Labor shortages in broadband are likely to slow deployment

Doug Dawson’s exploration of labor shortages in the broadband industry serves as the opening essay for CGO’s broadband series. The pandemic has heightened concern over broadband access, as more Americans than ever shifted to working from home, students went virtual, and healthcare providers moved to online appointments. With money going out the door, the time is right to take stock of our country’s progress over the last two decades and to consider what the future holds for broadband policy. 

Dawson traces the impact of new money on labor, construction output, and supply of key materials like fiber, routers, and other devices. Materials are tougher to come by, but the main bottleneck is labor. To help solve this problem, Dawson suggests that governments focus on expanding job training programs.

I’m the owner of CCG Consulting, a firm that has helped over 1,100 ISPs and communities build and implement new broadband networks. My clients are mostly smaller ISPs, municipalities, and electric cooperatives, and they tell me they are already having trouble hiring construction contractors and hiring new technical staff.

The pandemic has finally awakened our country to the fact that we need better broadband infrastructure to stay competitive on the world stage. Large parts of the US are without functional broadband. Tens of millions of urban and rural households either have no access to good broadband or can’t afford it. There are horror stories of workers and students in every market who have been unable to function during the pandemic due to the lack of good broadband.

We’re seeing two major responses to this lack of good broadband.

First, the federal government and the states are awarding substantial grants to build broadband infrastructure:

  • In December 2020, the FCC accepted bids and awarded over $7 billion in Rural Digital Opportunity Fund (RDOF) funding via an auction that was already in the works before the pandemic. These grants will be used to construct broadband networks over six years.
  • The recently passed American Rescue Plan Act includes $10 billion for outright spending for broadband infrastructure. It also gave $350 billion to states, some of which has been dedicated to build broadband infrastructure.
  • State broadband programs across the country have collectively pledged additional billions in broadband funding.
  • On November 5, Congress passed the infrastructure bill that includes over 45 billion in broadband grants in the Broadband Equity, Access, and Deployment Program.

Second, the largest ISPs are also investing in infrastructure:

  • Charter pledged $4 billion to match its federal RDOF grants.
  • Verizon has plans to pass 25 million homes by 2025 with fiber-to-the-curb. Other ISPs with significant fiber expansion plans include AT&T, Frontier, Altice, Windstream, CenturyLink, as well as many other smaller companies.
  • Big cellular companies are continuing to rapidly expand 5G capabilities over the next five years.
  • Municipalities all over the country are contemplating building fiber for their own needs and to solve the digital divide.

This is all great news for consumers. The broadband landscape should be much improved over the next 5 to 10 years as new broadband networks are constructed and become operational.

However, there are concerns about the ability of the supply chains in materials and in labor to keep up with this much fiber construction. For the next few years, the industry is proposing to spend many times more than normal on fiber infrastructure. This big increase in demand is going to play havoc with a supply chain that is still crippled from the pandemic. Already we’re seeing backlogs in fiber manufacturing and bigger problems with the manufacture of electronics. The industry is hoping that fiber manufacturers can find a way to keep up with the increased demand. Moreover, the electronics supply chain is in disarray today due to a lack of computer chips, but the outlook is for electronics manufacturers to be able to eventually meet the increased demand.

The supply chain problem that might be the hardest to solve is a shortage of expert labor. There is already a shortage of consultants and fiber engineering firms to design and expand networks. Even more critically, trained fiber technicians are desperately needed to build fiber networks and take care of them after they are built.

In February 2021, the eleven largest telecom trade associations wrote a letter to the White House and Congress saying that the industry will need an additional 850,000  man-years of trained fiber technician labor between now and 2025 to keep up with the demands of the industry. I can’t recall any other topic that these associations have ever agreed upon.

To put that number into perspective, the associations claim that the industry currently employs 672,000 technicians with an average salary of $77,500. To meet the short-term labor requirement will mean finding and quickly training at least 250,000 new technicians.

There are several reasons we are facing a shortage of technicians. The large telcos have been downsizing technician workforces for the last two decades, meaning they did not train a lot of new technicians. Light Reading reported earlier this year that AT&T and Verizon together have eliminated 95,000 technicians over the last five years. These big companies were historically the biggest trainers of new technicians. Unfortunately, by not hiring and training new technicians for the last two decades, there is now a void of younger technicians just at the time when the older baby boomers technicians are now retiring, causing additional shortages.

Additionally, trained technicians may already be sitting on the sidelines. Christopher Shelton of the Communications Workers of America testified before Congress recently that part of the issue is the unwillingness of construction contractors, ISPs, and tower companies to hire union employees. Shelton says there are tens of thousands of laid-off technicians that can’t find work at a fair salary.

The technicians who build fiber networks have a challenging life. Most fiber projects work six days per week. Technicians often work on the road most of the year. The lifestyle is not for everybody. But there is not just a need for technicians to build fiber networks, there is also a need for technicians to take care of networks after construction. As a general rule of thumb, ISPs will hire an outside fiber technician for every 1,500 to 2,000 new fiber customers.

In their letters, the trade associations asked the federal government to expand existing apprenticeship programs and to create new ones that combine class learning along with field experience. There are some such programs in the country, but not nearly enough to handle the needs of the industry.

To help with the shortage and to promote diversity, some have urged that training programs be established at Historically Black Colleges and Universities and Tribal Colleges and Universities along with community colleges, public universities, and other institutions. The trade associations also suggest that training institutions form public/-private partnerships with the industry to help develop the programs in a timely manner and to make sure that training is covering state-of-the-art technologies and techniques.

The country is not currently prepared to train huge numbers of new technicians, but we’re going to have to find a way to do so. There are some formal training programs for fiber technicians, mostly being done by trade schools or technical colleges that sponsor apprenticeships like the CFOT or CPCT certification process offered by the Fiber Optic Association. Instead, the majority of fiber technicians today are trained on the job with new employees starting as hands-on journeymen. Hands-on training can work, but like with any technical field, new technicians need formal classroom training to learn about the underlying science and technology.

Part of the salary issue might be addressed through the broadband grant money that is hitting the market. Most grants require that contractors pay prevailing wages as required by the Bacon-Davis Act. Technicians will refuse to work for projects paying less than prevailing wages when there are huge numbers of grant projects under construction. One might also think that the coming technician shortage will drive up wages as construction companies compete for technicians. I’ve already heard anecdotal stories of small construction companies that are constantly losing technicians to bigger companies.

But even if all of the technicians on the sidelines are enticed back to work, there will be a technician shortfall when the huge federal grant money hits the market. Those grants are pouring far more money into fiber capital spending than the industry has ever seen before, so leaders should expect a big upswing in technician demand starting in 2022.

We must find a way to train huge numbers of new technicians, or the wireless and broadband industries will be forced to cut back on expansion plans. We’ve been building fiber and new small cell sites at a furious pace for the last few years and are likely to continue to do so as long as we have the technicians needed to construct the new networks and to maintain them after they are built. Fiber and wireless technicians are the kinds of solid middle-class jobs our economy needs and hopefully, we can ramp up training programs into high gear in a hurry. One of the biggest worries that many of my clients have is that they won’t be able to find the engineers and fiber technicians needed to build networks that have been funded.

CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.