America-Made Fiber Directive Not Seen as Big BEAD Stumbling Block
The White House's directive that all construction materials used in federal infrastructure projects, including fiber cable, be American made shouldn't cause big delays in or cost run-ups for fiber for broadband equity, access and deployment (BEAD) projects, we were told. It's less clear whether the directive could cause challenges in obtaining the electronics -- typically made overseas -- used to light the fiber.
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“Everybody supports the made-in-America theme; we all want that to be the end result,” said John Windhausen, Schools, Health & Libraries Broadband (SHLB) Coalition executive director. But reshoring the capacity to make the electronics needed to light the fiber could take three to four years, he said.
Commerce has issued numerous waivers on a case-by-case basis of the Infrastructure Investment and Jobs Act (IIJA) Build America, Buy America requirements for broadband network equipment and consumer devices, Windhausen said. But that still leaves a lot of uncertainty about whether any given individual waiver would be granted, he added, noting SHLB's blanket waiver request submitted last year to Commerce. He said NTIA Administrator Alan Davidson "recognizes the dilemma and is struggling with that." He said future NTIA guidance about BEAD would be an opportunity for it to further clarify the issue.
Comments are due March 13 on OMB-proposed new standards to determine if construction materials for federally funded infrastructure projects are made in the U.S. OMB proposed that "final fiber optic cable and optical fibers" be treated as construction materials under IIJA Build America, Buy America Act provisions.
There needs to be explicit guidance on Buy America requirements and potential waivers, emailed Kathryn de Wit, Pew Charitable Trusts project director-broadband access initiative. "Similarly, it’s incumbent on states and their ISP partners to elevate how these requirements could impede progress toward universally available, affordable, high-speed connections," she said.
Some think the American-made policy mandate will drive BEAD project delays and costs. "It's an admirable goal," but BEAD is already "notorious" for requirements that have nothing to do with closing the digital divide, said Joe Kane, Information Technology and Innovation broadband and spectrum policy director. Though BEAD has enough money to close the digital divide, American-made requirements could create a shortfall, he said. The White House is focused on creating American jobs, but broadband isn't an area where there's an established U.S. manufacturing base and fallow manufacturing capacity, he said. American-made requirements plus existing supply chain challenges are "going to be especially damaging," he said. In a study last year, ITIF estimated Buy American provisions for IT components would raise federal infrastructure costs about 25%.
NTIA confirmed this month in a blog post that manufacturers and ISPs must follow the made-in-America requirement for the BEAD program. "The president made clear that while Buy America has been the law of the land since 1933, too many administrations have found ways to skirt its requirements," the agency said, echoing language in President Joe Biden's State of the Union address earlier in the week: "We will not."
NTIA said it plans to "strictly enforce" the buy America requirements in its notices of funding opportunity. The agency noted it has "done considerable research and does not currently see any need for waivers for fiber optic glass or cable," saying manufacturers "have time to re-shore or expand their operations" and it will work with companies to ensure they comply.
Some questions remain about whether the requirement will cause delays to deployment projects. Fiber orders "often take over a year and as long as 72 weeks to fulfill for smaller providers" currently, said NTCA Executive Vice President Mike Romano. There "remains substantial question as to whether sufficient quantities of fiber are available now and will be available to meet anticipated demand from BEAD and other programs in the future," Romano said. NTCA "appreciates the serious efforts that fiber manufacturers and distributors are making to ramp [up] production" and "we all hope that these efforts will ultimately meet the expectations articulated by NTIA," he said: "If not, however, we hope that the predictive conclusions currently reached with respect to availability can and will be revisited."
BEAD "is a bipartisan step forward that will bring connectivity to more Americans while adding American jobs," John McGirr, Corning Optical Fiber and Cable senior vice president-general manager, said in a statement. He said Corning "is strategically investing in fiber and cable capacity, based on strong customer commitments" and cited the company's 2022 Arizona cable plant announcement (see 2208300010). "We expect this capacity to be in place in 2024, in time to support network buildouts funded through BEAD," he said, noting a cable manufacturing expansion announced in 2021 in North Carolina is also ramping into production. The company also opened a fiber manufacturing facility in Poland in September to meet demand in the EU and surrounding regions, which in turn "provides us additional flexibility to use our U.S. fiber capacity for the U.S. market," he said.
Corning's fiber and cable manufacturing investments since 2020 total more than $500 million, McGirr said. Those investments, backed by customer commitments, "nearly double Corning's ability to serve the U.S. cable market and connect more people and communities," he said.