high-speed Internet and telephone service over existing copper wires in customers' homes, all through one little box hooked up to the TV set.
   "Three years ago, everyone said the copper wire was going the way of the dinosaur," Pike says. "This was probably the most risky investment WVT ever made."
   So far, that investment is paying off, but competition from other digital TV providers – notably, industry giant Cablevision – looms, and the company has yet to obtain a townwide franchise to deliver its digital TV service in Warwick .
   Keith Scarzafava, WVT's director of network technology, is optimistic.
   "We've always been first to the punch in this area, the first to do things like this," Scarzafava says. "The fact we've been in the Internet and broad-band business for years makes it that much easier."
   Scarzafava sees things like video-on-demand and interactive, multimedia content as likely near-future innovations.
   Buck Rogers would be jealous.
   
   A hometown approach
   Another major component in WVT's success and longevity is the loyalty and longevity of its staff. Turnover is low, and the average employee has been on the job in the neighborhood of 18 years.
   Schadt has been with the company 41 years. Like many of WVT's 120-plus employees, the company gave her her first job, and she never left.
   "My first job was as an operator," Schadt says. "I started before I even graduated from high school. For me, it was the small, hometown company close to home. They never forgot the company is like a family."
   That hometown feel plays a part in WVT's marketing as well.
   "We try to play on that," Pike says. "There's the customer service aspect to that. People can talk to us, not to someone in Atlanta."
   Some concessions to the modern world have had to be made, though. In 2001, driven by technical evolution that made its in-house operator services obsolete, the company farmed out the service to a third-party company.
   The move eliminated 14 jobs, and ended a nearly 100-year tradition of local, in-house service for things like assisted dialing and directory assistance.
   "That was a traumatic experience," Pike says. "In the past, the company had never had a layoff. We were one of the last independent telephone companies to outsource that operation. It was not painless."
   And even though the future bristles with new challenges, new and improved techno wizardry to master and stiff competition, Pike is confident WVT will survive, and thrive.
   The formula must be working. WVT's stock, traded on the NASDAQ, closed at $66.89 a share Friday, in stark contrast to some other once-notable telecommunication mainstays, now not so notable.
   Pike makes it clear the company hasn't forgotten its humble roots.
   "Our bread and butter is still just plain-old telephone service," he says.