Buy America and BEAD

In the State of the Union speech earlier in 2023, President Biden made it clear that he wants to see the monies spent on infrastructure projects follow the Buy America rules. The law says that purchasing funded by the US government should have a preference for using American-made products. The rules allow for waivers from this provision, but the presumption is that without a waiver that American goods must be used. The National Telecommunications and Information Administration (NTIA) requested waivers from Buy America rules when administering past grant programs, including the recent $1 billion middle-mile grants. The NTIA has made it clear that it doesn’t see any need for a waiver to buy American fiber optic glass or cable and says there should be sufficient time for manufacturers to re-shore or expand US manufacturing to meet the demands from the Broadband Equity, Access, and Deployment (BEAD) grants. The market reality is that most of the costs of any broadband grant project will be spent on American inputs. The cost of labor is usually the largest component of network costs, and the grants require this work to be done by American firms. As the NTIA points out, there are plenty of sources of American fiber and conduit. But the sticky item is going to be electronics. If the NTIA plays hardball on fiber electronics, it will be nearly impossible that any broadband provider can fulfill the Buy American provision.