Published In May 2000
For many electrical contractors, the voice/data/video (VDV) market is a frightening new world, because it is possible to install low-voltage systems incorrectly. However, the profits and opportunities open to competent installers are persuading many to enter the market. The VDV market represents $12 million of Miller Electric's annual business. "But we are really only touching the market," says Ron Autrey, senior vice president of this Jacksonville, Fla., contracting firm that mainly handles large installations. Autrey says the bulk of market demand comes from small businesses in the commercial sector. Unlike many VDV companies starting from scratch, Miller has been installing communications systems for more than two decades. Nevertheless, Autrey says the key to success remains the same, whether for his firm or for a company just entering the market: training and education. "Education is a prerequisite," he advises. "You can't sell what you don't know and you can't maintain what you don't understand." He says his firm took advantage of a host of commercial sources and associations wherever they found them. This practice began when Autrey spent a weekend doing training modules offered by Northern Telecom. Miller employees have since taken courses from Lucent (formerly AT&T), Siecor, and other fiber-related firms. Training programs A.J. Pearson, executive director of the National Joint Apprenticeship and Training Committee for the electrical industry (NJATC), based in Upper Marlboro, Md., emphasizes the importance of a good apprenticeship program. NJATC was created jointly by the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW) in 1941. It has developed into the largest apprenticeship and training program in the electrical industry. Local programs affiliated with the NJATC have trained more than 300,000 apprentices to journeyman status. Currently, NJATC trains about 40,000 apprentices and 50,000 journeyman-level workers each year at 300 locations across the country. During their apprenticeships in the new VDV program, electrical workers are trained in telecommunications wiring, fiber optics, fire alarms, programmable logic controls, power quality, safe job practices, and the National Electrical Code. When an apprentice reaches journeyman status, he or she can receive college credit from the American Council on Education that is recognized and accepted by hundreds of colleges around the country. "This is a registered apprenticeship program," Pearson emphasizes, "with 480 hours of classroom training along with three years of on-the-job training." The program includes a signed indenture between the student and a contractor. At the end of the training period, NJATC tries to place the student in a permanent position with that contractor. "We partner with major manufacturers like AMP, Lucent, 3M, Panduit, and Siecor to help our contractors get people trained," Pearson continues. Indeed, since the manufacturer is backing an equipment warranty, it is important that the installer be familiar with manufacturer specifications. "Often NECA contractors get business by default," says Bill Burnet, manager of contractor marketing for AMP, Inc., in Winston-Salem, N.C. "They're doing electrical work and are asked whether they can do a voice or data installation. But too often they have to turn it down because they are not trained." With a bit of training, a contractor could find VDV installations a profitable business. "If you plan to be serious about this business, you'd better have a separate group that works only in this area," says Brent Neville, group president for SASCO Data Systems in Santa Clara, Calif. "The technology continues to change and you need to be able to change with it," he adds. SASCO is one of the largest electrical contractors around, but Neville still warns newcomers to expect to make a significant capital investment. "You'll need test equipment and other equipment," he says. Although he agrees it is possible to get into the cable plant business on about $10,000, he adds, "An organization like ours spends a half-million dollars a year on equipment." Burnet says AMP sees a convergence trend developing in the United States. VDV, controls, and security are already migrating to structured cabling standards. Since electrical contractors are already installing electricity and controls, VDV is becoming a natural extension for their business. "This industry is manufacturer driven. They manufacture and market equipment to standard and help write the standards for EIA/TIA," he says. There are subtle, but important, differences between 110 and low-voltage jobs. A contractor entering the VDV market will find there is greater emphasis on protecting the system than there is with a typical 110 job. If a fuse blows or a light goes out, it's an inconvenience. If a network crashes, it's a disaster. "Often these networks carry banking and other financial transactions. They absolutely can not be allowed to fail," notes Gerald Thomas, national sales manager for Rox Corp., in Tulsa, Okla. Installations are often run through firewalls and protected by Halon fire-fighting systems. Design consultants complain contractors do not bid the firewall aspects correctly. "Make sure you understand the specifications," Thomas says. "If the specifications are vague, get better instructions from the building owner. Build a dialog with the end user. Talk to the equipment manufacturer." Most vendors realize that electrical contractors perceive moving into the VDV market as a business risk. Many vendors are working to make the jump easier. Even a committed contractor does not want to dive headfirst into the VDV market. There is no easy answer to whether one should buy an entry-level tester or a full-featured tester when business success is uncertain. But vendors can make this decision less painful. Caroline Chen, senior product marketing manager with Wavetek, in San Diego, Calif., points to her firm's "Investment Protection" program. It allows a contractor to buy an entry-level product, which handles Cat 5 and Cat 5E, but Wavetek allows the contractor to trade in the old unit and get a more advanced tester, which offers storage of more test records and ability to handle fiber. "Entry-level electricians are more concerned about price than about the number of records the tester can handle," Chen says. This changes as their business grows. Upgrade programs by her company and others make it easier to move from a simple Cat 5 tester up to a tester capable of measuring Cat 5E or Cat 6. A tester or power meter is probably the most expensive piece of gear a contractor must add to the truck. However, Burnet points out that contractors can rent sophisticated testers from many VDV distributors as a cost-effective alternative. Beyond the initial investment, there are major expenses. "This business is not like outside plant where you can amortize the cost of equipment, like a backhoe, over 5 or 7 years if you take care of it," Burnet says. "Here, because the technology keeps changing, equipment may have a useful life of only 18 months." That quick obsolescence results from rapid market expansion and quantum equipment changes. Market growth There is little question that the market is expanding and that VDV and fiber installations should be a profitable venture for the typical electrical contractor. An independent analyst group, Ovum Inc., in Burlington, Mass., charts the global local loop market growth. "The key competitive battleground in telecommunications in the foreseeable future will be the provision of broadband lines," says Adrian May, a senior analyst at Ovum Inc. "Long gone are the days when operators could differentiate themselves on tariffs alone. Today's challenge is to be the first to provide cost-effective bandwidth. This is driving a huge demand for broadband technologies." May predicts annual local loop installations to grow from 72 million during 1998 to 195 million by 2005. Total global spending on access technologies in 1998 was $23 billion, of which 37 percent was in the United States. The findings are in Ovum's 1999 report, "The Future of the Local Loop: Market Strategies." Strong growth in data communications, fueled by the Internet, is the most important driver. Others include the development of alternative technologies, regulatory encouragement of access competition, and the increasing importance of mobility. The number of broadband lines installed per year will grow from under 2 million in 1998 to over 20 million by 2005. Will fiber rule? Brush up on your fiber installation skills. According to "The Future of the Local Loop" report, fiber installations for business customers will soon dominate the market. However, the larger market for the next century will be broadband for residential customers. Asynchronous digital subscriber lines (ADSL) will suffice for residential customers, but most business customers will want fiber lines. The use of very-high-data-rate digital subscriber lines (VDSLs) will remain limited. Any contractor who is serious about the VDV market should learn how to handle fiber. Fiber is common in the backbone, riser, and campus. Today, however, copper still rules in the last 300 feet to the desktop. 3M Corp., Austin, Texas, conducted research to determine contractors' expectations of fiber components. "Contractors told us that fiber components had to look, feel, and taste like copper," says Dan Silver, marketing manager for 3M's Volition fiber optics line. "To succeed, we had to emulate copper in terms of price and performance." Their Volition line does that. It replaces the traditional fiber splice of four connectors and two couplings with a socket and adapter system costing less from a typical distributor. The splice takes about 90 seconds-including stripping the cable and removing the glass coating-and cuts the cost of doing a typical splice considerably. Volition also has a 3-meter patch cord, which uses the new connectors. This Volition patchcord, called the VF-45, replaces the typical SC or ST cord, which cost slightly more. Rounding out 3M's product line is the Volition tester, which works at 850nm and 1,300nm and can store up to 500 readings per wavelength. It can be used to test SC or ST and operates for 62.5/125-micron and 50/125-micron fiber installations. "The last great hurdle with fiber is connectorizing," says Jordon Cutler, data communications marketing manager for Alcoa Fujikura, Ltd. (AFL), of Spartansburg, S.C. He says fiber, on a foot-by-foot basis, costs about the same as the latest Category 6 copper cabling. However, fiber has been losing the price battle on getting connected. Recognizing this, many firms cooperated over the past couple of years, trying to overcome the hurdle of port density. The solution for many is the MT-RJ form factor for fiber connectivity. "MT-RJ will make fiber to the desktop a reality," Cutler predicts. It was not made a standard because the standards bodies elected to let market factors determine an eventual winner. This made both manufacturers and users cringe. The advantage of MT-RJ is that it allows design of a network with twice the number of ports on the face of a piece of equipment, more closely aligning fiber density with traditional gear. AFL supports MT-RJ, as do many other major manufacturers. Learning experience Companies make it easy to learn about their products and systems. MT-RJ information, for example, is available on most manufacturers' Web sites. Beyond specific standards, there are training programs available either on-line or in a classroom. 3M has a self-paced virtual training program on fiber splicing at its Web site: www.3M.com/volition. Look for the training section under the product heading. AFL's Web site, www.afl-link.com, provides warranty forms that ensure customers the lifetime warranty protection. Most manufacturers offer classes to bring electricians up to speed. For example, AMP offers the AMP ACT series of training. One such AMP course, "Designing LAN Cabling Systems," is an intensive program for individuals designing or installing LAN cabling systems. The course, which involves about 65 percent hands-on training, prepares students to make design criteria decisions associated with network cabling systems. This course emphasizes the TIA/EIA standards-based structured cabling systems that use an open architecture, and ways to accommodate other LAN technologies, such as Ethernet, token ring, IBM-3270, fiber distributed data interface, and asynchronous transfer mode. While referring to TIA/EIA standards, students design several different LAN cabling systems for various networking applications. These designs include campus drawings, floorplan layouts, link diagrams, telecommunications closet rack elevations, the development of a bill of materials, and a design narrative. More information is available at (800) 331-9858, ext. 63808 at www.amp.com/networking. Most major manufacturers make videos available to union groups, vocational schools, and professional organizations. Staff training never ends Contractors without trained staff should stay away from VDV jobs until they are up to speed, but contractors who have a force in place should be selling the benefits of a trained staff. By setting up a program that couples nonprofit with commercial sources, a contractor can access a wealth of educational information on VDV systems technologies. There is little doubt that someone will be making a good living from the VDV market. Learning to install and test VDV and fiber correctly is the first step to take. "If you are doing electrical installations, a lot of the work ethic and techniques to install voice/data/video systems are the same," Burnet says. "The key is to make the business decision whether or not to get into the business. In most cases, the only thing keeping contractors out of a good business is fear of the unknown." HARLER, a contributing editor to Electrical Contractor, is based in Strongsville, Ohio. He can be reached at (440) 238-4556 or firstname.lastname@example.org.