Some States Emphatic About Buy American BEAD Requirements

Some states emphasize Buy American preference requirements more than others in their broadband equity, access and deployment plans, we found in our analysis of NTIA-approved BEAD volume 2 initial proposals. Whether Buy American provisions in state BEAD plans mean all the fiber optics and other materials used will be solely American-made is unclear. NTIA has signed off on 34 BEAD volume 2 plans so far, including Wyoming's on Thursday (see 2408080054).

Buy American federal rules date to the 1950s and started with price preference policy in federal procurement, though they didn't apply to money the federal government distributed to other entities, such as states, said Charles Benoit, Coalition for a Prosperous America trade counsel. That began to change in the 1970s and 1980s with flow-down requirements for recipients of Department of Transportation funding, he said. The Infrastructure Investment and Jobs Act, signed in 2021, included similar flow-down language related to telecom covering state agencies acting as the procuring or granting entities. He said buy American price preferences are often "a hot mess," with procuring agencies regularly failing to apply them. Part of the problem is that the U.S. has procurement treaties with roughly five dozen nations that treat goods from those countries -- such as Mexico, Australia and numerous European nations -- as if they were American, he said. That greatly blunts the impact, he said.

While numerous volume 2s say BEAD subgrantees can obtain waivers when needed to bypass Buy American provisions, waivers are relatively rare in DOT projects, given the well-developed ecosystem of suppliers for highway infrastructure, Benoit said.

NTIA's Build America Buy America BEAD waiver system will mean that "the majority of fiber broadband equipment -- including optical fiber, fiber optic cable, key electronics, and enclosures -- necessary to bring affordable and reliable high-speed Internet service to everyone in America being made here in the United States," Senior Policy Adviser Will Arbuckle blogged last month. BEAD "is not just a connectivity program, it’s a jobs program," he said as the agency announced Buy American self-certification and compliance frameworks. Those are "part of a larger effort to drive investment in domestic manufacturing, secure our domestic broadband supply chain, and ensure that potential BEAD Program participants are ready to comply" with Buy American provisions, he said.

Some states use their Buy American language as an opportunity to make policy pronouncements. Public infrastructure dollars should not go to companies that have offshore operations or factories, particularly countries "that do not share or openly flout the commitments of the United States to environmental, worker, and workplace safety protections," Pennsylvania said in its volume 2. Entities using federal dollars "should give a commonsense procurement preference for the materials and products produced by companies and workers in the United States in accordance with the high ideals embodied in the environmental, worker, workplace safety, and other regulatory requirements of the United States."

Delaware is “deeply committed to the public policy purposes” of Buy America and other "restrictions on purchases of fiber equipment,” the state said in its plan. “Any potential subgrantee that cannot certify a track record of full compliance will be required to provide detailed narrative and documentation regarding its histories of challenges or noncompliance.” The state plans to “actively use its subgrantee monitoring program post-award to verify” compliance, Delaware said.

Virginia's Office of Broadband "will place emphasis on ensuring that taxpayer dollars are spent procuring needed products and supplies from American workers and businesses, thereby strengthening and growing U.S. domestic manufacturing capacity," the state said in its volume 2. It said BEAD funding cannot be used for fiber optic cable and optical transmission equipment manufactured in China absent a waiver.

“Strategically important technologies -- like those that ensure the security, integrity, and reliability of network data -- should be produced in America,” according to the Illinois plan. “If a product's domestic manufacturing line can be scaled quickly, it should be produced in America.” And if fiber or another critical product “comprises a significant portion of the overall network spend, it should be produced in America,” Illinois said.

Asked about its ability to meet the expected wave in 2025 and 2026 of orders for American-made fiber optics, Corning Optical Communications was bullish. The company "has invested to meet the demand we expect from programs like BEAD," Bob Whitman, Corning vice president-global market development, carrier networks, said in an emailed statement. "Since 2020, we've invested more than $500 million in new optical fiber and cable capacity, nearly doubling our ability to serve the U.S. market," he said. Corning operates five cable plants and two fiber plants in North Carolina, and its facilities are among the world's largest, he said. That capacity "can serve more than 5 times the annual demand for BEAD," he said. "With our investments in the U.S. and our highly trained workforce, we are well-positioned to connect all Americans.”