"Buy American" Exemption for Broadband Stimulus Projects

On June 19, Secretary of Commerce Locke granted a limited waiver of section 1605 of the American Recovery and Reinvestment Act of 2009 (Buy American provision) with respect to certain broadband equipment that will be used in projects funded under the Broadband Technology Opportunities Program (BTOP). The recovery Act allows the head of a Federal department or agency to waive the Buy American provision by finding that: (1) applying the provision would be inconsistent with the public interest; (2) the relevant goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (3) the inclusion of the goods produced in the United States will increase the cost of the project by more than 25 percent. Sec Locke determined that, as applied to certain broadband equipment used in a BTOP project, application of the Buy American provision would be inconsistent with the public interest.3 A modern broadband network is generally composed of the following components: broadband switching, routing, transport, access, customer premises equipment, end-user devices, and billing/operations systems. The Buy American provision would prohibit NTIA from awarding a BTOP grant to a public applicant unless that applicant could certify that each element of each broadband network component containing iron, steel, and manufactured goods are produced in the United States. As explained more fully below, it would be difficult, if not impossible, for a BTOP 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. Requiring a BTOP applicant to request a waiver on a case-by-case basis also would be such an administrative burden on the applicant as to discourage participation in the program and would increase the agency's time and costs for processing BTOP applications for broadband infrastructure projects.