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The Fiber Broadband Association held a webinar breaking down the final Buy America waivers for the BEAD program
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Combined ONTs/ONUs don’t have to be manufactured in the U.S.
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Service providers must verify they’re following Buy America rules to NTIA
The NTIA last Friday finalized Build America, Buy America (BABA) waivers for the Broadband Equity, Access, and Deployment (BEAD) program. Here’s what you need to know.
Let’s start with the basics. BABA waivers will remain in effect for the next five years, until February 22, 2029. However, the Department of Commerce will review the rules annually to see if any changes should be made, said Thomas Cohen, legal counsel at Kelley Drye & Warren, during an Fiber Broadband Association (FBA) webinar this week.
These rules are unique to the BEAD program, they don’t apply to any another federal program. Cohen noted the Department of Agriculture’s Rural Utilities Service (RUS), which oversees the ReConnect program, just released its own BABA waivers.
NTIA first proposed waivers to Build America requirements last August. Last week, we provided a rundown of some of the key waivers and you can find the complete list on the DoC’s website.
Cohen explained NTIA had previously covered most of the details in the waivers. So what’s new?
According to BABA rules, optical network terminals (ONTs) and optical network units (ONUs) must be produced in the U.S. That means printed circuit board assembly, software integration, chassis assembly, testing and quality assurance as well as packaging and shipping must all happen stateside.
Combined ONTs/ONUs, however, don’t have to adhere to Buy America requirements. The DoC found these components are mostly made overseas and that due to the economics of manufacturing them, vendors are unlikely to invest in domestic manufacturing capacity to meet the demands of BEAD.
“This is sort of a new ruling out of NTIA based on the comments that came in,” Cohen said.
A “major area of debate” when NTIA first proposed BABA waivers was concerning enclosures. Essentially, those are fully enclosed to help protect electric cabling and other equipment from the elements (i.e., rain, ice, dust, external heat).
“There was incredible discussion from a lot of FBA members about the fact so much of this manufacturing was occurring in Mexico and what should be done in the U.S.,” stated Cohen.
Although NTIA proposed to waive the 55% cost of components requirement for the four electronic categories that must be produced in the U.S. (OLTs/remote OLTs, OLT line cards, optic pluggables and standalone ONTs/ONUs), it declined to waive that requirement for enclosures.
Self-reporting is key
“All equipment that is going to be used needs to be reported to Commerce and NTIA,” Cohen said. “You need to certify that the equipment you’re selling to sub-recipients (service providers getting BEAD money) meet” the BABA requirements.
Also, service providers must let NTIA know if they purchase any items from foreign sources. You can bet NTIA will be making a list (and checking it twice) of these transactions.
“This is under the category of trust and verify. This is not just trust,” added Cohen.
Curious about which vendors are gearing up for Buy America rules? We’ve covered stateside manufacturing announcements from Nokia, STL, Vecima, among others.