NTIA's BABA waiver for BEAD gets industry approval

The NTIA on Friday published its final waiver on "Build America, Buy America" rules for the $42.5 billion Broadband Equity Access and Deployment (BEAD) program, officially clarifying which products associated with BEAD builds must be domestically manufactured. The waiver received initial support from industry groups and confirmation from some suppliers that their products align with requirements.

The final waiver follows NTIA's publication of a proposed waiver last August, after which it received 66 comments from ISPs, manufacturers, trade associations and unions, according to the Department of Commerce (DOC), requesting various clarifications and adjustments.

In a blog post, Will Arbuckle, senior policy advisor at the NTIA, wrote that the waiver "takes the strongest approach possible to protecting American jobs while also ensuring that we can quickly build the Internet networks."

Arbuckle confirmed that the waiver still requires roughly 90% of BEAD products to be domestically manufactured: "When we released the proposed BABA waiver in August, we estimated that our approach would mean close to 90% 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," he said.

Related:'Buy America' restrictions could bog down BEAD

"At first, many in the 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. 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.

One of those manufacturers, Nokia, quickly confirmed that its products comply with BEAD's BABA rules and said its "full suite of Buy America-compliant products" will be available by mid-2024. The company announced plans last year to manufacture broadband network electronics products for BEAD at Sanmina Corporation's Kenosha County, Wisconsin facility.

"We are proud to be Buy America compliant and to support the U.S. government's efforts to bring broadband to every American," said Sandy Motley, USA Country Manager at Nokia, in a press release following the final waiver's publication on Friday.

The Nokia release also included a statement from Frontier, a service provider customer.

"We are proud to use Nokia's Buy America compliant technology to help us deliver high-speed, fiber broadband to the people and communities that need it most," said Veronica Bloodworth, Frontier's chief network officer.

Related:Vecima ratchets up US manufacturing in support of BEAD

Adtran, which announced plans last year to manufacture products for BEAD in Huntsville, Alabama, released a statement confirming its compliance.

"We welcome the clarity of the final BABA ruling, enabling us to align our solutions with federal requirements and ensure our readiness to support the BEAD program in closing America's digital divide," said Robert Conger, GM of software platforms and strategy at Adtran, in a press release. "As we continue to align our efforts with the program's objectives, we're looking forward to the National Telecommunication and Information Administration (NTIA) providing the certification process and website details. This step is crucial for operators to design their BEAD networks with confidence, ensuring they can leverage our BABA-compliant solutions and accelerate the deployment of high-speed broadband infrastructure across the nation."

Other suppliers that have announced plans to domestically manufacture products for the BEAD program include Calix, Ciena, OFS and Vecima.

The specifics

The final BABA waiver confirms that it will apply for the duration of the BEAD build.

"For those BEAD awards obligated on or after the effective date of this waiver, February 22, 2024, through February 22, 2029 (i.e., five years from the effective date), the waiver will apply to funds expended by award recipients and subrecipients during the entire period of performance of the award," states the waiver.

Related:The Divide: TIA CEO David Stehlin on how to succeed with BEAD

The DOC issued a limited waiver for non-optic-glass inputs on fiber and construction materials but declined to grant additional waivers for optical fiber and fiber optic cable.

Referring to that decision, the DOC said it "considers connectors to be minor additions to fiber optic cable that occur after the construction material has been produced in the United States. Connectors do not, therefore, need to be manufactured in nor attached to fiber optic cable in the United States."

The department maintained BABA rules for optical line terminals and remote optical line terminals (OLTs/rOLT line cards); optic pluggables; and optical network terminals and optical network units (ONTs/ONUs), but it waived the 55% cost of components requirement and provided further guidance on required manufacturing processes for these materials to be considered compliant.

On enclosures, the Commerce Department declined to waive the 55% cost of components requirement and outlined guidance for such products to comply.

The department also waived BABA requirements for most passive optical equipment, in addition to semiconductors, routers and switches.

The full waiver and FAQ page can be found here.

Industry reaction

The BABA rules and their impact on BEAD have been a concern for industry groups for the last couple of years, but today's final waiver appeared well-received by those same parties.

"NTIA's approach on Build America Buy America is a smart move, balancing the need for providers to purchase the network components required for BEAD deployments on time while American manufacturing ramps up. We must keep moving forward with both goals—achieving universal connectivity and accelerating American manufacturing—on parallel tracks," said Jonathan Spalter, CEO of USTelecom, in a statement.

The waiver also drew approvals from the Telecom Industry Association (TIA) and the Fiber Broadband Association (FBA).

"TIA appreciates the work the Department of Commerce undertook to develop a limited waiver of Buy America requirements for the Broadband Equity Access and Deployment (BEAD) program," said TIA CEO Dave Stehlin. "Our members have already begun to make substantial investments in U.S. manufacturing to support the BEAD program. The release of this final limited waiver provides clarity to companies investing in U.S. manufacturing and it ensures that we are one step closer to our goal of deploying broadband to all Americans."

Added FBA's CEO Gary Bolton: "The Fiber Broadband Association applauds the National Telecommunications and Information Administration for its seriousness and diligence in adopting the just released Build America Buy America waiver for the BEAD Program," noting that the waiver "will enhance domestic production of the products needed for that infrastructure allowing funding recipients to continue to provide economic opportunity, including job creation, through innovation and timely deployment of broadband infrastructure."