Page 8 - WV811

The Changing Landscape of Damage Prevention for Telecommunications By Jim Plasynski
The past several years
has brought about
significant change in the telecommunications industry. With the $1.3 trillion Infrastructure Bill and the many other government funding projects focused on the buildout of fiber to the home across the U.S., there has been great
opportunity for many organizations. If you are a telecommunications
company, there has likely NEVER been a time in your history with such
an opportunity for growth. With this growth however, there have been
major implications on the locating and damage prevention efforts that are
a critical pre-requisite for ensuring successful growth. There are many macro-market factors at play that are forcing telecommunications companies to start thinking differently about how they manage and approach locating and the damage prevention process.
There are some major reasons to pay better attention and rethink your strategy.
Historically, many telecommunications providers viewed damage prevention and locating as an out of sight, out of mind activity for their organizations. For years, many organizations have outsourced their locating to third-party locating companies such as USIC. Those third parties would perform their locating work and send them a monthly bill for the performance of those services.
Telecommunications companies often paid those bills and paid very little attention to them as this was viewed as a cost of doing business. The bill
6 • West Virginia 811 2024, Issue 2
itself has often been the deepest line of sight into the status of their locates and the performance of the third parties that are servicing them. Best case scenario, your third party is offering you a small handful of reports you can view, or you are spending time digging through One Call Center websites
(if you have time). In the last several years however, a few key variables have started to shift in ways that are making telecommunications companies realize that the same historical approach
and limited visibility can prove to be both financially and reputationally challenging, and changes need to be considered. So, what is happening?
• Ticket volume is increasing:
Locate volumes have been increasing between 5-30% annually depending
on the geographies you are in. Even
if you aren’t building a lot of new infrastructure, or advancing your current infrastructure, your competitors likely are, and your third-party locating bills are likely going up because of it.
• Labor, supplies, and gas are all getting more expensive due to inflation: With inflation at a 40-year high, the cost of labor, supplies, and gas is driving the pricing of third- party locating services up significantly. It is not uncommon to hear that locating bills have surged by between 10 - 30% and your finance and senior management teams may be starting to ask questions about what can be done to control these cost in an area that had previously been an afterthought on the balance sheet.
• Project tickets are increasing tremendously, and they are the most expensive work type: With all the long-
Chief Revenue Officer KorTerra
range fiber installations, project
work has been increasing significantly. These ticket types are regularly billed at a much higher hourly rate than
a traditional ticket. Recently, our
team at KorTerra spent time with an organization that saw their number
of project tickets jump from 1,500 four years ago, to over 15,000 today (a 10X increase). This shocking number was something they were blind to prior to their conversations with us.
• Fiber damages are more expensive and have greater negative consequences: Damages to fiber lines are much different than damages to copper lines. According to an article titled “Cutting is Costly”, “the average drops to homes are about 200 feet and cost about $600 to replace. However, large fiberoptic cables could costs $15,000 to $20,000 to repair.” Not only are these types of damages more expensive, they have a larger/broader negative impact on your customer.
In the increasingly competitive environment where people have more options and are more reliant on home internet, you can’t afford to let bad service experiences negatively impact your reputation, resulting in
potential lost customers and lost revenues.
• Regulatory pressures are growing: In a recent conversation, one of the U.S.’s largest telecommunications provider shared that “Locates just came out of the woodwork for us. We started getting fines, and people began to realize just how much locating costs us.” Don’t let this be how your firm realizes there might be a better way to manage this! More and more, some state regulators are starting to increase enforcement and