Buy America Mandate Runs Headlong Into Biden's Broadband Plan‍

At his State of the Union speech last month, President Joe Biden stated unequivocally that "we're going to buy American" despite the US spending hundreds of millions of dollars on new broadband connections.

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But it's easier to say than accomplish to achieve that goal. Although it appears that there is enough local fiber optic cable to link towns, the electronic parts, such routers, that turn glass strands into information highways are primarily produced in other nations.

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In order to create new networks, cable companies, semiconductor manufacturers, and wireless providers are pleading with the government to waive the "buy American" requirement. Instead, when domestic sources are produced, the broadband expansion that Biden has prioritized will be delayed by years.

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According to Michael Romano, executive vice president of the trade association NTCA-The Rural Broadband Association, "everyone is working this out." It's doubtful that much, if any, American-made equipment would fulfill the current version of "Buy America" policy.

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The Capital Spending and Jobs Act of 2021 included the Build America Buy America Act, which mandates that all infrastructure projects receive government funding only if they use domestically sourced components. That is true of the $42.5 billion Broadband Equality, Access and Deployment Initiative (BEAD), the centerpiece Biden program for connecting the 30 million Americans without access to high-speed internet, according to the administration.

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Since the Covid-19 outbreak closed schools and offices, broadband has been viewed as a necessity almost on par with power or water, making a quick internet connection a requirement for both education and employment for millions of people. According to Biden's estimation, 35% of rural America still lacks access, which severely disadvantages a sizable portion of the population.

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A number of schemes totalling more than $90 billion have been enacted or expanded by the government and Congress to expand internet access, including the BEAD program, which its proponents describe as a yester opportunity to assure that all Americans are connected.

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The BEAD initiative would provide financial aid to businesses so they could expand their networks and serve more households. Aid recipients are anticipated to include major cable firms like Comcast Corp. and Charter Communications Inc., as well as carriers AT&T Inc. and Verizon Communications Inc., as well as smaller providers like Romano's NTCA.

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Since his first council meeting in 2021, Biden has campaigned for the federal government to concentrate its funding on American-made goods, arguing that doing so will strengthen communities and jobs. He must deal with a trade imbalance in produced communication electronics, which are mainly produced in Asia, at the same time. Wireless radio, cell towers, active devices such client equipment, switches, routers, and user interfaces, much of which are wireless, are required for broadband networks.

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When it comes to the prospect of granting waivers for particular products, administration representatives have given conflicting signals.

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The National Information and Telecommunications Administration's head, Alan Davidson, declared that "the standard has been set quite high." Many broadband programs, notably BEAD, are managed by the Commerce Department division. In a speech on March 15 in Washington, Davidson remarked, "It's not an impossibly high bar, but it's a high bar."

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A Commerce Department official briefed on the situation who spoke on the condition of anonymity because the decision was not yet final said that the agency was still planning to grant a waiver for yet another wideband subsidy, the $1 billion Middle Mile Grant Program to assist with finance lines between local networks. According to the government, the exemption is appropriate because the fiber optic cable is put together in Mexico, whereas nearly two-thirds of the value of network equipment comes from components obtained from Asia.

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Before breaking ground to install new internet connections, businesses need assurance that they will be allowed to purchase foreign technology, according to David Stehlin, CEO of the Telecom Industry Association. Members of the trade association include Cisco Systems Inc., a chipmaker.

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In an interview, Stehlin stated that "a waiver must be in place before then." "No service provider will drill a hole, lay a fiber wire, and wait for the equipment while hoping and praying. They're going to hold off until everything is ready. Hence, the more we wait, the longer it will be before these unreached and underserved populations receive access to internet.

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According to the Communication Technology and Innovation Forum, or ITIF, a non-profit policy organization, the majority of the value of new broadband services is found in the labor and materials, such as fiber and tower, with electronics accounting for less than 10% of network value.

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No matter where the electronics are made, most of the money will end up in American paychecks and ledgers, according to Joe Kane, director of internet and spectrum policy at ITIF.

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Even if you permit waivers, Kane asserted in an interview, "You're going to reap many of the benefits of Build America provisions." It's not like we're going to send all the BEAD money abroad, or anything like that.