Biden Admin Waives Some ‘Buy America’ Requirements for $42 Billion Broadband Internet Project

This development follows a year or so of engagement with stakeholders, including U.S. manufacturers and internet providers, who could be impacted by the waiver.

President Joe Biden announces a national grant program for high-speed internet infrastructure deployment, at the White House in Washington, on June 26, 2023. Jonathan Ernst/Reuters

The Biden administration has announced that it’s waiving some made-in-America requirements for components used in its $42 billion broadband internet buildout project because not enough of the materials, such as fiber optic cable components, are produced in the United States.

Under the Build America Buy America Act (BABA), which was enacted as part of the Infrastructure Investment and Jobs Act, any federally-funded infrastructure projects are subject to domestic procurement requirements.

Specifically, all of the iron, steel, manufactured products, and construction materials used in infrastructure products must be made in the United States, per BABA rules.

However, the made-in-America legislation allows for heads of federal agencies to apply for BABA waivers under certain conditions, such as when using domestically made products would increase the project cost by 25 percent or if doing so would be “inconsistent with the public interest.”

Another possible condition for a waiver is if the materials and products that are subject to domestic procurement preference aren’t produced in the United States in sufficient quantity or at acceptable quality standards.

Last summer, the National Telecommunications and Information Administration (NTIA) applied for a BABA waiver—and on Feb. 22, received a green light for it—in order to meet the needs of the Biden administration’s broadband internet buildout program.

“When we released the proposed BABA waiver in August, we estimated that our approach would mean close to 90 percent of BEAD funds spent on equipment would be spent on equipment manufactured in the U.S. Under the waiver released today, that estimate holds steady,” Will Arbuckle, a senior policy adviser at NTIA, said in a news release.

The release of the waiver follows a year or so of engagement with stakeholders who could be impacted by the waiver, including U.S. manufacturers, internet providers, as well as trade associations and unions. It also follows a 30-day public comment period.

At an estimated cost to taxpayers of over $42 billion, the Broadband Equity, Access, and Deployment (BEAD) Program seeks to expand high-speed internet access across the United States.

“At first, many in industry told us that requiring the Buy America domestic manufacturing preference for the BEAD Program couldn’t be done—and that a blanket waiver would be necessary,” Mr. Arbuckle said in a statement.

“We worked closely with stakeholders to develop this guidance and we’re pleased to see that manufacturers have stepped up and proved this narrative wrong,” he added.

‘Stakes Are High’

In a notice of final waiver, the Department of Commerce (DOC) said it had determined that a BABA waiver was appropriate for the broadband project because “certain manufactured products and construction materials are not produced in the United States in sufficient and reasonably available quantities” to meet the needs of the

The waiver, which is time-limited through Feb. 22, 2029, targets specified items and is conditional on the requirement that certain manufacturing processes take place in the United States.

“We’re doing this because the stakes are high,” Mr. Arbuckle said in the press release. “At more than $42 billion, it is the single-largest investment to expand high-speed Internet access in American history.”

While some commenters called for a waiver for the entire optical fiber production process and a blanket waiver for non-U.S. country-of-origin fiber, DOC decided to limit the waiver to non-optic glass inputs to optical fiber.

The agency also waived the “Buy America” preference for all electronics in the BEAD program, with the exception of four categories: optical line terminals (OLT), optic pluggables, OLT line cards, and standalone optical network terminals and optical network units.

Passive optical equipment, a category made up of devices that split, combine, or facilitate the transmission of optical signals in systems that don’t require the use of power, is also subject to the waiver.

Most of the fiber broadband equipment, including optical fiber and key electronics, will still be made in the United States under the terms of the waiver.

Also, none of the fiber optic cable and optical transmission equipment covered by the waiver will be made in China, which the BABA rules expressly forbid, with limited exceptions.

DOC will review the waiver annually to check if it’s still needed, with Mr. Arbuckle saying that the waiver takes the “strongest approach possible” to protecting U.S. jobs while also making sure that materials are available to build out the internet networks quickly.

The main focus of the BEAD program is to deploy broadband service to unserved or underserved locations. Unserved locations are those without any broadband service at all or with broadband service offering download speeds below 25 megabits per second (Mbps). Underserved locations are those that offer download speeds of between 25-100 Mbps.