Broadband Buildouts Running Headlong Into Expected Labor Difficulties

Facing a deluge of federal and state spending aimed at closing the digital divide, broadband internet access service providers and network construction contractors foresee a logjam of work orders. Some tell us they anticipate what could be significant delays in work to extend networks to unserved rural areas.

The current labor pool already is "somewhat stretched" even before elevated state and federal funding, with a lot of competition among employers for workers, said Power and Communications Contractors Association Chairman Jerrod Henschel. It's driven by investments by overbuilders and carriers expanding their fiber-to-the-home offerings, said Henschel, CEO of Wisconsin broadband and utilities contractor Equix. "There's simply not enough people to get the work done," he said.

Spending under the American Recovery and Reinvestment Act during the Obama administration, with more than $7 billion appropriated to NTIA and the Agriculture Department's Rural Utilities Service for investment in broadband infrastructure and access, "completely flooded the telecom market ... which is why a lot of it didn't get built," Henschel said. The $45 billion coming via NTIA's broadband equity, access and deployment (BEAD) program, enabling middle-mile broadband infrastructure program and State Digital Equity Act program is going to be that issue multiplied, he said. "This is going to be very taxing," he said. "It's desperately needed, but we need to take a more-realistic viewpoint -- it's a 10- or 12-year effort ... not one election cycle."

The biggest workforce demand is at the entry level and for “qualified line splicers and utility technicians,” said PCCA CEO Tim Wagner. The workforce shortage has been “haunting this industry for a long time,” Wagner said, noting labor and supply chain issues may have a net result of 20 to 25% fewer miles of infrastructure funded through the Infrastructure Investment and Jobs Act being built: "None of this stuff is going to get built anytime soon."

Among the main barriers for getting into the broadband and construction industries has been the lack of a degree, Wagner said, and PCCA partnered with community colleges across the country with “tremendous success” in some areas. Apprenticeships are a “vital” component, he said, but most of those recruited into these programs already are working in the industry and using the program for additional training.

Competition among broadband providers for specialized construction crews is already strong. "It's not like they are all around; they get tied up on jobs," ACA Connects President Matt Polka told us. He said smaller cable ISPs like ACA members often are doubly challenged as contractors focus first on larger expansion projects being done by larger BIAS providers.

Polka said BEAD and other program money might start flowing in 2023, with the best-case horizon for completion being perhaps four to five years after that. He said it might take longer than that due to competition for services. He said the FCC lowered regulatory barriers to deployment, but there remain problematic areas like the approval processes for railroad crossings and federally managed land.

States aren't likely to start handing out money next year due to the processes they need to set up first, said Charter Communications Chief Financial Officer Jessica Fischer at a J.P. Morgan investor event last month. She said buildouts could take five to six years.

Big ISPs seemingly are locking in contractors for multiyear contracts so they're guaranteed to have work crews, emailed CCG Consulting President Doug Dawson. But those big contractors often use numerous subcontractors, and they often have work crews changing allegiance in search of higher pay or better working conditions, he said. Smaller ISPs often lack market power to tie down contractors years in advance, he said. "A small ISP building a network will literally pray every Sunday that the work crews will show up again on Monday -- and sometimes they don’t," he said.

There is a definite national shortage of trained technicians, with larger construction companies and crews "taking on apprentices like crazy right now to try to staff up for the future," Dawson said. Needed are fiber splicers, people who know how to operate trenching and boring equipment and workers with experience working with poles or willing to build drops to homes and businesses, he said. "Anybody with those skills is in big demand," he said.

The availability of fiber technicians is a “challenge,” said Fiber Broadband Association CEO Gary Bolton, with some members reporting the need to hire nearly 2,000 technicians. The group launched a nationwide program to provide about 144 hours of classroom training and a 2,000-hour apprenticeship accredited by the Department of Labor, Bolton said, but “the part that I'm most worried about is some kind of stipend program” to ensure students can complete the program.

As there's already a materials shortage, the wave of government spending atop that "is going to be a mess," said Nate Thompson, president and co-founder of Illinois' American Fiber Construction. He said the fiber contractor industry is already facing workforce difficulties as other industries doing road, gas and electrical work poach its employees as their business picks up. Hiring also is difficult, Thompson said. He said American Fiber in the past two months advertised for people, had 40 applications, hired six with handshake agreements, and none ultimately showed up for the first day. He said it's trying to offer employees signing bonuses if one of their recommendations turns into someone who stays.

Thompson said bringing fiber to an unserved area can involve horizontal drilling in urban areas, a vibratory plow in rural ones or aerial installation on poles. For drilling, 1,000 feet per day per drill would be reasonable, while plowing can handle 6,000 to 10,000 feet, he said. Aerial pole work is more variable, but 3,000 to 6,000 feet a day in a rural area would be attainable, he said.