It All Started with 3 Alarm Customers

Written By M. K. Rhee

Communications Staff Writer

 

Back in 1966 who in the small town of Big Pine, California, (population 960) ever thought that some day their long distance calls would be handled by anyone other than AT&T, let alone  handled by a local youngster then in fifth grade of elementary school.

Throughout grade school and high school Steve Rapp was encouraged and coached by his teacher Tom McGuigan.  McGuigan helped Steve develop his skills in electronics and science.  “I was pretty bad in my regular school studies, Mr. McGuigan helped me with special projects that interested me” Rapp said.  McGuigan even went as far as to allow Steve to work on his home TV set on several occasions.  Rapp remembers “I knew just a little about what I was doing, I’m really lucky I didn’t ruin his TV, and maybe I did, but he never said”.

McGuigan helped Steve with all kinds of projects from making movies with a 8MM camera he loaned Steve to operating a tractor in his back yard garden.

McGuigan presided as a board member with the Big Pine  American Legion Auxiliary, whose auditorium and meeting rooms were being broken into and vandalized on a regular basis.  “He asked me if I could install an alarm system on the building, I eagerly responded yes” Rapp said.  Big Pine was never the same, the alarm sounded more than once in the middle of the night, at trucks as they drove by.  Although since the system did put a stop to the break-in’s and vandalism, two other local merchants followed  with orders for alarm systems to protect their businesses.

After Rapp graduated from high school he attended a one year computer trade school in Fresno California for which he received a scholarship to attend while in high school.  After graduating from this trade school with honors he returned to Bishop, a nearby community, were he purchased a new business, then less than one year old,  known as Sierra Security.  The company at the time of purchase had thirty customers.  Rapp changed the name of the company to Sierra Security Systems, and in several years the number of customers grew to over three hundred.

During those early days Rapp also supplemented his income by providing computer programming service under contract to such companies as Union Carbide Corporation and local businesses.

The alarm company continued to grow throughout a vast region encompassing the deserts of southern and central California.  During these years the deregulation of the telecommunications industry in the US was just beginning to get started.  Rapp was getting many requests to install telephone systems, not only from his security alarm customer base but from many others that saw his service fleet traveling the highways.  In 1982 Rapp formed a new company known as Combined Telecommunication Services (CTS), the name stemmed from the “combined labor force” with Sierra Security Systems.  When times were slow the installers and service personnel always had plenty to do with the summation of the two companies and their duties.

At the same time Steve was pursuing the day to day functions of growing his newly formed telephone interconnect company two retired CONTEL employees were also forming their own interconnect company.  One of these gentlemen was John Maler (see article this issue), who had previously been the main sales force behind Continental Telephone’s marketing in the Eastern Sierra.  Through a mutual friend Steve approached Malaer to join-up and become the marketing arm of Combined Telecommunications Services, with Rapp providing the technical and established labor force.

Combined Telecommunications and its customer base grew very quickly during those early days of deregulation. One reason for the extreme growth was that in the early days the prices charged by the only competition “the phone company” were really out of the practical range of competitive prices, so it was easy for Combined to offer a better product for a smaller price.

Deregulation at this time only involved customer premise equipment.  The deregulation of long distance services was still being considered and allowed only on an interstate basis.  In 1983 while on a job site, Rapp was approached by a customer that had just invested in an out of town company that was selling limited partnerships in a long distance reseller service.  The customer asked Rapp “Can you do the same thing these guys are doing?”.  Rapp replied “sure if you have the capital”, the customer replied “We have the capital, we were going to invest in a out of town company but if we can invest the money in our local community, we would rather do so”.  Shortly thereafter Rapp formed Econ-O-Dial.

 

Who Ya Gonna Call?

Phone Giant Busters!

by EMILIE MARTIN

as originally reported in the Sierra Daily News

October 16, 1984

 

A Bishop-based business is experiencing a growth spurt that has its owners projecting they will serve 8,000 customers within the next year, up from the present 3,000 customers.

Econ-O-Dial, guided by President John Malaer and Vice President Steve Rapp, is looking at national expansion as it moves into small markets that telephone giants such as American Telephone and Telegraph and Sprint do not see as lucrative.

Using innovative equipment designed to be functional and cost effective, the company has found a formula for providing its customers with savings from 20 to 50 percent on long distance phone bills and still return a healthy profit to its investors.

Today, Econ-O-Dial employs 11 people and is headquartered in Bishop.  It serves Bishop, Mammoth, Lone Pine and Dyer, Ney, with current expansion into Ridgecrest, Lake Isabella and Tehachapi.

“Right now we average 50 new customers a day in Ridgecrest,” Rapp said, to illustrate the appeal of his company’s service.

The business operates like a co-op, Econ-O-Dial first contracts with established telephone companies to buy a large chunk of telephone service, and then turns around and sells smaller amounts of telephone time on long distance lines to more people at a lower price per capita.

“Face it, every call out of here (Bishop) is long distance.  You can only call Big Pine or Pine Creek direct from Bishop,” said Rapp.  The company processed roughly 22,000 separate calls last month and can track any of those calls, if needed to verify them for billing purposes, he added.

“We got into small towns where other companies don’t think it is worthwhile to come in.  We engineer our own equipment and tie it together.  We use less expensive equipment, so it is efficient for us to go into small towns with out our system,” said Rapp.

Upstairs from Ben Franklin, Econ-O-Dial’s offices are a maze of equipment plus one gigantic computer.  Two programmers and three technical people keep the huge Data General computer functional.  The heart of the Econ-O-Dial system, it routes, handles, records and bills over 22,000 calls month - a number that will grow as the system expands.

Econ-O-Dial is licensed by the California Public Utility Commission, which allows them to sell telephone service.  Rapp and his employees keep up to date on all the rulings of the Commission.  “We keep up on what happens there, because lots of things are changing.  And we go to all the trade show meetings and belong to the associations for the same reason,” Rapp said.

“AT & T is ripping off the public right now.  Until they get competitive, we can offer our customers savings from 20 to 50 percent and make a profit besides,” Rapp declared.

Only 28-years old, and a 1974 graduate of Big Pine High School, Rapp was too stubborn to go to college.  Instead, he excelled at a trade school, Electronic Computer Programming Institute, near Fresno, and was named by Who’s Who of students in American vocational and technical schools.

Rapp placed first in the 1972 California Central Valleys State Science and Mathematics Fair and placed third in an International Science Fair at age 16 with a computer he assembled while a student at Big Pine.  But he downgrades his school days.

“I was buffaloing them with my brilliance, but school was a waste of time.  I was stubborn, a real brat then, I did great in courses I liked, but the others I flunked,” he recalled.

Friends remember him as a brash, stubborn, strong-willed youngster who fiddled with a mass of spare computer parts and wiring and could create ham radios from very little.

Today, he rotates the presidency of Econ-O-Dial with Malaer, who once handled the sales for Continental before he worked with Rapp.  Malaer is an effective salesman, who understands his product well.  He started as a cable splicer and worked his way up.

“The two of them are quite an impressive pair.  I’d call Steve a resident semi-genius when it comes to working with computers.  He is a real junior Edison.  And the two of them really have a going business going,” said their attorney Ed LaPlount.

“Combining Rapp’s technical ability with his ability to analyze economic trends and Malaer’s salesmanship has created an impressive company.  Their growth potential is incredible,” LaPlount said.

Econ-O-Dial just negotiated a large contract with a bank up and down the valley to provide security and a telephone system.  They are looking at expanding into Nevada, Oregon, and Arizona, LaPlount added.

“They are looking at national expansion.  Because of the unique system using state of the art components and inexpensive methods, compared to their competition, they are going to skyrocket in the business world,” LaPlount predicted.

Limited partnerships to capitalize the corporation were sold locally last February and raised $120,000 for Econ-O-Dial.

Already, they are returning a profit to the investors.

Econ-O-Dial is only one of three corporations clustered around the young computer genius and his salesman partner.

Once Rapp finished a year of trade school, he bought Sierra Security Systems for a few thousand dollars.  From then on, it was change and innovation as he rigged electric system after system to fill his needs.

As he saw the telephone company’s monopoly on equipment loosen, Rapp set up a company, Combined Telecommunication Systems, to provide telephone systems for various big businesses in the area, including the Forest Service, Inyo County, and Bishop High School.

Finally, last February, as they watched the big companies become less competitive as deregulation took over, Rapp and Malaer in tandem devised the strategy for Econ-O-Dial.