WASHINGTON, August 22, 2023 – The U.S. Department of Commerce on Tuesday released the details of a limited waiver of the Buy America rules for the agency’s Broadband Equity, Access and Deployment program.
As part of the administration of President Joe Biden’s initiative to expand broadband deployment and stimulate domestic manufacturing, projects receiving federal funding must obtain at least 55 percent of their component by cost in the United States.
The proposed waiver preserves the 55 percent cost requirement for fiber optic cables, and delineated the rules for implementing the $42.5 billion BEAD program, outlining specific criteria for categorizing each component as “produced in the United States.”
The waiver removes the requirements for all electronics equipment used in fiber-optic technologies with the exception of four categories:
- Optical Line Terminals (OLTs) and Remote Optical Line Terminals
- OLT Line Cards
- Optic Pluggables
- Optical Network Terminals and Optical Network Unites
NTIA’s analysis of Buy America rules in the waiver
In the text of the proposed waiver, the NTIA says that electronic equipment used in fiber and fixed wireless networks “are almost uniformly manufactured in Southeast Asia.” The agency said that “semiconductors represent the majority of the value of the components that make up such products – often in excess of 70 percent.
“While the historic CHIPS and Science Act is expected to spur a 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,” the agency continued.
While there is not at the moment an economical feasible route for semiconductors, the agency said that “there are some classes and categories of electronics that are currently manufactured outside of the United States, but for which there is an economic case for onshoring final assembly.”
That latter possible led, NTIA said, to the rules requiring Buy America Compliance of the four categories of fiber electronic equipment.
The release of the proposed waiver kicks off a 30-day comment period that ends on September 21, 2023.
Nokia claims to be the first Buy America-compliant vendor
Manufacturer Nokia claimed Tuesday that its fiber-optic broadband network electronics and optical modules will meet the proposed Build America, Buy America guidelines issued Monday by NTIA.
Nokia said that will take action to be added to the NTIA’s official list of certified “Buy America” compliant vendors, and that it will manufacture its Buy America-compliant OLT line card, remote OLT, OLT optical module and ONT in the U.S. starting in 2024.
“We fully support the guidelines issued by the NTIA and Department of Commerce which provide a realistic and reasonable approach to manufacturing broadband technology in compliance with the Build America, Buy America mandates,” said Sandy Motley, president of fixed networks at Nokia in a press release.
“Working alongside the Department of Commerce, we will continue to take the necessary steps required and plan to become the first broadband technology vendor to be listed as Buy America compliant – eliminating the guesswork for any states or infrastructure builders participating in the BEAD program.”
The announcement comes on the heels of Nokia’s recent partnership with manufacturer Fabrinet to produce optical modules in the United States, making it the first telecom vendor to domestically manufacture these materials for deployment in the BEAD program.
Nokia’s initiative contributes to a broader trend where providers like CommScope, Corning, and others have detailed investments to revitalize electronics and fiber manufacturing in the United States.
