One string attached to Broadband Equity, Access and Deployment (BEAD) funds is that recipients must use components for their fiber networks that are primarily made in America.
Congress passed the Build America, Buy America Act (BABA), which requires that fiber networks funded by BEAD must use components that are at least 55% made in America.
But there has been some pushback from industry, saying that it’s difficult to source some components in the U.S.
Yesterday, the National Telecommunications and Information Administration (NTIA) issued a proposed waiver to some of the Buy America rules for BEAD recipients. NTIA wrote that certain items “are not produced in the United States in sufficient and reasonably available quantities or a satisfactory quality that can fully comply with all requirements of the Buy America Preference under BABA.”
Specifically, NTIA proposes the following waivers to the Buy America requirements:
- The overclad cylinder of fiber optic cables may be sourced outside the U.S. But the optical glass inside those cables must still comply with the Buy America rules.
- Enclosures such as pedestals, terminals and fiber distribution frames that house active electronics and fiber splits or splices may be sourced outside the U.S.
- All electronics in BEAD Program projects may use components sourced outside of the U.S. with the exception of four categories of electronics. But those four categories are important. They include: i) Optical Line Terminals (OLTs) and Remote Optical Line Terminals; ii) OLT Line Cards; iii) Optic Pluggables; and iv) Optical Network Terminals (ONTs) and Optical Network Units. All four of these categories must source at least 55% of their components from within the U.S. However, other types of electronics in fiber networks such as routers, switches, optical amplifiers, and power systems may be sourced outside the U.S. And components of fixed wireless networks such as antennas may also be sourced outside the U.S.
NTIA wrote that as part of its supply chain research, it found that semiconductors, which are key components of essentially all electronics that are used to build broadband networks, are all currently manufactured outside the U.S. While Congress has passed the historic CHIPS Act to spur major investment in domestic semiconductor manufacturing, “the construction timeline and type of semiconductor fabrication plants mean that the impact of that investment is unlikely to be realized during the time period needed for the BEAD Program.”
NTIA opened a 30-day comment period for the waiver — until September 21. After the comment period, the agency will determine whether to modify or finalize the proposed waiver.
Meanwhile, industry vendors have been developing their own strategies to comply with the Buy America rules. Last week, Adtran said it will invest up to $5 million at its manufacturing facility in Huntsville, Alabama, to increase the production of telecom equipment, including OLTs and ONTs.
Nokia is teaming with longtime manufacturing partner Sanmina to bring production of fiber network electronics to the U.S. state of Wisconsin. And both CommScope and Corning have announced expanded manufacturing plans, as well.
**UPDATE: After this story published NTIA reached out in answer to our question as to why it did not propose any waivers for OLTs or ONTs. It cited three different blogs, where it touted the expansion of OLT and ONT manufacturing in the U.S.