The wait is over. Final Build America, Buy America waivers for the Broadband, Equity Access, and Deployment (BEAD) program have been unveiled.
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.
The National Telecommunications and Information Administration (NTIA), which oversees BEAD, first proposed waivers to the Build America requirements in August after industry organizations and analysts, among others, expressed concerns that the rules would hamper U.S. fiber deployments.
During a subsequent comment period, the Proposed BABA Waiver received support from industry stakeholders but also requests for clarifications or modifications.
Finally, this week the NTIA responded to that feedback and finalized its Buy America rules for BEAD, including:
- A limited waiver for non-optic-glass inputs (eg. an overclad cylinder). The NTIA declined to grant additional waivers relating to optical fiber and fiber optic cable.
- A waiver for semiconductors. Crucial for broadband networks, semiconductors are predominantly manufactured outside the U.S. Although the CHIPS and Science Act aims to boost domestic semiconductor manufacturing, the NTIA said its impact won't be immediate enough for the BEAD program.
- The NTIA declined to waive Buy America requirements for OLTs/rOLTs, OLT line cards, optic pluggables and ONTs/ONUs. For those four categories, the NTIA proposed to waive the 55% cost of components requirement and in its place, outlined specific guidance for their manufacturing that must occur domestically for those electronics to be considered "produced in the United States."
- 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.
- Enclosures including cabinets, closures and terminals are mostly manufactured and assembled outside of the U.S. However, the NTIA found that many closures and terminals manufactured outside the U.S. incorporate a significant percentage of domestic components and manufacturers have the “incentive and ability to invest in domestic production.” Thus, it declined to waive the 55% cost of components requirement for enclosures and set forth specific manufacturing processes that must occur domestically for these products to be considered "produced in the U.S."
- Passive optical equipment like splitters, multiplexers, directional couplers, connectors and wave division multiplexers is "almost exclusively manufactured overseas and will generally make up a small percent of overall network spend, meaning there is little economic incentive for manufacturers to invest in domestic production." The NTIA therefore will waive Buy America requirements for most passive optical equipment.
The NTIA released its full list of waivers this week, along with an FAQ page specific to the BEAD program.
When the proposed BABA waiver was first released, the administration estimated that its approach would mean close to 90% of BEAD funds spent on equipment would be spent in the U.S. Under the waiver released today, “that estimate holds steady,” NTIA Senior Policy Advisor Will Arbuckle said in a blog.
Skeptics proved wrong?
Many in the industry were initially skeptical that Buy America for the BEAD Program couldn’t be done, Arbuckle noted, and that a blanket waiver would be necessary. “We worked closely with stakeholders to develop this guidance and we’re pleased to see that manufacturers have stepped up and proved this narrative wrong,” he wrote.
Jonathan Spalter, CEO of USTelecom called NTIA’s approach on Build America Buy America “a smart move, balancing the need for providers to purchase the network components required for BEAD deployments on time while American manufacturing ramps up. We must keep moving forward with both goals — achieving universal connectivity and accelerating American manufacturing — on parallel tracks."
Since Build America was announced, a number of companies have announced efforts to onshore and expand domestic manufacturing.
For example, Nokia last year announced it would team with longtime manufacturing partner Sanmina to bring production of fiber network electronics to the U.S. state of Wisconsin. On the heels of NTIA releasing its final waivers, Nokia made its own announcement that its fiber optic electronics and optical modules manufactured in the U.S. meet the final Buy America guidelines.
Vecima Networks also recently announced its own partnership with MARA Technologies USA to bring manufacturing for some of its Entra Fiber Access products to the U.S. Both CommScope and Corning have announced expanded manufacturing plans, as well.
Dell’Oro analyst Jeff Heynen told Fierce that BABA requirements are already starting to impact the market for PON equipment, even though most of BEAD’s money hasn’t actually materialized yet.