The NTIA floated a draft waiver of its “Build America, Buy America” fiber provisions for its BEAD grants this week. It said in a blog post that following President Biden’s State of the Union address in January, NTIA would take a strict approach to enforcing the Build America, Buy America requirements for BEAD grants.
Now, NTIA says it’s ready to provide specifics. “The justification for a firm approach to enforcement is clear,” says NTIA. “Internet for All is a once-in-a-generation investment to expand and upgrade America’s high-speed Internet networks, with $42.45 billion in funds from the BEAD program alone. Those American tax dollars should be used to buy products made in America and to create hundreds of thousands of American jobs.”
Buy America regulations require that projects receiving federal funding must source material and 55 percent of the cost of components from American manufacturers as part of the White House’s initiative to enhance domestic manufacturing. The proposed waiver preserves the 55 percent cost requirement for fiber optic cables, according to Broadband Breakfast.
But the waiver proposes to waive the 55 percent cost of components test for the four categories of electronics that are not waived for all Buy America requirements – optical line terminals and remote optical line terminals, OLT line cards, optic pluggable and optical network terminals and optical network units. Electronics will still need to be made in the United States, but U.S. components will not need to hit 55 percent of the total cost.
NTIA initially received pushback from industry about the cost and manufacturing restrictions. Many commenters noted that integrated circuits in the components alone make up the majority of the cost of electronics and are primarily manufactured in Southeast Asia, NTIA Policy Advisor William Arbuckle told Fiber Connect attendees on Wednesday, according to Broadband Breakfast.
Under the waiver, the majority of fiber broadband equipment will still need to be made in the U.S., including optical fiber, fiber optic cable, key electronics and enclosures, notes NTIA. It explains that the policies recommended in the draft waiver will ensure that close to 90 percent of BEAD funding spent on equipment will be spent on gear manufactured in the United States.
NTIA’s established criteria prioritizes equipment made in the U.S. “targeted for onshoring”:
- Strategically important technologies, like those that ensure the security, integrity, and reliability of network data, should be produced in America.
- If a product’s domestic manufacturing line can be scaled quickly, it should be produced in America.
- And if a product—like the fiber-optic cable so critical to deploying high-speed Internet networks in communities throughout the country—comprises a significant portion of the overall network spend, it should be produced in America.
NTIA acknowledges there are “limited” circumstances where a nonavailability waiver will be needed for certain pieces of broadband equipment. It cites the lack of domestic semiconductors as an example of a need for this waiver to meet BEAD construction deadlines.
It points to several companies that have said they plan to open or expand fiber optic cable production in the U.S. specifically to help companies meet BEAD criteria. They include Nokia, telecom equipment manufacturer Adtran, Corning, CommScope, and Prysmian, Inside Towers reported. NTIA says more companies will come forward in 2024, with plans to expand U.S. production.
Stakeholders will have an opportunity to comment on this proposal for 30 days, until September 21. NTIA will review the comments, and then decide whether to change or finalize the proposed waiver.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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