At Traditional Phone
Companies, Jobs May Not Last a Lifetime
Danny Mathis remembers his first years on the job building phone networks in northern Georgia in the 1970's. Then, Mr. Mathis and other technicians at Southern Bell, the predecessor to BellSouth, used to splice thick cables containing 3,600 pairs of wires, or 7,200 phone lines. He and his team would work all day to connect just two 500-foot sections of cable.
These days, Mr. Mathis works far more with fiber optic cable. A single hairlike strand can carry 672 phone calls simultaneously, funnel high-speed broadband connections to homes and carry televisions signals. Technicians can splice 500-foot lengths of fiber in about two hours.
"Fiber is a whole different ballgame," said Mr. Mathis, 54, whose brother, Robert, 56, and their sons also work at BellSouth.
Fiber is also a new game to BellSouth bean counters. Fiber is more durable, so fewer repair crews are needed to maintain it. Engineers can monitor the network remotely and identify problems on computers miles away instead of sending teams of workers to look for cable breaks. As a result, Mr. Mathis's office, about an hour's drive from Atlanta, has five workers repairing cable, down from 17 when he started working there three decades ago.
"There probably won't be a whole lot of technicians around when I'm my dad's age," said Jeremy Mathis, Danny's 25-year-old son, who joined BellSouth seven years ago and installs and maintains wiring at customers' homes. "When there's more fiber in, there's a whole lot less work to do."
The leap from copper cable to fiber is just one of the many changes facing telecommunications companies like BellSouth and the hundreds of thousands of workers they employ. Traditional phone companies are moving from vast and costly networks - systems that were managed by legions of workers who received long-term job security, decent pay and good benefits - to new, cheaper technologies that require fewer workers.
In years past, phone companies fought each other. Now, the Bells have to fend off not just cable providers rushing into the phone business, but also companies like Skype, a two-year-old European concern that gives away software that lets users place free calls over the Internet. Google plans to give away wireless connections that will compete with the Bells' mobile phone subsidiaries, while AOL, Yahoo and others are introducing their own voice services. Though these companies are growing faster, they typically pay workers far less than the Bells and are more likely to issue pink slips when times get rough.
While the Bells have the money and technology to replicate these services, they are reluctant to do so because it undermines their existing businesses. "Older companies are seldom able to exploit the technology of the newer companies," said James E. Katz, a telecommunications historian at Rutgers University. "We can expect the Bells to be increasingly less successful because they have a huge installed base in a technology that is withering on the vine. It's not a viable option to retrain all their people."
This clash between old and new has upended the automobile, airline and computer industries to varying degrees as well. Similarly, telecommunications companies are battling deregulation and new advances that have made it easier for entrants to sell voice, data and video services, often for far less than incumbents with their higher-paid work forces and older, fading technologies.
The Bells and their like are not going to disappear, of course, since someone will still have to operate the phone and broadband networks that software-driven companies like Skype and AOL must use. But as these newer companies make deeper inroads, the Bells are likely to do what most incumbents do: use their significant political power to win over lawmakers.
The government has stood by as the Bells bought the two biggest long-distance carriers and created the country's two largest cellphone carriers. And lawmakers have acquiesced to their demands for a speedier entry into the television business. The Bells have also won rulings that make it harder for rivals to piggyback on their networks.
"In the end there is going to be more regulation, not less," said Christiaan Hogendorn, who teaches the economics of technology at Wesleyan University. "Every infrastructure industry starts with lots of competition and then as competitive issues come up, we get more regulation."
Legal solutions, though, will only delay, not reverse, the decline in higher-paying old-line jobs and rise in lower-paying work at new companies, Mr. Hogendorn and others say. They will also do little to ensure that the next generation of the Mathis family will find comparable work in the phone industry.
Thanks to union agreements with BellSouth, the Mathis family is luckier than many, with strong benefits, above-average salaries and protection from outright layoffs. But these jobs are becoming scarce. From 1998 to 2003, traditional wire-line companies eliminated 15.5 percent of their jobs, which paid 26 percent more than those in the cable industry, where employment grew 22.6 percent, according to Jeffrey H. Keefe, a researcher at the Economic Policy Institute, a Washington research institute.
This year, SBC Communications said it would eliminate 10,000 jobs before it bought AT&T, and it expects to shed another 13,000 jobs as a result of the merger. Verizon expects to cut 7,000 jobs after it merges with MCI, while Qwest has eliminated nearly 15 percent of its jobs in the last two years.
Over all, the number of telecommunications workers represented by a union has fallen 23 percent since 2000, to 273,000, according to the Bureau of Labor Statistics.
These jobs are unlikely to return. Not only are start-ups like Vonage attracting customers with cheaper Internet phone lines, but the other Bells are doing what BellSouth has done: installing fiber networks, software-driven routers and other equipment that needs fewer workers to operate.
The Bells have tried to adapt by changing the way they hire. When Mr. Mathis joined BellSouth, the company sought people with an ability to learn, trained them extensively and assumed they would work there for life. Now, BellSouth seeks workers with more skills in electronics, engineering and, increasingly, sales and marketing.
"We still have excellent training programs, but beyond that, it's the ability of the workers to ramp up to speed," said Suzanne Snypp, the director for human resources at BellSouth. "We'd like them to be fully proficient quicker."
BellSouth, in coordination with the union, has added job categories like "digital technician" to describe the work Danny Mathis does installing and maintaining new digital equipment. It has also added an array of technical classes for its workers.
This shift from hard hats to pencil pushers will continue. According to forecasts by the Bureau of Labor Statistics, employment in the industry is expected to grow 6.7 percent from 2002 to 2012, yet the number of mechanics, installers and repairers is expected to grow just 2 percent. The number of computer and network engineers will jump 14.5 percent, while sales and retail jobs are expected to increase 16.3 percent.
Many of these new jobs are in the cellphone industry, which did not exist when AT&T was broken up 1984 but now employs 225,000. Cable providers have another 176,000 workers.
But many of these workers and others in newer companies are not part of a union, so they tend to earn less for similar work. Unionized customer service representatives, for instance, earn about $40,000 a year, according to Rosemary Batt, a professor at Cornell University, while workers in a nonunion shop make $33,000.
In the field, union-represented technicians who work on fiber optic networks earn close to $60,000 with benefits and training, according to the Communications Workers of America. Independent contractors might receive up to $21 an hour, or $43,600 a year, yet have to supply their own tools and truck, and they rarely receive benefits.
While contract workers and those in up-and-coming companies earn less, they are more representative of where the industry is headed. One of the biggest ways that telecommunications companies can compete in a business where prices continue to fall is to cut labor costs.
At 32, Josh Mathis, Danny Mathis's nephew and an eight-year employee of BellSouth, has already figured this out. He was attracted to the company because of the stability of the work and the benefits, "But I don't know if I'd recommend my son get into the phone company when he graduates from high school in 10 years," he said.
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