Colorado union workers, ISPs lock horns over BEAD labor bill

  • Colorado state lawmakers introduced a bill that would mandate prevailing wages for certain projects using state or federal money

  • During a hearing at the state capitol, local union workers said the bill would help avoid "shoddy work and upset customers”

  • The Colorado Broadband Office has argued that the bill would deter broadband providers from participating in grant programs like BEAD

Are federal labor protections for broadband workers strong enough, or should state lawmakers intervene to give them a boost? That question is at the heart of a fiery debate raging in Colorado’s state house over a piece of proposed legislation that would codify additional rights for broadband workers.

If passed, the bill would mandate that any company using federal or state money for broadband projects of over $500,000 would have to pay workers prevailing wages. It would also establish evaluation metrics that consider fair labor practices and require companies to submit data to the Colorado Broadband Office proving their compliance.

At a hearing this week, the House Committee on Business Affairs & Labor heard testimonies for and against the proposed legislation. After over a dozen testimonies lasting well over an hour, the committee ended up delaying its vote on the bill.

Fierce Telecom was on the ground at the hearing. Here’s what we heard.

Sponsored by state Democrats Tammy Story and Julie Gonzales, the bill was introduced in February and has garnered most of its support from labor union workers.

Colorado is slated to get $826 million through the Broadband Equity Access and Deployment (BEAD) program, and another $113 million from the state's Capital Projects Fund. Beyond the mandatory requirements in federal programs like BEAD are a list of optional criteria that states can also consider when selecting subgrantees.

Story said the intention of the bill is to codify those optional criteria, including prevailing wage and training for a direct hire workforce.

Union workers at the hearing claimed that companies using contractors instead of a directly hired workforce means they are no longer in control of training, wages and working conditions. Anthony Scorzo, President of the local Communications Workers of America (CWA) union branch warned that efforts to cut costs and outsource labor will result in “shoddy work and upset customers.”

“More times than I can remember I've had to go behind contractors to fix their mistakes, both working on the outside cable plant and working inside on systems that support these networks,” Scorzo told the committee.

Colorado Broadband Office gets involved

Brandy Reitter, Executive Director of the Colorado Broadband Office, contended that the state’s BEAD proposal already includes “significant labor requirements.”

Labor provisions represent “about a third” of the state’s official plan for BEAD, she said, and comply with the federal Davis-Bacon Act on labor standards that includes prevailing wage requirements, equal employment opportunity compliance and reporting requirements.

The provisions in the House bill go “above and beyond the BEAD notice of funding opportunity,” Reitter continued, and could “have a chilling effect on our BEAD program to deter any providers from applying altogether.”

In her testimony, Ceilidh Gao, who works on broadband policy at CWA’s national office in Washington D.C., countered with a claim that prevailing wages are not really required by Colorado's current BEAD plan. “There is reference to disclosures around prevailing wage that are optional,” added Gao.

Community ISPs dissent

With much of the bill’s opposition coming from local ISPs, Scorzo argued that broadband providers “just don't want to pay their workforce."

"They want to undercut and get away with doing this work at low standards,” he said.

Prevailing wage requirements have become a sore spot for small businesses in particular. David Lindauer, CEO and founder of Maverix Broadband, told the House committee the bill is trying to “solve a problem that doesn't exist.”

Lindauer said the proposed legislation “insinuates that Colorado companies aren’t taking care of their people, which is entirely misguided.” Additionally, he said the current prevailing wage model doesn't make sense because the list of jobs doesn't cover all fiber optic positions, which has forced his company to wrongly categorize workers as electricians and pay higher wages.

Hilltop Broadband CEO Eric McCluskey noted that in the face of labor shortage challenges, his company has “consistently” offered competitive wages and benefits to employees, including employer funded health care. “The passage of this bill would only exacerbate our recruitment and retention difficulties,” McCluskey told the committee.

U.S. Commerce Secretary Gina Raimondo has urged small broadband providers to apply for BEAD grants despite concerns over whether the program provides a level playing field.

In a blog written shortly after BEAD rules were released, CCG Consulting analyst Doug Dawson said the NTIA’s labor requirements for BEAD on their own favor large ISPs. Most smaller providers will struggle to find contractors and subcontractors ahead of time, in addition to convincing contractors to prove their history of adhering to federal laws “and jump through a mountain of paperwork,” he wrote.

The labor shortage issue has become a common concern across the broadband industry, and especially for smaller providers. Although, CWA organizer Sandra Parker-Murray contended that the union has had some 5,000 technicians laid off in the last four or five years. “That would cover the amount that's needed to build this out… So yeah, there are workers available,” she told Fierce before the hearing.

Shifting sands

According to Reitter, the current version of the House bill would make Colorado ineligible for BEAD funding. She noted that an earlier version of Colorado's BEAD proposal included stricter labor requirements, but those were rejected by the NTIA.

However, Gao said that many states have included additional prevailing wage requirements in their BEAD designs, including Washington, California, Pennsylvania, Michigan and New York.

The Colorado Broadband Office is currently waiting for the NTIA to approve its BEAD proposal Volume 2. It’s expecting that to happen next month, which would put the state on track to open up its grant process this summer, have awards finished by the end of the year and get the money flowing into communities by early 2025.

Reitter warned that passing the new labor bill could mean her office has to completely rewrite and resubmit its BEAD proposal to the NTIA, conceivably setting that process back by 12 to 18 months.

An NTIA official told Fierce that any changes made to Colorado’s Subgrantee Selection Scoring Rubric for BEAD would mean that state must submit an amendment to their Initial BEAD Proposal before starting their subgrantee selection process. This could “potentially” delay NTIA’s approval of the Initial Proposal and the disbursement of BEAD funds.

At the end of the hearing, Story asked the committee to delay a vote on the bill. She said there are some amendments that could be added to the legislation to minimize disruption to the state’s BEAD program, although she declined to specify what those amendments are.