The U.S. Department of Agriculture (USDA) Rural Development division sought to delay the implementation of a “Buy American” provision included in the recently passed Infrastructure Investment and Jobs Act (IIJA) on the grounds that the requirement could hinder critical projects including broadband rollouts. Its move is notable given the USDA administers a number of key broadband funding initiatives, including the well-known ReConnect Program.
Passed in November 2021, the IIJA included a Buy American rule which requires projects receiving federal infrastructure funding to use products and materials which contain at least 55% domestic content. That requirement was set to be applied to money obligated for projects after May 14, 2022.
In a waiver request, though, the USDA asked that the rule’s implementation be delayed by six months. Among other things, the agency said the reprieve will give it more time to ensure program participants know how to meet the Buy American requirements so they can continue partaking in its programs. It will also help “avoid unintended negative impacts of immediate implementation,” which might include delayed rollouts of critical broadband, water and community infrastructure in rural areas.
Changing program requirements “mid-cycle would cause confusion and garner distrust that undermines Administration goals,” it argued. “Without an adjustment period there will be significant harm to RD program delivery, relationships with rural constituents, and deployment of critical infrastructure and service in rural areas.”
Late last year, the USDA opened up a third funding round for its Reconnect Program, announcing plans to award up to $1.15 billion in loans and grants for broadband projects. The window for applications closed in March 2022. While the agency has yet to announce awardees, it noted in the waiver request “Tribal entities are critical participants for the ongoing ReConnect Round 3 awards for broadband and delays will have a negative impact on the Tribal entities.”
Public comments on the USDA’s waiver request will be open through July 18.
It’s worth noting the agency isn’t the only entity worried about the impact of the IIJA’s Buy American requirement on broadband builds. In January, several broadband groups including USTelecom, NCTA – The Internet and Television Association, NTCA – The Rural Broadband Association, TIA, CTIA and CCA sent a letter to the Department of Commerce (DOC) seeking a limited waiver of the rule for broadband projects. Several other industry players – including the likes of Cisco, Intel, the U.S. Chamber of Commerce and INCOMPAS – have chimed in with the same request.
The requests are notable because the DOC’s National Telecommunications and Information Administration (NTIA) is set to distribute more than $45 billion of the $65 billion recently allocated by Congress for broadband. NTIA chief Alan Davidson said recently it plans to follow the Buy American requirement, though it fully expects there to be some waivers.