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BABA Compliance Ambiguity Remains

NTIA Expects 90% of BEAD Equipment to be American-Made

NTIA expects that 90% of broadband equity, access and deployment (BEAD) equipment spending will go for American-made equipment and materials, said NTIA Office of Internet Connectivity and Growth (OICG) Policy Advisor Will Arbuckle Wednesday in an FTI Consulting webinar. That expectation stems from an NTIA analysis of the availability of American-made items and from numerous companies announcing capacity expansion, he said. "We don't think we are done," with more companies announcing manufacturing expansions to fill BEAD made-in-America demand, he said.

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Akin government contracting lawyer Angela Styles said the agency's tentative Build America, Buy America (BABA) Act waiver process announced last week (see 2308220081) puts a big burden on states and territories to ensure products and construction material used in BEAD deployments meet BABA requirements. She said states and territories should outline in their BEAD initial proposals to NTIA how they will help ISPs understand their BABA responsibilities.

There remains ambiguity about various BABA issues, such as what kind of certification a state needs to ask for and who provides it, Styles said. It's also unclear whether there will be audits or other forms of verification.

Use of American-made products "is something we're taking really seriously," Arbuckle said. He said the guidance in the draft waiver was the result of nearly 250 meetings in the first half of 2023 as the agency developed a data-backed option about current and future supply chains.

There are strict BABA requirements for glass, fiber and fiber cable, but NTIA in its proposed waiver is considering a waiver of the BABA requirement for non-optical glass. Due to concerns raised by industry about electronic components, NTIA will waive BABA requirements for some electronics. Exceptions to that include optical network terminals and optic pluggables, Arbuckle said. There are specific manufacturing steps in the U.S. for those electronics to be considered BABA compliant, such as printed circuit board assembly taking place in the U.S., he said. With U.S.-made semiconductor chips difficult to source, NTIA waived the 55% cost of components test since most of the cost of components is in semiconductor chips and those are largely imported, he said. He said enclosures also aren't eligible for BABA waivers -- manufactured products used at a location where a network location like a fiber split is housed. Other network equipment like products used in BEAD-funded projects like lashing wire or mounting brackets will be subject to BABA and need to be made in the U.S., Arbuckle said..

Arbuckle said NTIA will put out more information on BABA reporting requirements and will host a list where companies can certify their construction materials or products as BABA compliant. OICG Senior Policy Advisor Nick Alexander said recipients of state BEAD funding have the obligation to show BABA compliance, so when dealing with suppliers, talk with them about how that can be demonstrated.

Adtran, which announced plans earlier this month to beef up its electronics manufacturing capacity in Alabama (see 2308160067), is onshoring more work to the facility due to BEAD requirements. said Robert Conger, senior vice president-technology and strategy. "We will be ready this year," before BABA rules are finalized and take effect, he said. Clearfield expanded its Minneapolis footprint in 2015, anticipating higher demand for its fiber products, and last year added substantial warehouse space, said Chief Mraketing Officer Kevin Morgan. He said the company now is looking at issues of BABA compliance, in part through discussions with its various suppliers.