Future Broadband Waiver of Buy America Must Be Product-Specific, Says Commerce

‘We aren’t doing the blanket waivers of the past,’ said Kevin Gallagher, a top Commerce Department Official.

Future Broadband Waiver of Buy America Must Be Product-Specific, Says Commerce
Photo of Kevin Gallagher at TIA's BEAD Success Summit by Drew Clark

CRYSTAL CITY, Va., April 20, 2023 – A top advisor to Commerce Secretary Gina Raimondo said Thursday that any waiver of Buy America rules that might be issued by the agency for its largest broadband infrastructure program would be crafted narrowly on a component-by-component basis.

Kevin Gallagher, senior advisor to Raimondo, said Thursday that the administration is considering a narrow potential waiver of the Build America, Buy America rules for the Broadband Equity, Access and Deployment program. But he cautioned, “we aren’t doing the blanket waivers of the past.”

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The waiver of the Buy America rules for the Commerce Department’s National Telecommunications and Information Administration’s middle mile program proposed in September could be issued in a matter of days, and by the end of April at the latest, he said.

Grants to awardees under the $1 billion middle mile grant program will be awarded later this Spring, said both Gallagher and Will Arbuckle, policy advisor at NTIA. Of the November 2021 Infrastructure Investment and Jobs Act’s $65 billion for broadband, $1 billion was devoted to middle mile broadband, with $42.5 billion devoted to BEAD.

Dissecting components necessary to be waived

Speaking on Thursday at the Telecommunications Industry Association’s BEAD Success Summit here, both officials emphasized the need to balance the demands for broadband buildout with the Biden administration stated commitment to Buy America rules.

President Biden specifically referenced fiber-optic cables in his State of the Union address in February.

Gallagher, who advises Raimondo on a department-basis, spoke of the “clarion call” issued by the president as a reason for why fiber-optic cables need to be made in America.

But he also said that there were some products that cannot economically be manufactured in the United States on a scale necessary for the BEAD program.

“We believe that if it can be made in America, it should be made in America,” Gallagher said.

“Now we know that not every product required for a broadband network can be” made in America, he said. “But some can. And if can, it should be made in America.”

Gallagher praised recent announcements by CommScope and Corning to beef up fiber manufacturing in the United States.

But when asked about semiconductor products deployed with fiber-optic cables, which almost all industry officials say are not made in America in any reasonable quantity, Gallagher said the administration was open to a product-based waiver:

“What you will see at the end is a wavier that is much more targeted at a set of products that can be made in America, and a set of products that can’t” be made in America, he said.

Gallagher also addressed the implementation of the overall BEAD program, and highlighted the role of the Commerce Department’s federal program officers in helping state broadband officials implement the BEAD program.

More middle mile waiver details

Following Gallagher’s remarks, Arbuckle provided a more detailed timeline of the administration’s consideration of Buy America requirements. He emphasized his interactions with industry officials on the role of existing supply chains, opportunities to make existing telecommunications products in America, and the opportunity cost of doing so.

He also said that he and the Office of Management and Budget’s Buy America office will be issue a Frequently Asked Question document on the details of the administration’s consideration.

Responding to a question about the middle mile waiver that will be issued this month, Arbuckle said “the middle mile waiver should not be seen as prescedental” for a future BEAD waiver.

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