Blog

Jun 06, 2023

NTIA Waives 55 Percent Cost Requirement for Fiber Electronic Components

Manufacturers can self-report products are Buy America compliant to be included on NTIA public list. Published on By ORLANDO, August 23. 2023 – The National Telecommunications and Information

Manufacturers can self-report products are Buy America compliant to be included on NTIA public list.

Published

on

By

ORLANDO, August 23. 2023 – The National Telecommunications and Information Administration is proposing to waive the 55 percent cost requirement for components of fiber electronics in the waiver for Build America Buy America regulations for the Broadband Equity Access and Deployment program released on Tuesday.

Buy America regulations require that projects receiving federal funding must source material and 55 percent of the cost of components from American manufacturers as part of the White House’s initiative to enhance domestic manufacturing. The proposed waiver preserves the 55 percent cost requirement for fiber optic cables.

But the waiver proposes to waive the 55 percent cost of components test for the four categories of electronics that are not waived for all Buy America requirements – optical line terminals and remote optical line terminals, OLT line cards, optic pluggable and optical network terminals and optical network unites. Electronics will still need to be made in the United States, but U.S. components will not need to hit 55 percent of the total cost.

Many commenters to the NTIA raised concerns that integrated circuits in the components alone make up the majority of the cost of an electronic and are primarily manufactured in Southeast Asia, William Arbuckle, policy advisor at the NTIA, said in remarks to Fiber Connect attendees on Wednesday.

Additionally, fiber component manufacturers that express commitment to onshore manufacturing of key electronics may self-certify that their projects are compliant with Buy America preference, according to the NTIA proposal. The NTIA will publish and maintain a list of manufacturers and their products that the company has certified, subject to fine and imprisonment, are compliant to Buy America.

The list will alleviate manufacturer’s concerns that they will be undercut by companies falsely claiming to be Buy America compliant after making heavy investment in U.S. manufacturing, said Arbuckle.

“Working alongside the Department of Commerce, we will continue to take the necessary steps required and plan to become the first broadband technology vendor to be listed as Buy America compliant – eliminating the guesswork for any states or infrastructure builders participating in the BEAD program,” said Sandy Motley, president of fixed networks at Nokia in a press release.

The goal for Buy America waiver is to ensure that U.S. manufacturing is maximized while simultaneously ensuring that providers are able to build out the necessary infrastructure in a sustainable way, said Arbuckle. He added that the NTIA met with as many fiber providers and suppliers to discuss the possible barriers to Buy America requirements which heavily influenced the waiver.

Each BEAD project will have the opportunity to apply to a di minimis waiver that applies to a catch all category of other network equipment, which includes lashing wire, brackets, and handhelds, continued Arbuckle. Electronics are exempt from the waiver but the NTIA hopes that it will provide some flexibility to the program, he said.

The NTIA guidance comes at the heels of guidance released by the Office of Budget Management last week which clarified Buy America rules for all projects funded under the Infrastructure, Investment and Jobs Act. NTIA’s proposed waiver will work hand-in-hand with the OBM guidance, said Arbuckle, but specified that BEAD-specific guidance comes directly from the NTIA.

This month, Nokia announced an extensive fiber electronics manufacturing plan in Wisconsin that will provide equipment for new BEAD project builds, making it the first telecom vendor to domestically manufacture these materials. Nokia’s announcement is one of many electronics and fiber domestic manufacturing announcements from providers like CommScope and Corning.

Iowa and Missouri Representatives Speak to Legislative Importance of Broadband

Broadband Builds Will Continue to Ramp Up, Predict Experts

Teralyn Whipple, who joined Broadband Breakfast in 2022, studied marketing at Brigham Young University. She has reported extensively on broadband infrastructure, investments and deployment. She has also headed marketing campaigns for several small companies.

Evan Feinman Tapped as Keynote Speaker for BEAD Implementation Summit

FCC and HUD Partner to Promote Internet Subsidies for Housing Assistance Recipients

Craig Settles: Believe in the Healing Power of Telehealth

FCC’s $68M for Schools and Libraries, NTIA’s $3.5M for Tribes, Broadband Breakfast on CBS

Do Not Overlook Other Broadband Programs, say Experts

GAO Wants NTIA Feedback to Tribes Receiving Smaller Broadband Grants

The USF is facing dwindling funds and pending court challenges.

Published

on

By

WASHINGTON, August 29, 2023 – Telecommunications companies and tech giants disagree on who should provide funding for the Universal Service Fund.

The fund’s money comes from a tax on voice service providers, putting its future in jeopardy as more Americans switch from phone lines to broadband services. The USF spends roughly $8 billion a year to buoy four programs that provide internet subsidies to low-income households, health care providers, schools, and libraries.

In filings submitted to a Senate working group evaluating potential reforms to the program, telecoms argued in public comments that some of this money should be paid by tech companies who provide online services. Tech companies advocated tapping more broadband providers for funds.

The Computer & Communications Industry Association, a trade group representing some of the biggest tech companies in the U.S., said in an August 21 filing that the USF could be saved by one action: “include all providers of internet connectivity in the USF contributions base.”

The National Telephone Cooperative Association, a group of smaller broadband providers that serve rural areas, argued in an August 25 filing that tech companies gain so much from expanded broadband coverage that they should pay directly into the USF, saying “internet-based businesses that benefit from widespread availability and affordability of broadband should contribute to that objective.”

The constitutionality of the USF’s funding model is being questioned in court. On September 19, the Fifth Circuit Court of Appeals will rehear a case brought by the conservative nonprofit Consumers’ Research.

The group argues that in establishing the USF with the Telecommunications Act of 1996, Congress gave the FCC unfettered authority to collect taxes. It also alleges that the FCC has abused this authority by delegating the distribution of funds to a subordinate organization, the Universal Service Administration Company.

The Fifth Circuit originally struck down the petition, saying Congress put adequate guardrails on the FCC’s authority. Three of its five judges were present to hear arguments and hand down a ruling, but the rehearing in September will involve the full court.

The Sixth Circuit denied a similar petition from Consumers’ Research on the same grounds as the 5th Circuit. The group has suits pending in the Eleventh Circuit and D.C.

Sens. Ben Luján, D-N.M., and John Thune, R-S.D., convened the working group in May to evaluate potential reforms to the USF’s structure and guide future policymaking.

Other programs can fund BEAD matching requirements.

Published

on

By

ORLANDO, August 30, 2023 – Representatives for various federal broadband funding programs urged providers to not overlook other funding opportunities available for broadband infrastructure programs amidst excitement for the largest-to-date investment in broadband through the Broadband Equity Access and Deployment program at a Fiber Connect conference Wednesday.

Other federal funding programs can help fill in funding gaps that exist through the $42.5 billion BEAD program, they agreed. These programs are currently funding and will fund many programs across the United States that will meet the same goal as BEAD: connect every unserved and underserved address to high-speed internet.

Savid Johnson of the U.S. Department of Housing and Urban Development added that some funding programs, such as the Community Development Block Grant program, allows entities to use the money to meet the minimum match requirement through BEAD. Many experts have expressed concerns that the high match requirement will prohibit some providers from participating in the program.

There is an “enormous amount of funding” in other programs, said Lakeisha Moise of the U.S. Department of Agriculture Rural Development. She added that the USDA has specific niche working with telecom companies and can help address unique challenges in the industry.

Alternative broadband infrastructure programs include the U.S. Department of Treasury’s Capital Projects Fund which provides $10 billion to a COVID-19 pandemic relief fund that includes broadband infrastructure, the USDA’s ReConnect program that funds grants and loans for rural broadband projects, the White House’s Tribal Connectivity Program for tribal connection, and HUD’s CDBG program.

They cautioned providers to be aware of different requirements across different programs. Nicolette Gerald of the Treasury warned that the Capital Projects Fund requires that providers supply 100 Mbps download and upload speeds, rather than the 100/20 Mbps that BEAD requires.

Outlines subgrant processes and application scoring criteria.

Published

on

By

WASHINGTON, August 25, 2023 – Virginia became the first state to release volume two of its Broadband Equity Access and Deployment program for public comment last week, followed closely by Louisiana on Friday.

The two states seem to be in a contest for “first in the nation” status in implementation of the signature program $42.5 billion program for broadband infrastructure under the Infrastructure Investment and Jobs Act of 2021. Louisiana was the first state to publicly release its five-year and digital equity plans in May and which released it initial proposal volume two on Friday. Many states are looking to Virginia and Louisiana to pave the way forward in designing BEAD program subgrants and answer questions on how to allocate broadband serviceable locations and how to score applications.

Dr. Tamarah Holmes, Virginia’s state broadband officer, has said that the state is on an accelerated timeline for deployment of EBAD funds. It was the first to release the first volume of its initial proposal, due within 180 days of receiving allocation announcements in late June.

Initial proposal volume one outlines how the state will run their state challenge process, which builds on the Federal Communications Commission’s national broadband map. Volume two details the state’s subgrant program. Once approved, states will have access to at least 20 percent of allocated funds.

Virginia’s initial proposal, volume two, outlined the state’s vision for closing the digital divide, addressing adoption issues and enhancing economic growth and job creation. It hopes to complete construction of BEAD funded projects by 2027 and 2028 and increase adoption of the federal broadband subsidy program American Connectivity Program and invest all BEAD money by the end of 2024.

The state’s selection process for BEAD will begin accepting pre-applications form applicants over a 60-day period. Pre-applications must include high level information about the applicant and a statement of qualification for building broadband to unserved and underserved areas of the state.

After the pre application submission deadline, Virginia will publish defined application areas to conflict project areas so that no two applicants are proposing to serve the same locations. Applicants will be required to propose to serve all locations in an application area when submitting applications, “the Office of Broadband will not entertain proposals which do not seek to provide broadband access to all locations within a defined application area.”

Full applications are due 90 days prior the publishing of application areas, which the state office will review and announce. It will also publish a timeline of the process on the office website.

Scoring for BEAD applications will be 45 percent the most cost-efficient proposal, evaluated by the total funding requested to provide broadband access to a defined application area. 20 percent of the score will be based on affordability, referring the applicant’s commitment to provide the most affordable total price to customer for 1 Gigabit symmetrical speed. If the service package is at or below $100 per month, the applicant will receive full credit for this section.

Fair labor practices will take up 10 percent of project scoring. Applicants must demonstrate plans to comply with federal labor and employment laws or produce a record of compliance to these laws. Speed to deployment consists of 5 percent of the score in which providers are scored based on the timeline they produce. The remaining 20 percent is given to local and tribal coordination efforts.

“It is firmly expected that funding available under the BEAD program will address all unserved, underserved and community anchor institutions that lack broadband access,” read Virginia’s plan.

Louisiana’s initial proposal volume two draft outlined that its goal is to provide reliable internet to all residents with a “sense of urgency.” Accordingly, the state will be looking for funded projects to be constructed and executed in the next five years.

The state differs from Virginia in the way it plans to execute its subgrant process and score project applications. Although it will organize the eligible locations in the state into a set of predefined areas, prospective subgrantees will have “wide flexibility” to define their proposed project areas, Louisiana proposes. Proposals can be submitted in the form of groups of project areas as defined by the state.

Higher cost locations will be paired with more desirable eligible locations within each designated area to ensure that providers are equally as competitive for these hard-to-reach areas.

ConnectLA will release pre-qualification requirements to interested prospective subgrantees as well as a list of proposed predefined areas, after which subgrantees can provide required financial, operational, managerial and technical qualifications. Prospective subgrantees will be notified after this window whether they have been deemed qualified to participate in the program. They will then submit round one applications.

Applications will be analyzed to identify any overlap between applications. Any project that brings fiber to the home that does not overlap with any other application will be awarded at the funding level requested, read the proposal. Round two applications will then commence.

Louisiana proposes to rate applications on a point system. Out of a score of 200 possible points, projects will be awarded based on the percentage of maximum available funds requested for a total project area and the percentage of improvement over reference service pricing. It will rank out of 100 possible points a holistic score on fair labor practices based on compliance record.

Additionally, it plans to allocate points to an applicant for enforceable deployment plans faster than 48 months, including economically challenged areas, committing to designated areas that lack resiliency infrastructure, affirmative support from tribal and local stakeholders. It will provide 50 points for fiber to the home projects.

Scoring varies significantly from Virginia’s plan. But both prioritize meeting unserved needs, fair labor practices and affordability. Initial proposals are open for a 30-day comment period.

hbspt.forms.create({ region: "na1", portalId: "20721996", formId: "0f5acd00-6960-4d68-8f00-9516bbbca6e9" });

BroadbandNow: Internet Provider Search and research on the digital divide

Carl Guardino: 100% Broadband Access in the U.S. — The Time is Now

White House Releases ‘Buy America’ Guidance, Does Not Budge on Fiber as ‘Construction Material’

AT&T Launches New Fixed Wireless Service, Lawsuits Over Lead Cables, $27M for Rural South Dakota Broadband

RDOF Winners Seek Supplemental Funding for Covid-related Costs

Nokia Announced Domestic Manufacturing of Electronics Equipment for Fiber

Broadband Breakfast on September 13, 2023 – AT&T and BlackRock’s Gigapower Joint Venture

FCC Adopts Order to Extend $75 Monthly ACP Subsidy to Households in High-Cost Areas

Raimando Calls for U.S. Investment in Semiconductor Manufacturing in Allied Countries