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FCC and SDPUC officials visit Philip Livestock Auction in state tour

From the 1960s when four-party telephone lines still existed in rural South Dakota, from less than 10 years ago when very few ranchers thought of buying cattle at a salesbarn except in person, now there is broadband Internet.

On August 25, federal and state commissioners visited the Philip Livestock Auction “to see what a rural livestock auction that is wired into Internet business was like,” said George Strandell. Strandell, general manager for Golden West Telecommunications (GWTC), was part of the “off the cuff conversations” concerning modern Internet usage by the rural livestock business. The commissioners were impressed with the broadband business capabilities used by Jerry Roseth at his Philip Livestock Auction.

Jonathan Adelstein was the visiting Federal Communications Commissioner. He is one of five such commissioners and is from South Dakota. Bob Sahr and Dustin Johnson were the two visiting South Dakota Public Utilities Commissioners. The cavalcade of commissioners and staff members made a whirlwind of stops that included Philip, Sioux Falls, Mitchell, Groton, Kennebec, Pierre, Cheyenne River Indian Reservation and Deadwood. The businesses visited varied from a livestock sales barn doing Internet sales, a family-owned telephone company, a tribal owned telephone company, and Deadwood businesses that are promoting tourism via the web.

GWTC has already implemented some major advances in technology over the years, according to Strandell. In the 1970s it offered private phone lines, rather than rural multi-party lines. In the late 1980s, it went to digital switches which greatly improved the quality of switching services through a software-driven technology. Many customer services are now done from a centralized location and can often be accomplished while still on the phone with the customer. A “fiber-optic backbone” is in place and Digital Subscriber Lines (DSL) can branch from it to individual customers. “Everything is becoming faster and more high-tech, even though we are in a geographically challenged area,” said Strandell. The company, under the leadership of Board President Richard Baye, now employees 200 people and serves 36,000 access lines through its many subsidiaries.

The Philip Livestock Auction, owned by Jerry Roseth, began using Internet sales in January of 2002. A potential internet bidder must be registered with DVAuction, Inc., which includes a credit check and approval. A non-bidder may view the livestock sales without being registered. Buyers’ registrations must be done for each auction market, but are good indefinitely at that location.

The software designed by DVAuction, based in Lincoln, NE, broadcasts the audio and video selling on the floor with a delay of just one second. This allows remote bidding by buyers during the actual cattle sale.

“Bidding by Internet is becoming more and more popular,” said Carrie Lurz of Philip Livestock Auction. “We currently have 193 registered bidders and average 20-40 viewers per auction. We have far more viewers at the larger sales. Internet bidding gives the consignor access to more buyers, and the more buyers bidding on your cattle the better.”

Sellers pay 15 cents per head to be broadcast over the Internet. A buyer over the Internet pays $1.50 per head commission. These costs are computed into the selling price and into the seller’s check.

DVAuction set up the camera, other equipment and website in only one day. Lurz assists Internet bidders in registration and she communicates the bids as they happen to the auctioneers. Most of the other Internet work is done by Peggy Martin. “Ever since we started using the system, we have not had any problems,” said Lurz.

Federal policy decisions are being made that will affect South Dakota’s telecommunications, and thereby, the state’s economy. Some of those key issues include: intercarrier compensation reform; Universal Service changes; and Voice-over-Internet Protocol (VOIP).

“South Dakota has some terrific examples of entrepreneurs applying the most recent telecommunications technology to their businesses in order to compete in the global economy,” said FCC Commissioner Adelstein. “Congress placed a high priority on rural concerns in the Telecommunications Act.”

“The purpose of the trip is to highlight the importance of high-speed Internet to rural America and bring that perspective to the ongoing federal telecommunications policy debate,” Commissioner Sahr, leading the tour, stated.