WISPA Says BEAD Fiber Prioritization to Increase Cost and Deployment

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WASHINGTON, February 8, 2023 – President Joe Biden underlined the importance of ”made in America” rules to the re-vitalization of the country’s physical and internet infrastructure in his State of the Union address on Tuesday.

Bringing high-tech industry and more modern infrastructure to America emerged as an early theme of the president’s annual address to Congress. Biden highlighted historic federal government investments in broadband and other infrastructure, and the CHIPS and Science Act, major bipartisan legislation passed last year that subsidized American-made semiconductors.

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The 73-minute address, Biden’s longest, covered many topics and even included some moments of partisan back-and-forth with Republicans in the chamber, who took control of the House of Representatives last month.

The emphasis on “made in America,” domestic revitalization, and competition with China redounded throughout the speech.

“America used to make nearly 40% of the world’s chips,” Biden explained early in the address, part of a Constitutional requirement for the president to report to Congress annually.

“But in the last few decades, we lost our edge and we’re down to producing only 10%. We all saw what happened during the pandemic when chip factories overseas shut down.”

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Biden linked the shutdown of foreign factories to inflation and other woes: Because today’s cars require up to 3,000 chips a piece, “American automakers couldn’t make enough cars because there weren’t enough chips.”

“We can never let that happen again,” Biden said. “We’re making sure the supply chain for America begins in America.”

Better broadband for America, and solving supply chain woes

As in last year’s address, in which he touted anticipated U.S.-based investment by American manufacturer Intel, Biden said Tuesday, “outside of Columbus, Ohio, Intel is building semiconductor factories on a thousand acres – a literal field of dreams.”

He used these remarks about chip-production to pivot to broadband and other infrastructure.

Noting America’s decline from number 1 in the world to 13th in the world on infrastructure, Biden said that “we’re coming back because we came together to pass the Bipartisan Infrastructure Law, the largest investment in infrastructure since President Eisenhower’s Interstate Highway System.”

With the $1.7 trillion funding bill, the Infrastructure Investment and Jobs Act, passed in November 2021, Biden said that the nation “will put hundreds of thousands of people to work rebuilding our highways, bridges, railroads, tunnels, ports and airports, clean water, and high-speed internet across America,” including people living in urban, suburban, rural and tribal areas.

Linking American infrastructure, including on broadband, to ‘Buy American’ rules

Biden added more details to the quest to “mak[e] sure that every community has access to affordable, high-speed internet. No parent should have to drive to a McDonald’s parking lot so their kid can do their homework online.”

In the very next line, he added: “And when we do these projects, we’re going to Buy American.

“Buy American has been the law of the land since 1933. But for too long, past administrations have found ways to get around it. Not anymore.

“Tonight, I’m also announcing new standards to require all construction materials used in federal infrastructure projects to be made in America. American-made lumber, glass, drywall, fiber optic cables.”

Some observers speculated that the administration might permit a waiver of “Buy American” rules for the broadband provisions of IIJA, as the Obama administration did under the American Recovery and Reinvestment Act of 2009.

In September, that agency proposed what it described as a “limited applicability nonavailability waiver of the Buy America domestic content procurement preference as applied to recipients of middle mle grant program awards.”

The National Telecommunications and Information Administration of the Commerce Department put that waiver forward in the lead up to the September 30 deadline for $1 billion middle mile program funding.

The agency had been fielding complaints about the provision, stemming from concern that projects will be stalled or incomplete without adequate access to foreign supply.

Many had wondered whether the NTIA would take a similar stance over the much larger, $42.5 billion Broadband, Equity Access and Deployment program.

But Biden’s forceful denunciation of efforts to undercut the law might – particularly in a reference to “fiber optic infrastructure” – make it hard for the administration to do so.