Biden Administration Grants Exemptions to ‘Buy America’ Rules for $42 Billion Broadband Internet Initiative

The Biden administration has made a significant decision regarding the “Buy America” rules for its $42 billion broadband internet initiative. In order to meet the needs of the project, the administration has granted exemptions to the made-in-America requirements for certain components used in the buildout program. This decision has been made because not enough materials, such as fiber optic cable components, are produced in the United States.

The Build America Buy America Act (BABA), enacted as part of the Infrastructure Investment and Jobs Act, imposes domestic procurement requirements on federally-funded infrastructure projects. This means that all iron, steel, manufactured products, and construction materials used in these projects must be made in the United States. However, there are conditions under which waivers can be applied for. These include situations where using domestically made products would increase the project cost by 25 percent or if it would be “inconsistent with the public interest.” Another condition is if the materials and products subject to domestic procurement preference are not produced in sufficient quantity or at acceptable quality standards.

The National Telecommunications and Information Administration (NTIA) applied for a BABA waiver last summer and received approval on February 22. This waiver allows for close to 90 percent of the funds spent on equipment for the broadband internet buildout program to be spent on equipment manufactured in the U.S. The decision to grant this waiver followed a year of engagement with stakeholders, including U.S. manufacturers, internet providers, trade associations, and unions.

The Department of Commerce (DOC) determined that a BABA waiver was appropriate for the broadband project because certain products and construction materials are not produced in sufficient quantities in the United States. The waiver is time-limited through February 22, 2029, and targets specific items while requiring certain manufacturing processes to take place in the U.S. The stakes for this project are high, as it represents the largest investment to expand high-speed internet access in American history.

While some commenters called for a blanket waiver for the entire optical fiber production process and non-U.S. country-of-origin fiber, the waiver is limited to non-optic glass inputs to optical fiber. The “Buy America” preference for electronics in the program has been waived, except for four categories. Most of the fiber broadband equipment, including optical fiber and key electronics, will still be made in the United States.

It is important to note that none of the fiber optic cable and optical transmission equipment covered by the waiver will be made in China, as the BABA rules expressly forbid it with limited exceptions. The DOC will review the waiver annually to determine if it is still necessary.

The primary focus of the broadband initiative is to deploy broadband service to unserved or underserved locations. Unserved locations are those without any broadband service or with service offering download speeds below 25 Mbps, while underserved locations offer download speeds between 25-100 Mbps.

Overall, the Biden administration’s decision to grant exemptions to the “Buy America” rules for its broadband internet initiative reflects a careful consideration of stakeholder input and the need to ensure materials are available to build out the networks quickly. This decision aims to balance the goal of protecting U.S. jobs with the practical challenges of sourcing all components domestically. As the largest investment in expanding high-speed internet access in American history, this initiative has the potential to bridge the digital divide and bring essential connectivity to unserved and underserved communities across the country.