Buy America
Industry Insight Series

On February 23, 2024, the National Telecommunications and Information Administration (NTIA) issued the final Limited General Applicability Nonavailability Waiver of the Buy America Domestic Content Procurement Preference as Applied to Recipients of Broadband Equity, Access, and Deployment (BEAD) Program funding. In addition, NTIA also released FAQs to be periodically updated that provide some additional detail.

As a reminder, Build America Buy America (“Buy America”) is a federal requirement that applies to federal financial assistance programs including BEAD. Buy America has 2 criteria: (1) the item is manufactured in the United States, and (2) 55% of the components (by cost) are sourced directly from the United States. Thus, BEAD funds must be used to purchase products that meet the Buy America law.

The purpose of the Waiver is for NTIA to grant exceptions to Buy America law for certain products so that providers or manufacturers do not need to individually apply for waivers. Manufacturers either meet the requirements or they do not. If a company does not meet the requirements for certain products, those products, are not eligible to be sold into the BEAD program.

There are very few limited additional exceptions, and it is the responsibility of a state (not the subrecipient) to apply for allowable waivers which will be considered on a case-by-case basis. Overall, the Waiver is designed to nullify the need for additional waivers.

The below chart details the scope of the Waiver for broadband electronics.

Scope of Waiver for ElectronicsAll broadband electronics (including IP/Optical and FWA) are fully waived of both criteria except OLTs, OLT Line Cards, OLT Optic Pluggables (subscriber facing), and Standalone ONT/ONUs
Criteria: 55% of cost of components comes from US
Fully waived for all electronics including OLTs, OLT Line Cards, OLT Optic Pluggables and standalone ONTs
Criteria: Must be manufactured in the USFully waived for all electronics except for OLTs, OLT Line Cards, OLT Optic Pluggables and certain ONTs. Processes are specified in the Waiver
de minimis Exception​Does NOT apply to OLTs, OLT Line Cards, OLT Optic Pluggables and standalone ONTs

The Waiver and FAQs emphasize that standalone ONTs/ONUs must be manufactured in the US, and a subrecipient cannot circumvent Buy America compliance by disabling the functionality of a combined ONT/router to turn it into a stand-alone ONT. Further, Consumer and customer premises equipment (i.e. household routers) are not considered “broadband infrastructure” eligible for BEAD funds.

The Waiver also declines to waive either of the Buy America criteria for enclosures defined as:

  • Cabinets (passive and active)​
  • Vaults and other below-ground housings​
  • Pedestals and above-ground housings​
  • Closures and terminals​

For enclosures that fall under those categories, the materials and manufacturing must occur in the United States. Additional key terms from the Waiver include the following:

Term of Waiver​The waiver is five years in length from Feb. 2024 – Feb. 2029, and it applies to the entire period of performance of the award
Products manufactured in China​This is prohibited as “covered communications equipment”
Timing of Compliance​A product must be compliant BEFORE it can be installed or used
Matching Funds​Buy America rules apply to the entire project including matching funds
de minimis Exception​Applies to certain categories of things that are not waived including “other network equipment”. This does not apply to fiber, electronics, or enclosures​
Definition of Broadband Infrastructure for BEAD (and eligible for BEAD funds)​ See FAQs page 3“Infrastructure that extends to the device that terminates service to the location served. For example, in an end-to-end fiber optic deployment, the broadband infrastructure project would terminate at the ONT/ONU at the customer premises, whether that ONT/ONU is a standalone ONT/ONU or a combined ONT/ONU. In a fixed wireless network, the broadband infrastructure project would terminate at the subscriber radio.”

Finally, to help states and future subrecipients of the BEAD program navigate Buy America compliance, NTIA will be publishing a list of products that manufacturers self-certify meet the Wavier guidelines subject to fine or imprisonment. For anyone participating in BEAD, this is critical to ensuring that applicants are not committing to purchasing equipment that falsely claims to be Buy America compliant. Transparency for protecting the commitments to the US manufacturing base for these products is critical to the success of this program.

Will Arbuckle, Senior Policy Advisor to NTIA who led the effort in developing the Waiver, noted in a blog published on February 23, 2024, that this Waiver followed a year of “deliberate engagement with stakeholders across the country” that resulted in more than “385 meetings with over 50 firms and 250 individuals—representing a diverse range of manufacturers, Internet service providers, trade associations, and unions among others.”  

Whether you agree or disagree with the substance of the Waiver, NTIA enabled everyone to participate in the process. Now let’s get to work and achieve the goal of closing the digital divide and connecting all Americans with equipment manufactured in the United States.

This series features insight into important broadband industry issues from industry leaders.

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