The spike in fiber construction projects — Altice USA, Comcast, Charter Communications, Frontier Communications and a handful of smaller operators all have plans to build out and expand their plant across the country over the next five years — has created a bit of a dilemma for providers. While there is money (federal grants totaling more than $65 billion have been earmarked for broadband expansion, especially in rural areas), desire (expanding footprints mean more chances to grow customers) and need (about 43% of U.S. homes have access to fiber broadband), shortages of equipment and skilled workers could throw a wrench in what many expect to be the biggest fiber buildout in the past 20 years.
For AmeriCrew, a company founded in August by former U.S. Army officer and long-time telecom executive Kelley Dunne to help fellow veterans train and establish careers in the telecommunications, clean energy and managed services industries, the worker shortage is real, and not just for people who know how to splice fiber.
“Everyone is building at once,” Dunne said. “In the process, the skill sets are converging as well. You need skilled labor out in the workforce, not to mention electricians and higher skilled laborers. I think we’re heading into the largest workforce shortage our nation has ever seen.”
He's not alone in that fear.
A ‘Huge Issue’
“Labor is a huge issue right now,” Jeff Heyner, Dell’Oro Group VP, broadband access and home networking, said. “It’s a big concern, especially for those projects that are subsidized through RDOF [Rural Digital Opportunity Fund] and the other U.S. government or state government grants. The concern there is, can they finish these projects within the time frame allotted before they have to go back and say they need an extension?”
Federal and state broadband funding programs usually have milestones and deadlines that awardees must meet in order for them to continue receiving money. For those that can’t meet those deadlines, they usually have to file for extensions to the respective government agencies, which at best means a ton of additional paperwork and at worst means giving the money back.
Heyner said that the deficits aren’t only in the employee ranks. Supply chain issues are delaying projects as well.
“There is still a lot of backlog of projects and it’s not like they’re slowing down any strategic initiatives they have,” Heyner said. “The projects just keep coming and they’re gated by supplies. It’s really difficult to get ahold of fiber itself, conduit, and once everything is installed, the CPE necessary to connect the subscriber. There are certainly labor shortages as well, all across the board when it comes to any technicians or outside plant folks.”
Fiber Broadband Association VP, research and workforce development Deborah Kish said her organization began hearing from its service-provider members about two years ago that they had to turn down jobs and couldn’t get installs done because they didn’t have the skilled workforce.
“That’s kind of indicative of the telecom industry,” Kish said. “We have a lot of people who have been in the industry for 30 or 40 years, so there are a lot of people aging out. It’s a matter of how do you attract fresh, new people to do these jobs.”
FBA, she said, launched a 144-hour fiber optic technician training course on March 29 teaching fiber theory, types of fiber, splicing , outside plant installation, FTTH installation, testing and troubleshooting. The course is about half in the classroom, half in the field, and students will emerge from the course as an advanced entry-level fiber-optic technician.
Kish said there are other training programs, from independent associations, community colleges and other educational institutions across the country, but it still might not fill the need.
She added that the industry expects to build 1.6 million miles of fiber over the next five years. She estimated that potential job creation is in the tens of thousands to hundreds of thousands over the next several years.
“Yes, it [the worker shortage] will delay projects,” Kish said. “That’s why it’s the right time to do this.”
Eleven of the top telecom trade associations, including the Competitive Carriers Association, the Fiber Broadband Association, INCOMPAS, NTCA–The Rural Broadband Association, the Wireless Infrastructure Association (WIA) and CTIA, wrote Congress in February 2021 claiming that the industry will need an additional 850,000 man-years of trained fiber technician labor over a five year period to keep up with demand. In comparison, the group said the industry employed about 672,000 technicians, and to meet the short-term labor requirements will have to find and quickly train at least 250,000 new technicians.
That same year South Dakota Republican Sen. John Thune reintroduced his Telecommunications Skilled Workforce Act bill, U.S. which would establish a Federal Communications Commission-led interagency working group to develop recommendations for workforce needs and to empower the GAO to conduct a study to determine the specific number of workers required to fill the gap.
The bill was first introduced in February 2020 but appears to have little traction at the moment.
“When you look at the industry as a whole, there’s simply not enough people,” CCG Consulting president Doug Dawson said, adding that the number of installations is already at record levels and continues to grow. “Somebody is going to get shorted somewhere along the line. It could be that everybody gets shorted.”
At the same time, there are groups who say there is no worker shortage at all. The Communications Workers of America, the union representing more than 150,000 wireless and wireline telecom workers, has said repeatedly that there is no shortage of workers. What has been lacking, according to the union, are decent wages as companies lay off telecom workers.
In his February testimony before Congress, Communications Workers of America president Christopher Shelton said companies claiming a shortage of skilled workers are really lamenting a lack of non-union employees.
“AT&T and other telecom companies have laid off tens of thousands of workers in the past few years, including thousands of well-trained construction technicians, while non-union contractor companies claim they can’t find qualified workers,” Shelton said, adding that if there truly was a deficit, wages would increase. Instead, he cited an Economic Policy Institute study that showed that wage growth has slowed over the past 40 years.
“The lowest-paid 10% of workers in telecom actually saw their wages decline by 12% in real terms since the 1970s, driven by outsourcing and the loss of union representation,” Shelton continued. “When wireless infrastructure companies and their lobbyists start talking about workforce shortages, ask them for proof.”
But as big players like AT&T have the size and the muscle to bring in fiber workers, the pool is still small, meaning if one company attracts a crew, another company is left without.
Dawson, a 45-year veteran of the telecom industry, said the labor shortage depends on who and where you are. For mega-companies like AT&T and Verizon, which have nearly unlimited resources and can attract workers from around the country or train workers on their own, the ability to build a workforce isn’t as hard as it is for a small telco in a rural area.
So AT&T, Verizon and other mega-players may have a leg up on the rest of the industry in attracting work crews, “but that means 20 other smaller companies just got really screwed,” Dawson said.
The road for smaller operators is much rougher, adding that skilled workers can jump from company to company on fiber builds, landing where the pay is best. For many that means bigger companies.
He used a small fiber project in Oregon, in a town with about 20,000 residents, that he has consulted for about two years as an example.
“During the construction process, every Monday they would make bets about how many construction crews wouldn’t show up,” Dawson said. “Because at that same time Verizon was building a tremendous amount of fiber throughout Washington and Oregon, and they would simply steal away the crews by offering them a higher rate. They weren’t at the bottom of the chain — they were building a $20 million project — but they still had a tremendous struggle trying to keep work crews. If you’re a little city with a $1 million grant, good luck.”
A Loss of Institutional Knowledge
Dawson agreed that layoffs after the last fiber bubble burst 20 years ago have added to the paucity of fiber technicians. Between 2001 and 2005, AT&T alone reduced its workforce from 215,088 to 162,000 employees, according to the company’s 10-K annual reports. What resulted is that today, many fiber line workers are either baby boomers or Generation Z, meaning they are either about to retire or they’re too young to have much experience. And when those baby boomers retire, they take a lot of the provider’s institutional knowledge with them.
And the projects aren’t last-mile fiber builds alone, Dawson added. Independent companies like Zayo are building massive long-haul networks, cable companies continue to build fiber as they cut their nodes down, wireless service providers are all building 5G networks — which have a huge fiber component — as well as Dish Network, which as part of federal requirements for its spectrum purchases needs to build its 5G to 70% of the country by next June.
While the available pool of workers is likely to migrate to those bigger projects, smaller companies are having to decide whether roll the dice and hope they can attract enough workers, or build projects with existing staff. Dawson pointed to one client — a municipality in Arkansas — which is doing the latter, but added it will quadruple the time it takes to build the network from one year to four years.
“Everyone can’t build what they’re announcing, it’s impossible,” Dawson said. “Between materials, engineers, fiber splicers, there are places that are going to run into bottlenecks.”
It’s Not Just a Job…
While there are staffing agencies, contractors and subcontractors galore to provide skilled workers for fiber builds, training a fiber tech from scratch can take anywhere from several months to several years. And Dawson said it can take two-to-three years of being on the job before a fiber technician is up to snuff, Dawson said.
"It's a true apprenticeship program, they're fairly worthless in the beginning," Dawson said. "Just knowing how to safely climb poles and all that, you don't learn in a day."
Workers are well-compensated for their efforts. Fiber-optic technicians make an average of $65,000 per year, according to Glassdoor.com, but depending on the location and the employer, can earn $80,000 or more annually.
While that is enough to attract a wide range of workers from all walks of life, AmeriCrew's Dunne said he believes veterans are especially geared toward fiber work because of their focus on teamwork and getting the job done.
For the veterans — Dunne said there are about 100 people in AmeriCrew's fiber program — the attraction is the ability to work wherever they want, to not to be tied to a desk and to build a career.
“Sitting in a cubicle all day staring at a screen is not a job they are going to resonate towards,” he said.
If You Build It
Even the big guys have had to deal with periodic labor shortages. Almost every major telecom company has announced plans to boost its fiber diet, with AT&T predicting to extend its fiber network to 3.5 million additional homes this year, 4 million in 2023 and 30 million by 2025. Altice USA said earlier this year that it will accelerate its fiber buildout plans, extending its network to 6.5 million homes by 2025. Verizon has completed the core fiber buildout for more than 50% of its markets, so any further construction will be success-based
Frontier Communications, which emerged from bankruptcy in April 2020, has put forth an aggressive buildout strategy, planning to pass 10 million homes with state-of-the-art technology by 2025.
Frontier chief network officer Veronica Bloodworth said at a recent industry conference that her biggest challenges in building out that network are twofold — labor and equipment.
“We have a much more diverse supply chain of labor partners than we even had nine months ago,” Bloodworth said at the conference. “I have a lot of confidence in our suppliers to meet their commitments. I feel very confident in our ability to meet our commitments. But the supply chain is much tighter than it was before.”
AT&T ran into some supply chain and staffing issues in 2021 around the fiber build — it finished the year adding about 2.6 million homes instead of the 3 million it had earlier predicted — but said that it believes it has solved any problems associated with network construction.
At the Deutsche Bank Media, Internet & Telecom conference on March 14, AT&T chief financial officer Pascal Desroches said AT&T is in a good spot in its buildout plans.
“Look, we’re not immune to supply chain issues, but we have first priority on supplies, we are in great position on access to labor relative to others, and what we’re seeing is while there were issues in the summer of last year those issues have been largely resolved and we exited 2021 with good momentum,” Desroches said at the conference. “That continues in 2022, so we feel really good about our ability to deliver 3.5 to 4 million new locations this year.”
But even though big players like AT&T have the size and the muscle to bring in fiber workers, the pool is still small. That means if one company attracts a crew, another is left without.
Smaller Providers Lead the Charge
Other smaller, more rural telecom companies also have aggressive buildout plans, like Shenandoah Telecommunications, which expects to pass 300,000 homes with fiber this year, and TDS Telecom, which plans to nearly double its total service addresses from 1.4 million to 2.2 million over the next five years, mainly through fiber expansion.
At the New Street Research virtual Fiber to the Future conference on March 29, TDS Telecom CEO Jim Butman said that currently, his company passes about 400,000 homes and businesses with fiber. He pledged to grow that to 1.3 million addresses in five years, adding that most of that growth will occur within TDS Telecom’s existing footprint.
“We want to protect what we’ve got in the ILEC first,” Butman said at the conference, adding that those plans don’t include efforts that could be funded through federal programs. With federal funding help, TDS could add another 100,000 to 150,000 homes to its fiber network.
Shentel had about 300,000 broadband passings at the end of 2021 — 200,000 through incumbent cable, 75,000 via its Glo Fiber offering in overbuilder markets and 30,000 through the federal Broadband Equity, Access and Deployment (BEAD) program. At the New Street Research conference, Shentel chief operating officer Edward McKay said the telecom company plans to double its Glo Fiber passings this year, growing to more than 450,000 passings by the end of 2026.
“In total, we will grow broadband passings from 300,000 to 700,000-plus over the next five years, driven almost entirely by fiber-to-the-home expansion,” McKay said.
And while competitors have opted to expand into more rural markets using fixed wireless technology, fueled by federal money, McKay said Shentel scrapped its fixed wireless program after it saw the amount of federal money that was pouring into its markets.
“We believe with the funding that is out there today, that will justify building fiber to the vast majority of the homes that we previously targeted for our BEAD fixed wireless,” McKay said. “We’re actually going after some of that funding ourselves.”
In the meantime, the number of wireline projects keeps growing. Earlier this month, Shentel’s Glo Fiber announced plans to expand its fiber network in Lancaster, Pennsylvania; MetroNet announced plans to build a $130 million fiber network in Colorado Springs, Colorado; and Consolidated Communications said it will build a fiber network in Maine reaching 150,000 homes by the end of the year.
In addition to building fiber networks for wireline high-speed Internet service, 5G wireless networks have a huge fiber component. 5G service requires a lot more towers than its predecessor technology: 5G cells have a range of about 1,000 feet, compared to 10 miles for 4G cells. 5G cells must also be connected to each other via fiber, which means a lot more fiber needs to be built.
Dawson added that once the construction is completed, the work shortage could shift again. He said that companies will have to hire permanent fiber technicians for every 2,000 to 3,000 passings to maintain the network.
“People will tell you there’s no shortage of them [permanent techs] right now,“ he said. ”There will be when there are 10 million more fiber passings.” ■
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Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.