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With President Biden doubling down on the need for the private sector to purchase equipment domestically, rolling out broadband in the US could be more costly than anticipated
Back in 2021, President Joe Biden signed the Infrastructure Investment and Jobs Act (IIJA) into law, providing for $1.2 trillion in spending on infrastructure projects, from roads to rural broadband.
Within the IIJA, around $42.5 billion was set aside for the Broadband Equity, Access and Deployment (BEAD) programme, which seeks to subsidise planning, infrastructure deployment, and adoption programmes for high-speed broadband across the nation.
The BEAD programme, overseen by the National Telecommunications and Information Administration (NTIA), is currently taking industry applications for funding, with allocations expected to be made by June 30.
Naturally, this programme has been seen as a huge boon to the US fibre industry, with the funding potentially making it far more cost effective to deploy network infrastructure to underserved areas and thereby shrink the digital divide.
However, actually being allocated the funds may not be as smooth sailing as previously thought, with President Biden last week doubling down on his insistence that companies ‘Buy American’ when using federal funding.
“Buy American has been the law since 1933, but for too long past administrations, Democrat and Republican, have fought to get around it. Not anymore. Tonight, I’m announcing new standards to require all construction materials used in federal infrastructure projects to be made in America. Lumber, glass, drywall, fibre optic cable,” said President Biden in his State of the Union address on Thursday.
The speech was followed by the release of a new update to the Build America, Buy America Act provisions within the IIJA, tightening restrictions on which products can be purchased with government funding.
The IIJA currently requires at least 55% of the products purchased using government subsidies to be made domestically – a measure that has proven somewhat painful for fibre optic companies, who claim they can purchase the products from foreign firms at a cheaper rate. As such, many of these companies have been applying for exemptions to these ‘Buy American’ requirements.
The NTIA has already demonstrated a willingness to acquiesce to similar requests for other programmes, with waivers already in place for the Tribal Broadband Connectivity Program and the Connecting Minority Communities Pilot Program. They are also considering allowing waivers for the $1 billion Enabling Middle Mile Broadband Infrastructure Program.
Now, however, following President Biden’s speech, the NTIA has reaffirmed their commitment to enforce the ‘Buy American’ stipulations for BEAD, arguing that the US fibre industry has the time necessary to scale their operations to meet the programme’s needs.
“NTIA has done considerable research and does not currently see any need for waivers for fibre optic glass or cable. Our expectation is that industry will be able to produce enough quantity [of fibre] to satisfy the demand from the Broadband Equity, Access, and Deployment (BEAD) Program over the coming years,” said the NTIA in a statement.
“The BEAD Program has different requirements, and manufacturers have time to re-shore or expand their operations. Moving forward, NTIA will work with these businesses to ensure that they can produce the relevant products for the BEAD program domestically,” it added.
At a time when the global economy is already strained and supply chain crises are rife, the NTIA’s insistence that US companies buy fibre and equipment domestically will surely be a blow to the nation’s fixed line operators.
How will the US government’s insistence that the private sector ‘Buy American’ impact the provision of telecoms services? Join the operators in discussion at this year’s live Connected America conference
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