Broadband stimulus exempted from ‘buy American’ rule

The federal government is backing away from the ‘buy-American’ requirements originally attached to broadband stimulus award guidelines that had been highly criticized by broadband equipment vendors.

In a notice published today, the National Telecommunications and Information Administration, which is in charge of distributing nearly $5 billion of the $7.2 billion broadband stimulus initiative, announced an “exception” to the directive that American companies be given preference in receiving broadband stimulus funding.

The Secretary of Commerce has granted a “limited waiver” of the buy American provision in the American Recovery and Reinvestment Act of 2009 “with respect to certain broadband equipment that will be used in projects funded under [the broadband stimulus program,” NTIA said.

“Certain broadband equipment” includes:

• Broadband switching equipment – Equipment necessary to establish a broadband communications path between two points.
• Broadband routing equipment – Equipment that routes data packets throughout a broadband network.
• Broadband transport equipment – Equipment for providing interconnection within the broadband provider’s network.
• Broadband access equipment – Equipment facilitating the last mile connection to a broadband subscriber.
• Broadband customer premises equipment and end-user devices – End-user equipment that connects to a broadband network.
• Billing/operations systems – Equipment that is used to manage and operate a broadband network or offer a broadband service.

It does not include optic cables, coaxial cables, cell towers, and “other facilities that are produced in the United States in sufficient quantities to be reasonably available as end products,” NTIA said, adding that for equipment not included in either list, applicants can request waivers on a case-by-case basis.

In explaining its decision, NTIA appeared to agree with large equipment vendors including powerful names in the broadband industry such as Cisco Systems and Paris-based Alcatel-Lucent. Those vendors and others, which typically deal with suppliers across the globe, argued that following the rule would be prohibitively inefficient.

“It would be difficult, if not impossible, for a [broadband stimulus] applicant to have certain knowledge of the manufacturing origins of each component of a broadband network, and the requirement to do so would be so overwhelmingly burdensome as to deter participation in the program,” NTIA said.