Shulou(Shulou.com)11/24 Report--

According to GWN, the US federal government is investing tens of billions of dollars in broadband networks in the next few years. However, the "Buy American" rule worries many people in the American industry.

Recently, Gary Bolton, CEO of the American Optical Broadband Association, recently communicated with Light Reading, a well-known communications industry media, in which he mentioned the "Buy American" rule, saying: "this makes our members feel very sad."

According to the National Telecommunications and Information Administration (NTIA), the "Buy domestic" activity includes the $42.45 billion Broadband, Fairness, access and deployment Program (BEAD) and other broadband grants covered by the $2 trillion Infrastructure Act subsidy signed by the US government: "'build America. Buy American requires that all iron, steel, manufactured goods (including, but not limited to, optical fiber communications facilities) and construction materials used in projects or other legitimate activities are made in the United States, otherwise it is difficult to get subsidies. "

The money is part of the $65 billion allocated to broadband under the $1 trillion Infrastructure Investment and Employment Act (IIJA) passed in November 2021. It will be distributed through three projects overseen by NTIA. Of this total, the total amount of funds applied for for the Broadband Fair, access and deployment (BEAD) program is $42.5 billion; the promotion of medium Miles Broadband Infrastructure (EMMBI) program is $1 billion; and the National Digital Rights Act (SDEA) costs $1.5 billion.

Trade groups representing Internet service providers have been opposing the "Buy American" rule for months amid supply chain constraints during the outbreak.

For example, as early as January, telecom industry associations including competitive operators Association (CCA), Cellular Telecommunications Industry Association (CTIA), NCTA- American Telecommunications Association, NTCA- Rural Broadband Association, TechNet Telecommunications Industry Association (TIA) and US Telecom sent a letter to Commerce Secretary Gina Raimondo urging NTIA to grant exemptions for Information and Communications Technology (ICT) products involved in Buy American.

"We support more production activities in the US and are willing to work as partners to achieve this goal," the groups said. "however, within the time frame set by the IIJA for the deployment of broadband, we are worried that if exemptions are not granted, it will have a negative impact on companies with thousands of US employees."

Another letter, sent by the School, Health and Library Broadband (SHLB) Alliance, said that the requirement to build America would significantly delay IIJA's broadband infrastructure projects. It further urged the Commerce Department to "issue targeted public interest exemptions for broadband network and consumer devices and continue until companies are able to establish their own production processes in the US."

Network equipment suppliers such as Nokia made similar requests to NTIA, writing in comments earlier this year: "the 'Buy American' rule for suppliers to purchase network components in the US does not recognize the reality of the global supply chain, which is further exacerbated by the current shortage of components."

Cisco also submitted its comments to NTIA in February, saying: "if the legal 'build America, Buy American' requirements apply to NTIA-managed broadband deployment plans, then the broadband rapid deployment plan envisaged in IIJA may be seriously affected."

But in mid-May, when NTIA issued funding terms for BEAD and Middle Mile grants, the conditions of exemption announced were very limited, noting that exemptions were allowed only under the following circumstances: 1. The applicable rules are "not in line with the public interest"; 2. The quantity or quality of the materials produced in the United States for the purchasing project is not enough or unqualified; 3. Using these products will increase the cost of the project by more than 25%.

Some industry insiders are particularly concerned about the impact of these regulations on small network providers competing for subsidies in rural areas, which benefit most from the construction of optical fiber infrastructure.

In a letter last week, Shirley Bloomfield, chief executive of the NTCA Rural Broadband Association, called on senators on the business committee to encourage federal agencies to further explain the rule and formulate looser policies to strengthen the supply chain.

Bloomfield noted that a 2021 survey of NTCA members, mainly made up of small rural broadband providers, showed that 80 per cent of members "reported that they were unable to cancel or delay the procurement of products needed for network deployment" and that these problems had "become more and more serious" since the regulations were issued.

"importantly, these disruptions can have a very serious adverse impact on small suppliers, as NTCA members report that they are concerned about the transfer of supplies to large projects and suppliers," Bloomfield said.

As a result, she said, the regulation could eventually undermine the competitiveness of rural markets: "and could lead to many suppliers serving communities pulling away from existing networks and providing services to nearby rural areas."

In addition, the group called on senators to "encourage the Department of Commerce to do what it can and let Congress consider the possibility of formulating other additional policies or providing additional resources (such as tax breaks or earmarked funds). To promote investment in the production and manufacture of key domestic communications products."

The "build America, Buy American" rule will apply to rural suppliers who have received funding through several large broadband projects, including the $42.45 billion BEAD program and the $2 billion ReConnect program provided to the USDA to build rural broadband networks.

In addition, the USDA says matching funding requirements will be waived for areas that do not have access to broadband households, as well as projects that provide jobs or services for Alaska Native Corporation, Indian retention areas and socially vulnerable groups or communities living in poverty.

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