NTIA Stands Firm on Buy America Rules, Says BEAD Projects Must Be American : Broadband Breakfast

The NTIA's comments came after President Biden said fiber optics should be made in America.

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WASHINGTON, February 9, 2023 – In a firm statement on Thursday, the National Telecommunications and Information Administration said it will stand behind the country's domestic production preference laws when it comes to the manufacturing of fiber optic glass or cable products using federal funds.

It also said it believes broadband projects funded from its $42.5 billion Broadband Equity, Access and Deployment program "have time" to get "made in America" products, potentially closing the door on waivers for products some in the industry have said could increase the cost or make the timely completion of projects difficult for that program. The NTIA will allocate the BEAD money to the states by June 30.

The Infrastructure, Investment and Jobs Act includes a "Build America, Buy America" provision that requires at least 55 percent of the cost of products funded by the federal government for projects be made in the country. But the legislation includes an exemption opportunity from the domestic preference rule in certain cases.

"NTIA has done considerable research and does not currently see any need for waivers for fiber optic glass or cable," the Commerce Department agency said in its Thursday statement.

The comments were in direct response to President Joe Biden's State of the Union Address on Tuesday night, in which he announced "new standards" requiring "all construction materials used in federal infrastructure projects to be made in America," with a specific mention of fiber optic cables.

"Our expectation is that industry will be able to produce enough quantity [of fiber] to satisfy the demand from the Broadband Equity, Access, and Deployment (BEAD) Program over the coming years," the NTIA statement said, adding it will not be an agency that will "skirt" the BABA requirements.

The Commerce Department agency added it "believes that if it can be Made in America, it should be made in America – and it's why we’ll strictly enforce ‘Build America, Buy America’ (BABA) requirements outlined in the Bipartisan Infrastructure Law and the Internet for All Notices of Funding Opportunity (NOFOs)," it added.

Broadband Breakfast reported that the Fiber Broadband Association sent a letter to Sen. John Thune, R-SD, about the need for BABA waivers on products that exclude optical fiber and fiber cable but that include other optical connectivity products, fiber optic adapters and connectors, and fiber cable assemblies and enclosures. If those have to be made in America, the industry association says costs would increase significantly.

Wednesday's Broadband Breakfast Live Online event included a discussion on BABA.

The NTIA also said that it believes bidders for the $42.5 billion BEAD money will be able to satisfy their domestic production requirements, despite some in the industry requesting some form of BABA waiver because some of the products they need for build are produced overseas.

"The BEAD Program has different requirements, and manufacturers have time to re-shore or expand their operations," the NTIA statement said. "Moving forward, NTIA will work with these businesses to ensure that they can produce the relevant products for the BEAD program domestically.

"We are carefully monitoring administration-wide initiatives like the new proposed Made in America policies from the Office of Management and Budget (OMB) to ensure that we meet our obligations," the statement added.

The NTIA is currently considering a BABA waiver opportunity for its $1 billion Enabling Middle Mile Broadband Infrastructure Program, which includes certain project components. It also has an existing waiver in place for its Tribal Broadband Connectivity Program and the Connecting Minority Communities Pilot Program.

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Managing Editor Ahmad Hathout has spent the last half-decade reporting on the Canadian telecommunications and media industries for leading publications. He started the scoop-driven news site downup.io to make Canadian telecom news more accessible and digestible. Follow him on Twitter @ackmet.

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The program instructs applicants on best practices to write winning grant applications.

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WASHINGTON, June 1, 2023 – Advocacy group National League of Cities is sponsoring a nationwide program designed to advise cities and towns on how to access federal infrastructure funding.

The Local Infrastructure Hub program is hosting a grant application bootcamp aimed at assisting small- and mid-sized cities and towns in their grant applications. The bootcamp series will begin in June and will focus on the programs funded through the $65 billion Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

The camp comes ahead of the National Telecommunications and Information Administration's allocation by June 30 of the $42.5 billion from its Broadband Equity, Access and Deployment program.

The broadband opportunities bootcamp will introduce cities to the entire ecosystem of federal broadband opportunities and educate them on ways they can engage with the private sector, the NLC said. It will guide them through the process of applying to the Broadband Equity Access and Deployment program, it added.

Participants will be guided through the process of creating an asset map for their community, executing a community engagement strategy, utilizing data to understand problems, aligning applications with broader federal priorities, and writing winning applications through provided templates.

Mayors and municipal staff across a wide range of specialties are eligible to participate. Participants will have access to subject-matter experts and individualized coaching sessions. The program will connect applicants with their peers applying to the same programs, the NLC said.

The free bootcamps will last 3 to 4 months and will require several hours of participation each week per team member. Many city leaders tout the program as being highly successful and influential in their grant application process.

The NTIA has acknowledged a clear preference for fiber in its bipartisan infrastructure deployment effort.

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WASHINGTON, May 31, 2023 – Brendan Carr, commissioner of the Federal Communications Commission, voiced reservations last week about the fiber preference in the National Telecommunications and Information Administration's flagship broadband funding program, citing potential time and financial constraints.

The NTIA's Broadband Equity, Access, and Deployment program, an offspring of the Infrastructure, Investment and Jobs Act, is expected to deliver $42.5 billion to the states by June 30 for infrastructure that needs to be built within a handful of years. Funding priorities under BEAD will be given to "projects designed to provide fiber connectivity directly to the end user," according to an NTIA document.

"I do think some of the BEAD policies put a bit too much of a thumb on the scale for fiber," Carr said in an interview with John Foley, managing director of Safer Building Coalitions, at the Wireless Tech and Policy Summit in Washington.

"In the case of fiber, where it could take potentially years to get fiber built out, not to mention significant delta in funding," said Carr. "It can take anywhere from $40,000 to $60,000 to run a mile of fiber."

He said fixed wireless access can sometimes provide "robust high-speed service" while still remaining within budget.

Despite the NTIA's clear acknowledgement of a fiber preference in its infrastructure deployment effort, Carr has long advocated for the use of fiber alternatives in rural regions, where high-speed internet is still a luxury in some parts. In 2022, Carr criticized the FCC for rejecting full grants to satellite broadband service provider Starlink and fixed wireless service provider LTD Broadband from the Rural Digital Opportunity Fund.

"We should be making it easier for unserved communities to get service, not rejecting a proven satellite technology that is delivering robust, high-speed service today," read the statement. "To be clear, this is a decision that tells families in states across the country that they should just keep waiting on the wrong side of the digital divide even though we have the technology to improve their lives now."

Among the summit's panelists, former FCC Commissioner Jonathan Adelstein also raised skepticism that the program's intended beneficiaries, those living in rural regions, would see any tangible benefits from a fiber priority strategy.

"Policy makers, I don't think, are always thinking about how actually consumers are living on the ground," he said. "The thing that isn't so obvious sometimes is the affordability factor that not everybody can afford to have a fiber connection and a broadband connection over their handset."

This isn't the first time telecom experts raised concern about BEAD's fiber-focused expansion. The Wireless Internet Service Providers Association released a report in February calling fiber-prioritized financing "a bad policy" due to its potential to raise implementation costs and slow down the rollout timeline.

Reverse auctions would stretch funding further.

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WASHINGTON, May 24, 2023 – States should use a reverse auction process to divvy out money from the National Telecommunications and Information Administration's Broadband Equity, Access and Deployment program, said experts at an American Enterprise Institute event Wednesday.

States are given two methods to stretch their funding amounts further, said Scott Wallsten, president of Technology Policy Institute. The first is to decide how they will distribute the money and the second is to determine where to set the extremely high-cost threshold, which will indicate where money can be spent for technology other than fiber.

Reverse auctions where providers bid on the lowest amount of grant funding needed to fund a program are the solution to efficiently distribute limited funds, which are expected to be delivered to the states by June 30, said Wallsten.

The Federal Communications Commission's Rural Digital Opportunity Fund reverse auctions showed that winning bids were nearly half of what cost models estimated, which shows just how much dollars can stretch if done correctly, said Wallsten.

Not all industry experts agree, however. CEO of DTC Communications Chris Townson said in a panel this month that reverse auctions simply create a race to the bottom without considering quality. "Let's put our money to the things that really matter," he said.

We often underestimate the ability of firms to build out, said Greg Rosston of Stanford Institute for Economic Policy Research Wednesday. Firms will respond to lower bids by finding innovative ways to work more efficiently, he said. Companies have accurate information about program costs and understand the risks, he continued.

Photo of Greg Rosston during the webinar

"We should take advantage of this by harnessing the power of the markets," he said, urging states to use reverse auctions to stretch the money further.

Furthermore, the NTIA should set a framework for what states can do to meet the competitive grant requirement, said Rosston.

The law specifies that states must have a competitive grant process without explaining what that means, he said. As it stands currently, it is unclear how states will decide how to allocate the money awarded to them in the BEAD program, Rosston continued. There is a lot of opportunity for wasteful spending, he said.

We do not want 50 states and territories struggling to organize their own competitive grant processes, added Wallsten.

There is nothing preventing the NTIA from asking the FCC to help the states with reverse auction processes by making the software and rules from RDOF auctions available or even running the auctions for the states, said Rosston. We need to make it easy to have states run their competitive processes as required in the law, he stated.

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