The National Telecommunications and Information Administration (NTIA) beat its June 30 deadline to announce the amounts it will award each state through its $42.5 billion Broadband Equity, Access and Deployment (BEAD) program, but now the clock is ticking as states and broadband service providers await another milestone. The NTIA has yet to clarify how state broadband deployments can comply with the Build America Buy America Act (BABA).
Like BEAD, BABA is part of the 2021 Infrastructure Investment and Jobs Act. It establishes a domestic content procurement preference for all federal financial assistance obligated for infrastructure projects after May 14, 2022, according to the U.S. Commerce Department. Products typically count as “made in America” if they are manufactured in the U.S. and 55% of their components (by cost) are mined, produced or manufactured in the U.S.
The devil will be in the details for broadband service providers, as the NTIA is expected to provide some BABA waivers related to the BEAD funding. During a panel discussion at the Wireless Infrastructure Association Connect (X) show in May, NTIA policy advisor William Arbuckle told Fierce Telecom editor-in-chief Linda Hardesty he hoped proposed waivers would be available “this summer, at the same time that states are finding out how much money they get.”
Now, NTIA tells Fierce it will wait until later this summer to provide more guidance on the BABA requirements for BEAD. As Arbuckle explained at Connect (X), the agency must balance support for domestic manufacturing with the mandate to connect all Americans to broadband.
“We know there’s a tradeoff here,” Arbuckle said. ”If we require that certain things be made in the U.S., it’s more likely they’ll be more expensive.” Arbuckle explained NTIA wants to “have some security in the domestic supply chain and create jobs” but does not want to “blow prices out of the water.” He said the agency is well aware that made-in-America requirements “don’t make sense” for all components of a broadband network.
Other speakers at the Connect (X) conference echoed this sentiment. During a supply chain panel, April Jackson, vendor management director at Tessco, noted active components of broadband networks are often made overseas and said some of Tessco’s suppliers are considering options to replace or supplement East Asian manufacturing with U.S. or Mexican factories. Fellow panelist Doug Wittrock, EVP at Network Connex, said the U.S. cannot support the BEAD builds domestically. “We don’t have the resources, materials, personnel or manufacturing capacity to fill the need,” summarized Wittrock.
Barbara Baffer, VP government and political advocacy at Ericsson, brought up BABA during a Connect (X) panel entitled The View from Washington. “The agenda is right, but the actual provisions make it very, very difficult,” she said. Baffer explained that although Ericsson is manufacturing baseband units, mmWave radios, and FWA equipment at its Texas facility, these products currently would not qualify for BEAD deployments due to BABA.
“Eighty-two percent of chips are made outside the U.S.,” Baffer said. “The radios have maybe 17,000 or 18,000 chips on them. That’s a lot of content that’s made outside the U.S. It doesn’t qualify under the BABA program. There’s also a lot of other hardware that comes into play: routers, optical, cables, components, etc. that go into our equipment. They don’t qualify either.” Baffer noted companies across the telecom industry face a similar challenge when it comes to selling into BEAD-funded deployments.
Clearly, NTIA has a lot to consider as it drafts rules for how BEAD and BABA can work together. The agency is likely to ask for public comment on its first draft of the rules.
Earlier this year, NTIA released a waiver for entities bidding to participate in its middle-mile grant program. At Connect (X), Arbuckle said NTIA “waived all products other than fiber optic cable” for the middle-mile build, but added this action should not be viewed as a precedent for the BEAD waivers.