In a significant move to bolster the nation's infrastructure, President Biden's Bipartisan Infrastructure Law has introduced the Build America Buy America Act (BABA). This act places stringent regulations on the sourcing and manufacturing of materials used in government-funded projects, with a particular focus on burgeoning broadband networks. The Build America Buy America Act carries a two-fold criterion, demanding that materials be both manufactured and sourced predominantly from within the United States. This article delves into the intricacies of BABA, its recent waivers, and the implications for the Broadband Equity Access and Deployment Program (BEAD).
Understanding the Build America Buy America Act (BABA)
The Build America Buy America Act, an integral part of the Infrastructure Investment and Jobs Act (IIJA), sets clear guidelines for government-sponsored projects. Its core tenets include:
- Manufactured in the USA: The item must be manufactured within the United States.
- 55% Domestic Components: A significant portion, 55% by cost, of the components used in the project must be sourced directly from the United States.
BABA applies across the board to all programs included in the Infrastructure Investment and Jobs Act, BEAD being no exception. The aim is to strengthen domestic manufacturing and stimulate economic growth.
Recent Developments: The BABA Waiver
In alignment with the Build America Buy America Act, the Department of Commerce (DOC) issued a proposed waiver on August 22, 2023, specifically related to the Buy America Domestic Content Procurement Preference. Key elements of this waiver include:
- Full Waiver for Broadband Electronics: The waiver fully exempts all broadband electronics from both criteria of the Buy America requirement, except for Optical Line Terminations (OLTs), OLT line cards, OLT optics modules, and Optical Network Terminals (ONTs).
- Waiver with Manufacturing Requirement: OLTs, OLT line cards, OLT optics modules, ONTs, and enclosures are waived from the 55% component sourcing requirement. However, they must still be manufactured in the United States and adhere to detailed manufacturing process definitions outlined in the proposed waiver.
- Sourcing and Manufacturing in the U.S.: Other low-cost non-electronics equipment is required to be sourced and manufactured in the U.S.
- Voluntary Self-Certification: The waiver establishes a process for manufacturers to voluntarily self-certify Buy America compliance with the National Telecommunications and Information Administration (NTIA) for products that must be manufactured in the U.S.
Download the waiver and learn more on the Build America Buy America page of the Department of Commerce. Interested parties had until September 21, 2023, to submit their comments on the proposed waiver. If granted, the waiver will be effective for BEAD Program awards for five years.
Broadband Equity Access and Deployment Program (BEAD)
The Broadband Equity Access and Deployment Program, with a staggering budget of $42.45 billion, is entrusted to the National Telecommunications and Information Administration (NTIA). BEAD's primary mission is to ensure that government-funded broadband infrastructure projects adhere to the stringent Build America Buy America Act guidelines.
- Funding Distribution: States will serve as conduits for BEAD funds, allocating them to subrecipients through grant programs. Eligible entities include states, tribes, local governments, providers, nonprofits, and others.
- Complex Allocation Process: BEAD's allocation to each state is contingent on the number of unserved locations within that state, as determined by the new FCC mapping fabric. The allocation details were disclosed on June 30, 2023.
- State Planning: States must adhere to a comprehensive planning process. This includes submitting a five-year Action Plan within 270 days of receiving funds and an Initial Proposal within six months of the Allocation Date. The latter goes through a public review and challenge process. Once approved, 20% of the allocated funding is released. Subsequently, states have a year to submit a Final Proposal, unlocking the remaining 80% of funds.
Nokia's Response to BABA Requirements
In response to the stringent Build America Buy America Act regulations, Nokia has taken significant steps towards compliance. The company is committed to onshoring the manufacturing of several fiber broadband products within the United States. These products have been carefully selected for their performance, cost-effectiveness, and flexibility, making them ideal choices for potential recipients of the BEAD program. The products that fall under this manufacturing plan include:
- Optical Line Termination (OLT) card for a modular Access Node
- A small form factor OLT
- OLT optical modules
- An "outdoor-hardened" Optical Network Terminal (ONT)
Nokia's proactive approach to manufacturing aligns seamlessly with the proposed BABA waiver, ensuring compliance and contributing to the growth of American infrastructure.
The Build America Buy America Act, along with its recent waiver, stands as a critical milestone in strengthening domestic manufacturing and promoting economic growth. As it intersects with the Broadband Equity Access and Deployment Program (BEAD), its implications are far-reaching, shaping the future of American broadband infrastructure. Nokia is embracing the spirit of these regulations and is working to play a pivotal role in building a more robust and connected nation.