Shortages of fiber-optic cable, semiconductor chips and skilled labor threaten to hinder this year’s booming rollout of broadband and wireless networks — all while 5G infrastructure construction is thriving and the Biden administration is poised to allocate $65 billion for broadband deployment.
The most serious, longest-standing deficiencies are the chip shortage that affect the telecom supply chain and a scarcity of trained workers for building the new networks. Global semiconductor shortages have been disrupting plans for much of the tech industry and automakers. The broadband industry, in particular, is being slowed by the shortages in chips and other components — a trend that could further extend to wireless infrastructure builders.
Meanwhile, the recently realized fiber shortage is as seen as a shorter-term, but imminently more severe problem. AT&T had plans to wire 3 million homes this year, but last week said it would only be able to complete 2.5 million. The company warned that shortages are likely to affect other companies that purchase fiber. According to Shirley Bloomfield, chief executive officer of NTCA — The Rural Broadband Association, internet service providers are waiting as long as 71 weeks for new fiber to be delivered. Bruce Forey of Broadmax Group, a fiber broadband development consulting firm, said that semiconductor chips, electronic capacitors, resistors and even plastic polymers also are increasingly scarce.
The largest fiber buyer in the country, AT&T expects to catch up with its original fiber-construction estimates starting next year, largely because of the company’s “preferred place in the supply chain” and set prices. AT&T said it believes it will be able to reach its target customers of 30 million customer locations by 2025.
Gary Bolton, president and CEO of the Fiber Broadband Association (FBA), also is optimistic about the supply of fiber. “The majority of the fiber being deployed in the U.S. is made in the U.S.,” he said. “Corning, OFS and Prysmian all manufacture optical fiber in the United States and will have sufficient capacity to meet demand and these domestic suppliers are further expanding capacity.”
Bolton continued: “The $65 billion broadband infrastructure investment provides strong visibility to the long-term capex investment cycle that will enable our fiber manufacturers to increase capacity to meet demand. The infrastructure bill has passed the Senate and is working its way through the House. At best, this funding will begin flowing in 2023. The fiber industry will continue to ramp in 2021 and 2022 with the significant announced broadband investment from private capital, already appropriated federal funding (RDOF, Re-Connect, ARPA, etc.) and state funding (i.e., $6 billion California budget surplus).”
However, in the short term, smaller internet providers are also already feeling the pinch of the fiber shortage. The National Rural Broadband Association said that providers can’t get 30 percent to 40 percent of the needed equipment to install broadband — especially fiber. Meanwhile, the Rural Wireless Association is more concerned that a shortage of semiconductor chips and fiber-optic cable could have a big effect on the timing associated with its members’ ability to replace Huawei and ZTE gear in their networks, as mandated by the Secure Networks Act of 2019.
“The chip shortage is more challenging than the fiber supply given the number of industries competing for chips, such as the auto industry,” said FBA’s Bolton. “We believe that long lead times can be managed with long-range forecast visibility and strong supply chain management.”
A spokesperson for the Wireless Internet Service Providers (WISPA) told eDigest, “Chip shortage has not been something I’m hearing about from our members, though equipment shortages generally, through tariff issues and COVID, have been a struggle for some.
“However,” the WISPA spokesperson continued, “The labor shortage is huge — finding, attracting and keeping good labor has always been difficult, especially for small companies operating in rural markets. The current labor crunch has only exacerbated that. WISPs are finding ways to get around it — through comprehensive benefits packages, signing bonuses, higher pay, training and apprenticeship programs, etc., but it will remain an ongoing challenge even after the current crunch subsides. Though Congress’ billions for new broadband deployment will bring new labor into the market, until that new supply occurs, there will be labor issues in the short term.”
As far as the fiber shortage is concerned, WISPA’s spokesperson also said the organization believes the shortage is temporary and the market will get what it needs. “We see delays now, even for AT&T,” he said. “For the small guy, I hear of up to a year or more to get ordered fiber delivered. Congress’ broadband deployment money will increase that wait until supply responds. But supply will eventually respond. The numbers are simply too big for this not to occur, notwithstanding the past experience of the dot-com bubble.”
As far as how the fiber shortage how might bolster wireless construction, the WISPA spokesperson said, “I think that companies are already seeing the advantage of FWA [fixed wireless access] in quickly, cost-effectively and robustly connecting consumers to the internet. The very largest companies see it as a viable tool to bring evolutionary broadband to their hungry customers. WISPs have known this for years. Sure, fiber is great; many WISPs are hybrid providers and have significant fiber assets in their networks. But the shortage did not bring the FWA model to the fore. It stands on its own as a tremendous, evolutionary solution to get people online.”
Meanwhile, Todd Schlekeway, president and CEO of NATE: the National Association of Tower Erectors, said, “There are a myriad of supply chain issues right now and it appears the fiber shortage is part of that issue. AT&T certainly called attention to that fact last week.”
Delivering the keynote address at the South Wireless Summit, held in Nashville on June 28, Schlekeway warned that wireless contracting was becoming untenable. Schlekeway said he believes that, although the shortage of skilled workers is a major problem, the largest problem for NATE members is downward pricing pressure from carriers and others at the top of the chain, which is making wireless contracting unprofitable. “Customers at the top of the chain have shifted all responsibility for the safety and vetting of contractors to third parties with an ever-rising bar,” he said.
“One remedy involves finding more skilled workers,” Schlekeway said at the summit. “U.S. operators want to expand their 5G networks, but a shortage of skilled tower workers — particularly workers demanding higher pay — could hinder that expansion.” Schlekeway said that NATE is working with technical colleges and community colleges to train people for these types of trades. But he noted that even the help of these institutions won’t solve the problem overnight.
Gary Bolton also sees the skilled worker shortage as his association’s largest challenge. “FBA is launching a nationwide Optical Technician training program nationwide to community colleges, high schools and with veterans,” he said. This training is recognized with the U.S. Dept. of Labor, with FBA as a national sponsor, and includes 144 hours of classroom and hands-on training and 2,000 hours of apprenticeship.”
Mike Harrington is a contributing editor.