U.S. Department of Labor • U.S. Bureau of Labor Statistics

Summary 09-06 / May 2009 

the new definition for wired 

telecommunications; satellite 

Internet service providers became part of satellite telecommunications; and dial-up Internet service providers, which 

require connections from external infrastructure, became a 

component of “other telecommunications.” NAICS codes 

and CES tabulating codes may 

differ slightly due to disclosure or sample-adequacy issues. For example, the satellite 

telecommunications industry 

is an independent four-digitlevel industry in NAICS, but 

CES includes it in “other telecommunications.”

With the implementation 

of NAICS 2007, the wired 

telecommunications industry was redefined to include 

cable and other program distribution, along with part of 

Internet service providers. 

The wired telecommunications carriers industry has lost 

319,000 jobs since its peak in 

December 2000. By contrast, 

wireless telecommunications, 

which underwent no structural 

change, experienced moderate 

growth of 15,000 jobs since 

its trough in September 2003. 

Altogether, telecommunications employment peaked in 

March 2001, and since then, 

476,000 jobs have been lost 

through April 2009.

The telecommunication 

resellers industry purchases 

network capabilities from external sources and resells the 

services to private households 

or businesses. The industry 

A New Approach to Classifying Industries in the 

Information Sector

The information sector is characterized as a dynamic 

sector with a rapidly changing 

landscape influenced by new 

ideas and technologies. By nature, this has made it extremely 

difficult to effectively categorize its components over time 

utilizing the standard methodology employed to structure 

the North American Industry 

Classification System (NAICS). With the release of January 2008 data on February 1, 

2008, the Current Employment 

Statistics (CES)1 program at the 

Bureau of Labor Statistics upgraded from the 2002 NAICS to 

NAICS 2007. The update resulted in minor definitional changes 

within manufacturing, financial 

activities, and professional and 

technical services, but also introduced significant changes in 

the structure and methodology 

used to classify industries within the information sector in an 

attempt to maximize its validity 

over time.

The Economic Classification Policy Committee (ECPC) 

develops recommendations for 

the reclassification of industries 

every 5 years, in collaboration 

with Mexico’s Instituto Nacional de Estadística, Geografía e 

Informática (INEGI) and Statistics Canada, based on four 

guiding principles:2

1. Structure NAICS to group 

establishments on the basis of their production 

processes.

2. Give special attention to 

industries that are new, 

dynamic, service oriented, 

or involved in the production of advanced technologies. 

3. Retain time-series continuity as much as possible.

4. Strive for compatibility 

with the two-digit level 

of the International Standard Industrial Classification of All Economic 

Activities (ISIC) of the 

United Nations.

The information sector provided some unique structural 

challenges. Specifically, traditional telephone and television cable companies have 

converged to offer telephone, 

broadband Internet, and cable 

television services. This convergence made it increasingly 

difficult to define the industries in accordance with ECPC 

guidelines.

To resolve the problem, the 

ECPC restructured telecommunications based on the type 

of transmission facilities and 

infrastructure operated by the 

establishments, including network technology. With the release of NAICS 2007, telecommunications was disaggregated 

into four component industries: 

wired telecommunications carriers, wireless telecommunications 

carriers (except satellite), satellite 

telecommunications, and other 

telecommunications. The first 

three telecommunications industries are interrelated by their infrastructure, whereas the category 

of other telecommunications is 

representative of establishments 

that provide support activities, 

but have not developed their own 

internal telecommunications infrastructure.3 

These new infrastructurebased aggregations also split 

Internet service providers into 

three distinct categories: broadband Internet service providers 

offering their own Internet infrastructure corresponded with 

1 The employment data used in this 

summary are from the Current Employment Statistics (CES) program, 

which surveys about 150,000 nonfarm 

businesses representing about 390,000 

work sites monthly. For more information on the program’s concepts and 

methodology, see “Current Employment Statistics Technical Notes,” on 

the BLS Web site at http://www.bls.

gov/ces/#technical (visited 4/27/09). 

CES data are available at www.bls.

gov/ces. Data used in this summary 

are not seasonally adjusted. 2 The ECPC is a committee within 

the Office of Management and Budget (OMB) and also includes representatives from the Bureau of Labor 

Statistics, the Bureau of Economic 

Analysis, and the Census Bureau. 

For more information on the ECPC 

and NAICS, see http://www.census.

gov/eos/www/naics/ (visited April 

27, 2009) 3 In order to publish a CES employment series, an industry must 

meet certain criteria related to employment size and sample size. The 

satellite telecommunications industry 

has failed to meet the criteria; therefore, its employment has been part of 

“other telecommunications” under 

both NAICS 2002 and 2007. This 

CES change is based on the standard 

operating procedure of classifying a 

CES series that has inadequate employment or an inadequate sample 

into the most relevant “other” industry within the sector.


has experienced difficulties 

since 2001 because of market 

saturation by cellular phone 

service providers, the decline 

of long-distance calling over 

landlines, and inadequate market power.4 

Telecommunications resellers had gained 54,000 jobs in 

the 5 years following the industry’s trough in March 1996, 

a period of rapid expansion 

in cellular phone services. 

Since then, resellers have lost 

119,000 jobs through April 

2009. The ECPC considers 

the industry life cycle when 

evaluating an industry. This 

consideration, along with the 

fact that resellers do not possess an infrastructure to support 

telecommunication services independently, led the ECPC to 

reclassify telecommunications 

resellers into the residual, “other telecommunications.”

Internet publishing and 

broadcasting had been considered an emerging industry until 

the tech bubble burst just prior 

to the 2001 recession. To compensate for the decline in the industry’s size, it was combined 

with Web search portals to form 

a new five-digit industry: Internet publishing and broadcasting and Web search portals. 

Establishments in this industry 

employed 113,000 at its peak 

in July 2000, but by 2004 only 

65,000 jobs remained. Since 

2004, employment in the industry has grown, but has yet 

to return to its earlier peak employment level. The change in 

the methodology for organizing 

telecommunications for NAICS 

2007 provided the foundation 

for redefining Internet service 

providers.

Chart 1 shows how employment in the information sector 

was distributed before and after the conversion. The top pie 

chart uses March 2006 benchmark data to represent NAICS 

2002 employment ratios and 

the chart on the bottom uses 

March 2007 benchmark data to 

represent NAICS 2007 employment ratios. The data represent 

the last and first benchmark 

employment levels surrounding 

the NAICS conversion. 

Exhibit 1 illustrates the 

reclassification of the industries in the information sector, 

from NAICS 2002 to NAICS 

2007.

For additional information, contact Brett Caillier, an 

economist in the Division of 

Current Employment Statistics, Office of Employment 

and Unemployment Statistics. 

E-mail: caillier.brett@bls.gov. 

Telephone: 202-691-6555. 

Information in this summary will be made available 

to sensory-impaired individuals upon request. Voice phone: 

202-691-5200. Federal Relay 

Service: 1-800-877-8339. This 

report is in the public domain 

and may be reproduced without permission. □

4

See “Many wireless resellers going under,” USA Today, on the Internet 

at http://www.usatoday.com/money/

industries/telecom/2008-05-05-wireless-resellers-cellphone_N.htm (visited 4/27/09).


Information--NAICS 2002

Motion picture & sound

12.4%

Broadcasting, except 

internet

10.7%

Internet pub. & 

broadcasting

1.1%

Wired telecom 

15.9%

Paging

0.6

Cellular & other wireless 

5.9%

Telecom resellers

4.2%

Cable & other program

distribution

4.6%

Satellite & other telecom

0.8%

ISPs & web search portals

3.9%

Data proc & related 

8.7% Other information

1.7%

Publishing, except internet

29.6%

Unchanged with NAICS 2007 update Telcommunications

Data processing, hosting, and related services Other information services Internet publishing and broadcasting

Chart 1. Employment distribution for industries in the information sector, NAICS 2002 to NAICS 2007

Information--NAICS 2007

Motion picture & sound

12.4%

Broadcasting, except

internet

10.8%

Wired telecom 

21.8%

Wireless telecom, except 

satellite 

6.8%

All other information

Data proc, hosting & 1.8%

related 

8.9%

Internet pub. & 

broadcasting & web

search portals

2.3%

Publishing, except internet

29.8%

Other telecom

5.5%

Unchanged with NAICS 2007 update Telcommunications ISP's search portals and data processing Other information services

NOTE: The NAICS 2002 chart uses March 2006 benchmark data and the NAICS 2007 chart uses March 2007 benchmark 

data to develop employment ratios for each NAICS structure.

Internet service providers (ISPs) 

and Web search portals

3.9

Satellite and other telecom

0.8

Cable and other program

distribution

4.6

Telecom resellers

4.2

Cellular and other wireless

5.9

Paging

0.6

Wired telecom

15.9

Internet publishing and

broadcasting

1.1

Broadcasting, except

Internet

10.7

Motion picture and sound

12.4

Publishing, except Internet

29.6

Other information

1.7

Data processing and related

8.7

Publishing, except Internet

29.8

All other information

1.8

Internet publishing and 

broadcasting and 

Web search portals

2.3 Data processing 

hosting and related

8.9

Wireless telecom,

except satellite

6.8

Wired telecom

21.8

Other telecom

5.5

Broadcasting, except

Internet

10.8

Motion picture and sound

12.4

Other information services Internet service providers (ISPs)

search portals and data processing Unchanged with NAICS 2007 update Telecommunications

Unchanged with NAICS 2007 update

Internet publishing and broadcasting

Telecommunications

Data processing, hosting, and related services Other information services

(In percent)


Exhibit 1. Reclassification of the information sector, NAICS 2002 to NAICS 2007

511—Publishing industries, except 

Internet

None 

512—Motion picture and sound recording None 

515—Broadcasting, except Internet None 

516—Internet publishing and 

broadcasting 

Discontinued and moved into new NAICS 2007 industry Internet 

publishing and broadcasting and Web search portals (51913) 

517—Telecommunications —

5171—Wired telecommunications 

carriers 

Combined with 5175—Cable and other program distribution and 

with the broadband Internet service providers (for example, cable, 

DSL) portion of 518 

517212—Cellular and other 

wireless carriers 

Discontinued and combined with paging (517211) as Wireless 

telecommunications carriers (5172) 

5173—Telecommunications resellers Discontinued and moved to Other telecommunications (5179) as 

Telecommunications resellers (517911) 

5175—Cable and other program 

distribution 

Discontinued and moved into Wired telecommunications carriers 

(5171) 

5179—Satellite and other 

telecommunications 

Moved to Other telecommunications (5179) and combined with the 

Internet service providers providing services via client-supplied 

telecommunications connection portion of 518 

518—Internet search providers, search 

portals, and data processing 

Changed in scope. Moved the Web search portals portion of 518 to 

Internet publishing and broadcasting and Web search portals 

(51913) and moved the Internet service providers providing 

services via client-supplied telecommunications connection portion 

of 518 to Other telecommunications (5179). Also moved the 

Broadband Internet service providers (for example, cable, DSL) 

portion of 518 to Wired telecommunications carriers (5171) 

519—Other information services Moved to All other information services (51919) 

511—Publishing industries, except 

Internet

511—Publishing industries, except Internet 

512—Motion picture and sound recording 512—Motion picture and sound recording 

515—Broadcasting, except Internet 515—Broadcasting, except Internet 

517—Telecommunications —

5171—Wired telecommunications 

carriers 

5171—Wired telecommunications carriers; 5175—Cable and other 

program distribution; and the broadband Internet service providers 

(e.g., cable, DSL) portion of 518 

5172—Wireless telecommunications 

carriers, except satellite 

517211—Paging and 517212—Cellular and other wireless carriers 

5179—Other telecommunications 5179—Satellite and other telecommunications and the Internet 

service providers providing services via client-supplied 

telecommunications connection portion of 518 

517911—Telecommunications 

resellers 

5173—Telecommunications resellers 

518—Data processing, hosting and 

related services 

Part of Internet search providers, search portals, and data 

processing (518) 

519—Other information services —

51913—Internet publishing and 

broadcasting and Web search 

portals 

The Web search portals portion of Internet search providers, 

search portals, and data processing (518) and Internet publishing 

and broadcasting (516) 

51919—All other information 

services 

519—Other information services

NOTE: Detailed employment ratio tables for the NAICS 2007 update can be found at http://www.bls.gov/ces/cesnaics07.htm.

NAICS 2002 Change(s)

NAICS 2007 Composed of 2002 NAICS industries