LinkExchange Member
Updated November 1997
Take the example of automatic switching, invented by a Mr Strowger, a Kansas City undertaker, to circumvent bribed switchboard operators diverting his calls to a competitor. If automatic switching, first introduced to the UK in the 1920s, had not been developed, then probably the entire UK population would now have jobs as BT operators just to connect the present volume of speech and data traffic. So, while jobs have been destroyed, society has increasingly enjoyed the benefits of instant global communication at relatively lower prices.
Over the past thirty years, there have been huge technical advances. Strowger electromechanical switching was supplemented by crossbar and electronic switching. Now, even those systems have, along with Strowger, been almost totally replaced by digital switching in the UK.
Similarly with cable and transmission technology, where, interestingly, developments in other industries have impacted on telecommunications.
In 1965, 'Automation', published by the Communications Workers of America, predicted that "LASER techniques would have to employ underground pipes. These pipes would have to be either supported by large reinforced concrete beds or provided with servo-controlled mirrors to adjust for movements owing to continuous minor earth dislocations. The high costs attending such installations probably preclude the use of LASERS in common carrier systems for at least the next ten years..........."
To have adjusted to today's bandwidths, the servo-controlled mirrors would each have needed the precision of the Hubble space telescope. What in fact happened was that in another unrelated industry, the purity of glass was refined to the extent that light could be transmitted through glass over long distances. Hence the optical fibre cables and the astounding bandwidth which was unleashed.
What is common to all of these changes, is that scientific and engineering advance, backed by huge capital investment, has radically displaced jobs.
And what happens in telecommunications affects every other industrial sector.
The conjunction of telecommunications, mechanical engineering and computing created the Automatic Telling Machine. ATMs provide enhanced services to banking customers (no queues, reliable online account balances) but at the cost of thousands of banking jobs.
Similarly, as each supermarket purchase is logged using the bar code, the store automatically records which item sells fast - and which items need to be replenished on the shelves, in the stock room and in the centralised warehouse. It also largely determines the supermarket group's purchasing strategy, with ongoing effects in manufacture, agriculture, fishing, food processing, packaging and canning. This undoubtedly helps to keep food prices relatively low, and may enhance consumer choice (or imprison it within mass trends), but at a cost of thousands of jobs in the retail, distribution and warehousing industries.
But a feature of current developments is the sheer speed with which the scientific discoveries take place - and the short lead times for engineering application. Techniques which develop in microcircuitry can be very quickly applied in both computing and telecommunications. The concept of convergence, whereby the the telecommunications and computing industries gradually assume the same characteristics and technology, has been around since at least the early 1970s. However, the point of convergence theory is that there is a point of technological convergence - and there is strong evidence that we have now arrived at that point. Digital compression techniques such as ADSL (Asymmetrical Digital Subscriber Loop) will radically increase the bandwidth capability of the traditional copper telecommunications network. ATM (Asynchronous Transfer Mode - not telling machines) provides enhanced switching techniques and will be developed by both telecommunications and Internet providers. In essence, telecommunications workers are about to experience a second tidal wave of technological displacement within a decade.
An additional factor is the convergence of broadcasting with telecommunications and computing. Digital compression already has the ability to squeeze ten satellite television channels out of the bandwidth capacity of a single channel. In a singularly depressing view of the near future, Koos Becker of NetHold told a Financial Times conference that 4,500 digital satellite television channels could be available by the year 2000. Multimedia magnates like Rupert Murdoch see satellite becoming a prime driver in the delivery of electronic books, newspapers, music and software to both TV sets and personal computers. Apart from navigation systems and satellite driven mobile telephony (see below), satellite communication tends to be one way and not interactive, but the sheer volume of information potentially available by satellite delivery will have a profound effect on present thinking on the development of the Internet and the 'information superhighway'.
The development of the telecommunications industry is becoming very complicated with new alliances being made or broken every day; there are also large numbers of "new entrants" who provide networks at local, regional, national or, in some cases, global levels; respectively outfits like cable TV providers, Scottish Telecom, Mercury and Iridium. This last firm, Iridium, a consortium set up by Motorola, intends to provide a global mobile phone system based on 66 satellites orbiting at 2,000km above the Earth. Consumer charges are intended to run at $3 per minute for calls connected to anywhere in the world. This compares with a current $10 per minute for comparable systems; expensive by most people's standards, but attractive to corporate users. In any case, start up prices invariably fall as market share increases.
Other "new entrants" don't even own networks, but lease high capacity lines from the telecommunications companies ('Telcos') and then resell them by adding other services. For instance, some companies can provide international calls over leased lines at rates which undercut the very Telcos from whom the lines are leased.
Again, large volumes of data traffic are now transferred over the Internet - itself a 'virtual' network. There actually is no distinct or identifiable Internet network; it is a very complex web of leased lines connecting computers owned by Internet service providers, academic institutions, governments, NGOs and commercial organisations. Users dial up a local Internet service provider normally for the price of a local call; that call can then be switched to any connected computer anywhere in the world. With the World Wide Web, a graphical interface, users can browse from site to site - across countries and continents - all for the price of a local call, and a monthly subscription of around UKP 5 - 10 to an Internet provider. The traffic switching is undertaken by ordinary computers and not telephone exchanges.
London stockbrokers Durlacher expect more than 200 million users by the year 2002. If anything, this is a conservative estimate: most sources believe that there are currently between 33 and 45 million Internet users. However it is also widely believed that the number of users doubles each year.
As well as text, data and graphics transfer, the Internet can now provide low cost international telephony - normal speech at local call charges! The quality has rapidly improved and outstanding problems such as time lag in speech transfer may well be eliminated by the use of ATM (telecommunications) technology.
Between the Internet and the resale of leased lines, it is clear that the telecommunication industry is more than just the Telcos. In fact, the Telcos have now lost control of significant parts of network traffic, and, if anything, this trend is likely to continue.
The complexity of convergence, and its global nature, is such that it will become increasingly difficult for governments or groups of governments to regulate effectively. Under the Tories, the UK now has one of the most deregulated telecommunications sectors in the world. One exception to this is the 'asymmetry rule' which prevents BT and Mercury providing entertainment services (cable TV) down the same line as telecommunications services; this is designed for the mainly US owned cable TV companies to build up market share in local telecommunications services. Similarly, by imposing the RPI-x formula and the transparency of BT's accounting to its competitors, the government regulator Oftel formula is actually preventing BT from developing new services and a flexible pricing structure. It is highly questionable whether any of these measures are actually in the consumer interest, because they hold back the mass social benefits of technology in education, health and community resources.
Because of liberalisation, a global market for telecommunications, and a lack of regulation in many of the new areas, competition is exceedingly fierce.
Each employer is 'reducing their cost base' (ie getting rid of jobs) in order to retain or win market share. However, there is a tendency for prices to fall and the network generated profit margins to become much tighter. As a consequence, many of the world's Telcos no longer believe that the network will remain their prime source of revenue and profit; rather it will come from new, as yet largely undefined, services based upon the network. In other words the network becomes the platform for the new services which will generate the big bucks.
In turn, price cutting and the technological creation of vast amounts of spare capacity in the networks will probably lead to an explosion in telecommunications and new services in the North American, European and Pacific rim regions.
In summary, telecommunications industry currently has several radical features;
* Convergence with computing, broadcasting and entertainment - 'Multimedia'
* Development of a 'ubiquitous global virtual network'
* Phenomenally fast rate of innovation and application
* A global market driven industry
* Moves towards free market and deregulation (notwithstanding Oftel's restrictive attitude to BT and Mercury)
* The network becoming less important as the Telcos' prime source of revenue
* The 'network as a platform' for imaginative new services
* Large numbers of 'new entrants' who provide telecommunications based services - but who do not own any network or switching
* A growing skill gap between the industry's technocrats and those with the traditional skills of wiring, jointing and cabling - the 'hewers of wood and the drawers of water'
* The growth of a mobile, self-employed, or part time, or casual labour force outside of the traditional 'core' workforce
If we had no personal involvement in this industry, then objectively, these would be very exciting times. But for workers in the traditional Telco networks such as BT and Mercury, these features pose huge threats and challenges. How then do we protect employment levels and conditions?
The history books do not provide good examples of workers being able to stop technological developments; indeed, almost all of us must work in industries which displaced their predecessors. The Luddites, in the absence of democratic rights and free trade unions, used machine smashing to exact better prices for their labour power, not the popular misconception of trying to stop innovation. Workers therefore must focus on how to adapt to those changes, as well as winning back some of their conditions, influence and self esteem.
Part of the picture must be for a shorter working week and working year; but the case for reductions in hours and more holidays stands on its own merits and probably could not begin to cope with the pressure on jobs, at least not in today's free market capitalism. Even those progressive measures could not have coped with the 100,000 jobs already lost in BT. Relatively new entrants in the UK like Mercury and Nynex have been shedding staff - while the industry sector expands, labour is being replaced by capital. Frankly, the issues posed can not be resolved within one sector of industry: the problems of technological job displacement, structural unemployment and the growth of the so-called 'underclass' are too big for one union or industry, and need major political initiatives to be rectified.
But within the industry, the telecommunications unions will have to put far greater emphasis on trying to intervene at a strategic level with employers, and where appropriate, with government. The haemorrhaging of jobs has a disastrous effect on morale - both for the employers as well as trade unionists - so greater emphasis must be placed on alternative work, moving into new markets and providing the skill retraining which is required. This will not be an easy task for unions, as large Telcos are extremely complex and conservative organisms which do not readily learn from experience and have difficulty ingesting or developing new ideas. The industrial relations framework needs to be extended to involve the unions at strategic level, rather than exclude them as was a predominant feature of the Thatcher era.
The Communication Workers Union and the Society of Telecom Executives recently concluded an agreement with BT to set up a European consultative council, despite the UK government's refusal to endorse the Maastricht social charter provisions. This has been generally welcomed as a step in the right direction by allowing workers to have greater understanding of, and input into, the big issues. The UK employees will be represented by union national executive members as well as prominent lay members annually elected in a national ballot. It is the CWU's intention that this should become a model where workers and their unions have a significant consultative role on the strategic issues of jobs and employment, but it takes two to tango and it remains to be seen whether the reality will meet the high expectations of the union. The habits of the 80s will be hard to shake off.
This view of increased strategic involvement must take account of the fact that workers in the organised sectors of industry are under pressure from mass unemployment and the inferior conditions of unorganised workers. In this particular industry, the unionised areas tend to be dominated by the former public sector companies like BT, and unions like the CWU will increasingly need to look outside its traditional membership. From its base in BT and the Post Office, the CWU is increasingly recruiting workers from within the new telecommunications and cable TV sector where conditions for field staff ('outside' workers) are especially bad. At the other, highly skilled, end of the scale, there is a small but growing group of workers engaged in very sophisticated work akin to that of computing professionals. Within both ends of the skill range, there has been a significant development of 'non-core' workers - who could be self employed, part time, subcontractor or agency staff, or on short term contracts. Unions therefore also need to consider their needs as well as promulgating the arguments for recognised employers to 'in-source' work rather than incrementally 'out-sourcing'.
Workers organised collectively in trade unions have far better opportunities of improving their conditions than they ever could by standing alone, but with large numbers of unorganised workers either working from home or being constantly mobile, we have to look to new ways of contacting these people. One of the means of reaching technological workers must be through the technology itself.
But the unions must also be relevant to the needs of the growing 'casualised' workers in the new companies. Last year, we joined the Society of Telecom Executives in running Opus II, a job placement agency for STE and CWU members leaving BT on redundancy. This is not only a service for union members and employers interested in quality labour, but it also allows the union to 'gently' access the unorganised firms by having CWU and STE members placed there.
This type of initiative is still in its early stages, but with a bit of imagination and boldness, perhaps it is not too fanciful to imagine it developing into a means of recruitment as well as a means of membership retention.
The Internet would be the ideal way to reach those workers - there are 36 different telecommunications newsgroups on the Internet, and it is clear that many of the discussion contributors work within the industry. We need to reach out to those people, perhaps advertising our World Wide Web homepage on which we soon expect to be recruiting online. Perhaps Opus II could be advertised and promoted in a similar way.
Can we meet the challenges of technology and globalisation? And how do we do it? For the challenges are immense - probably no industry has ever operated in such a rapidly changing global market.
Certainly there are no easy solutions; at best, a combination of policies and initiatives. Workers within this industry need to look at;
* The threat of further technological job displacement
* The threat of the global free market
* Hours, wages and conditions
* Sharing the benefits of technology - a shorter working life
* Abolishing high overtime and low pay in the sector
* Organising the unorganised
* Making the unions pro-active - fighting for strategic influence
* Securing access to new jobs and services
* Skill retraining for the new jobs and services
* A social chapter to regulation - the right to trade union membership and the provision of decency thresholds covering hours, wages and conditions in the industry
That list is not particularly new or radical, nor is it exhaustive. But it encapsulates the features which must be faced by workers and their unions within the sector. These issues do not take into account any future quantum leaps in technology - this is now!
We want to see the Communication Workers Union having a major role in the next century with the industry's workers enjoying improved conditions and job security; we either face up to these immense challenges and adapt - or we wither, albeit gradually. Personally, it is not my intention to preside over tomorrow's equivalent of the National Union of Canal Weed Gatherers and Sluice Gate Repairers.
Donald MacDonald
Vice President
Communication Workers Union (UK)
3rd March, 1996
Copyright © Donald MacDonald 1996
Established in 1978, the Scottish Trade Union Review is Scotland's Leading Political & Current Affairs Magazine.
The Review is sold on a subscription only basis. It is read widely in the trade union and labour movement here and abroad, as well as in school, college and university libraries.
STUR Subscription Details
The Review is published bi-monthly by STUR Ltd with the support of the STUC.
Annual Subscription (6 issues) including P&P (all prices in Pounds Sterling)
UK 10: Overseas 25
Cheques payable to:
STUR Ltd
Department of Economics,
Glasgow Caledonian University,
Cowcaddens Rd,
Glasgow G4 0BA
Scotland
TEL: 0141 331 3302
FAX: 0141 331 3293