Industry Seeks Flexibility in Buy American Provision of IIJA

Industry groups and broadband experts want flexibility in the buy American provision of the Infrastructure Investment and Jobs Act, per comments to OMB posted through Tuesday in docket OMB-2023-0004-0001. OMB sought comments on proposed revisions and clarifications to the IIJA's Build America, Buy America Act provisions. Some raised concerns about how the requirements could affect broadband deployment projects funded through NTIA's broadband, equity, access and deployment program and backed establishing a waiver process.

Broadband providers “need to know as soon as possible whether and to what degree ... they can reliably locate and procure compliant equipment,” said NTCA. The group sought more clarity on the proposed definitions of "manufactured" and "component" because state broadband offices "need to account and scope for sufficient compliance" with the buy American requirement in their planning processes. NTCA also asked OMB to coordinate with NTIA to "offer detailed, specific guidance for categories of equipment that will be commonly used in federally funded broadband infrastructure projects." CommScope suggested OMB clarify that "construction materials with de minimis additions of non-construction materials do not change the categorization of such construction materials."

“Many of the components and manufactured products necessary to build out broadband networks are simply either not currently available from U.S. sources, or only available at insufficient scale and/or unreasonable cost,” said NCTA, ACA Connects and Incompas in joint comments. “There is currently no combination of network elements that could create a broadband network that meets the [buy American] requirements,” the groups said, advocating for a waiver process for the BEAD program.

It's "not possible to build out broadband networks by relying only or substantially on U.S. products and materials," said CTIA. The group said the wireless industry “supports efforts to onshore products and materials used in broadband networks to the extent reasonably feasible,” noting broadband networks are “reliant on complicated global supply chains.” Providers "need the flexibility to select the best equipment to build next-generation networks and are dependent on the market that exists today to do that," said USTelecom. The group asked OMB to include the "costs of components purchased" by a manufacturer in its definition of "manufactured" and raised concerns about treating fiber cables or optical fibers as "construction materials" instead of "manufactured products."

The U.S. "lacks a well-developed industrial base capable of meeting broadband deployment requirements and deadlines" set in the BEAD program, said the Information Technology and Innovation Foundation: "An onerous reading of buy-America requirements risks dramatically increasing the cost of broadband deployment or delaying that deployment, potentially for years." ITIF said OMB and NTIA "must address the manufacturing base as it is," saying too strict a mandate would "scuttle" the BEAD program because it "would take years to implement."

Exempting for-profit entities from the buy American requirement "has already created confusion," said the National Rural Electric Cooperative Association. It's "deterring some electric cooperatives from pursuing IIJA and other federal grant opportunities out of belief that they will receive disparate treatment during the application review process," the group said. NRECA said small not-for-profit businesses will be "directly competing" with large for-profit companies in NTIA's middle-mile broadband infrastructure program and "will result in rural communities being left behind."

The Wireless ISP Association said OMB's proposals would "have a significant impact on plans being developed by smaller service providers." WISPA raised concerns about the impact the proposals will have on providers' ability to "secure timely BEAD funding and meet their deployment obligations." The group also said waiving the Buy American provision for BEAD projects that will cost less than $250,000 would “simplify NTIA’s administration and oversight” of the program.