Daily Rules, Proposed Rules, and Notices of the Federal Government
In accordance with section 1605(c) of the Recovery Act and section 176.80 of the rules of the Office of Management and Budget (OMB), RUS hereby provides notice that it is granting a limited waiver of section 1605 of the Recovery Act with respect to certain broadband equipment that will be used in projects funded under BIP. (
The Recovery Act appropriates $2.5 billion in budget authority to RUS to establish BIP, through which RUS will provide grants, loans, and loan/grant combinations for broadband initiatives throughout the United States, including projects in unserved and underserved rural areas. Section 1605(a) of the Recovery Act, the “Buy American” provision, states that none of the funds appropriated by the Act, including the funds that have been dedicated BIP, “may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.”
Sections 1605(b) and (c) of the Recovery Act authorize 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 manufactured 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 manufactured goods produced in the United States will increase the cost of the project by more than 25 percent. If the head of the Federal department or agency determines that it is necessary to waive application of the Buy American provision, then the head of the department or agency shall publish a detailed justification in the
The Agency has determined that, as applied to certain broadband equipment used in a BIP project, the application of the Buy American provision would be inconsistent with the public interest.
First, RUS recognizes that much of the finished products used to manage and operate broadband infrastructure and offer broadband service are manufactured outside of the United States. The manufacturing supply chain varies by product and changes constantly due to the influence of global supply and demand. The result is a very competitive and complex production landscape with components and end products being manufactured and assembled in a large number of countries. While, arguably, the Secretary could have relied on the “non-availability” exception for granting a waiver, the burden placed on the Department in sourcing and evaluating the availability of each component of broadband equipment would be significant, and the task of sourcing and evaluating would be difficult to complete given the speed with which Congress has told RUS to allocate funds under the Recovery Act. In addition, requiring public entities to document the origin of broadband equipment and their components in order to determine whether they fit within the scope of the Buy American provision would severely complicate those applicants' ability to apply for funds and would place an undue burden on State and local governments. Taken as a whole, these burdens would cause delays and would likely thwart the goal of Congress to “establish and implement the [BIP] grant, loan and loan/grant combination program as expeditiously as practicable,” and the Recovery Act's requirement that RUS obligate all funds under BIP by September 30, 2010. (
Second, a limited waiver will help facilitate the construction of modern broadband networks—an essential component of the Recovery Act. Applicants to BIP must have the flexibility to incorporate the most technically-advanced components into their infrastructure, and a limited waiver gives them the ability to incorporate the latest technologies. Third, consistent with the Recovery Act, a limited waiver will help stimulate job growth for construction workers, technicians, equipment designers, engineers, and others who will operate the broadband infrastructure. Fourth, while OMB has clarified which countries would be exempt from the Buy American provision, some of the key countries that produce broadband equipment would not be exempt. Finally, the broadband industry is very dynamic and global, and equipment can change over the course of a build out. Subjecting public applicants for BIP funds to the Buy American provision ultimately would slow broadband deployment and undermine President Obama's broadband initiatives.
Based on the public interest finding discussed above and pursuant to section 1605(c), RUS is granting a limited waiver of the Recovery Act's Buy American requirements with respect to BIP funds used for the following essential components of a modern broadband infrastructure:
Note that this list does not include fiber optic cables, cell towers, and other facilities that are produced in the United States in sufficient quantities to be reasonably available as end products. To the extent that an applicant wishes to use equipment that is not covered by the proposed waiver, it may seek a waiver on a case-by-case basis as part of its application for BIP funds, stating the statutory exemption upon which it is relying and its rationale for receiving a waiver.
This supplementary information constitutes the “detailed written justification” required by Section 1605(c) of the Recovery Act and Section 176.80 of OMB's rules for waivers of the Buy American provisions.
Public Law 111-5 § 1605, 123 Stat. 115; 2 CFR 176.10