Biden’s ‘Buy American’ policy could put broadband deployments at risk

In his most recent State of the Union address, President Joe Biden highlighted the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) Program for connecting unserved and underserved locations to broadband. However, in the same address, President Biden went on to declare that “when we do these projects, we’re going to buy American...I’m also announcing new standards to require all construction materials used in federal infrastructure projects to be made in America.” The problem is that the country can close the rural digital divide in the next few years, or it can enforce a strict Buy American mandate. It cannot do both—requiring the administration to decide which principle it wants to prioritize over the other. In examining that issue, the administration should consider three fundamental realities:

1. No matter what it decides, more than 90% of the total cost of broadband construction will go to American labor and materials. Seventy percent will go to labor, and of the remaining 30% of construction costs, 70% will be spent on the fiber conduit, for which there is an existing American supply.
2. There are many critical elements of broadband networks that, while representing less than 10% of the budget, are essential and cannot in the near term be sourced from American manufacturers. As the NTIA already discovered in analyzing the Buy American implications for its Middle Mile Grant Program, certain critical components (including “broadband switching equipment, broadband routing equipment, dense wave division multiplexing transport equipment, and broadband access equipment”) are “sourced exclusively from Asia.” 
3. If the Buy American requirements are enforced for all the components necessary to deploy and operate the networks, it will cause significant delays in deploying broadband networks everywhere. Those deploying the networks would have to halt their current plans until they convince enterprises capable of manufacturing those components to do so in the US.