NTIA Axes Fiber Cables, Keeps Transport Equipment in Buy America Waiver for Middle Mile

WASHINGTON, May 4, 2023 – The National Telecommunications and Information Administration has finalized its long-awaited exemption to domestic manufacturing laws for its $1 billion Enabling Middle Mile Broadband Infrastructure program that will see certain transport equipment exempt to facilitate the building of the networks.

The Build America, Buy America law under the Infrastructure, investment and Jobs Act requires that at least 55 percent of the cost of components funded by federal dollars be made in the United States. But the NTIA recognized that not all critical components of broadband networks are available in enough supply inside the country to build the infrastructure to meet the program’s four-year build timeline and released a proposed exemption for certain components for comment last September.

The waiver, which is dated April 19, will include broadband routing equipment, switching equipment, microwave backhaul equipment such as transceivers and antennas, optical fiber transport equipment but not fiber cable, undersea cable equipment, and telemetry routers and switches. The NTIA noted comments that said it could take a minimum of between 24 and 36 months to onshore such equipment.

The agency notably removed mention of “fiber optic cable” – which was in its initial proposal – after industry and “subsequent market research” told it that fiber cables are made in enough supply in the country.

The waiver is limited to funds provided by the NTIA between March 1, 2023, to March 1, 2024. The agency will then review the waiver every six months from when the first award is given to assess whether it should modify the scope of the exemption, it said in the waiver document. The subjects of the waiver must also report foreign sources for their equipment.

The waiver comes ahead of the middle mile award announcements expected sometime this spring.

“The Fiber Broadband Association appreciates that NTIA has issued a targeted, limited waiver for electronic and connectivity products for their Middle Mile Grant Program,” Marissa Mitrovich, vice president of public policy at the trade association, told Broadband Breakfast.

“We appreciate their thoughtfulness; this waiver reflects that they have been listening to stakeholders while simultaneously meeting their commitment to connect all Americans to fiber broadband networks and create domestic manufacturing capabilities and good paying jobs,” Mitrovich added.

The NTIA said while the Chips and Science Act — which will facilitate the domestic manufacturing of semiconductors that go into telecommunications networks — is expected to assist in meeting Buy America rules, the timeline for construction of these manufacturing plants will mean the “impact of that investment is unlikely to be realized for several years” — between three and five years by industry estimates, the agency said.

The document said commenters have urged the agency to use the middle mile waiver as a precedent for its bigger brother, the flagship $42.5-billion Broadband Equity, Access and Deployment program. The BEAD program has more flexibility when it comes to funding various parts of the network.

But in a disclaimer, the NTIA said the middle mile waiver is based on the “facts and circumstances” about the program and “does not constitute, nor should it be construed as, precedent for or a baseline for any other grant program administered by NTIA.”

The agency has been pressured by the industry to include a waiver for certain components using money from the BEAD program, the funds from which are expected to be delivered to the states by June 30. Industry participants have said that it will be difficult to complete BEAD builds by the required five-year timeline without a waiver for components they say are made largely overseas.

The agency has signaled over the past several months that it will be difficult getting Buy America waivers for the BEAD program. Any future BEAD waiver, according to a top Commerce Department advisor, will be product-specific.