Federal Register: July 1, 2009 (Volume 74, Number 125)
DOCID: fr01jy09-33 FR Doc E9-15514
DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration
NOTICE: NOTICES
DOCID: fr01jy09-33
SUBJECT CATEGORY:
Broadband Technology Opportunities Program
DATES: July 1, 2009.
DOCUMENT SUMMARY:
The National Telecommunications and Information Administration (NTIA) hereby provides notice that on June 19, 2009, the Secretary of Commerce granted a limited waiver of section 1605 of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Pub. L. No. 111 5, 123 Stat. 115, 303 (2009) with respect to certain broadband equipment that will be used in projects funded under the Broadband Technology Opportunities Program (BTOP).
SUMMARY:
Broadband Technology Opportunities Program
DOCUMENT BODY 2:
Agency: National Telecommunications and Information Administration, U.S. Department of Commerce.
Action: Buy American Exception under the American Recovery and
Reinvestment Act of 2009.
SUPPLEMENTAL INFORMATION
In accordance with section 1605(c) of the
Recovery Act and section 176.80 of Title 2 of the Code of Federal
Regulations, NTIA hereby provides notice that on June 19, 2009, the
Secretary of Commerce granted a limited waiver of section 1605 of the
Recovery Act (Buy American provision) with respect to certain broadband
equipment that will be used in projects funded under BTOP.\1\ The basis
for this waiver is a public interest determination pursuant to section 1605(b)(1) of the Recovery Act.
\1\ Recovery Act Sec. 1605, 123 Stat. at 303; 2 C.F.R. Sec. 176.80.
I. BACKGROUND
The Recovery Act appropriates $4.7 billion to NTIA to establish
BTOP, through which NTIA will provide grants for broadband initiatives
throughout the United States, including projects in unserved and
underserved 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 to grants under BTOP,
``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.''\2\
\2\ Because the Buy American limitation applies only to public
works and public buildings, completely private projects need not
obtain a waiver to utilize iron, steel, and manufactured goods
produced outside of the United States. Note, however, that public
private partnerships are considered public for purposes of the Buy American limitation.
Subsections 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 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. If the head of the Federal department or agency waives the Buy American provision, then the head of the department or agency is required to publish a detailed justification in the Federal Register. Finally, section 1605(d) of the Recovery Act states that the Buy American provision must be applied in a manner consistent with the United States' obligations under international agreements.
II. PUBLIC INTEREST FINDING
The Secretary of Commerce has 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, enduser 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
casebycase 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. Thus, implementing the BTOP
without a limited programmatic waiver encompassing broadband network
components would jeopardize the success of the program and undermine the broadband initiative.
\3\ See Recovery Act Sec. 1605(b)(1), 123 Stat. at 303.
First, 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 of Commerce could have relied on the ``nonavailability''
exception for granting a waiver, the burden placed on the Department of
Commerce 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 NTIA to allocate the BTOP funds. 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 [BTOP] grant program as expeditiously as
practicable,'' and the Recovery Act's requirement that NTIA to obligate all funds under BTOP by September 30, 2010.\4\
\4\ See Recovery Act Sec. 6001(d)(1)(2), 123 Stat. at 513.
Second, a limited waiver will help facilitate the construction of
modern broadband networks an essential component of the Recovery
Act. Applicants to BTOP must have the flexibility to incorporate the
most technicallyadvanced components into their infrastructure, and a limited waiver gives them the ability to
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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 the
Office of Management and Budget 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 buildout. Subjecting public applicants for BTOP funds to
the Buy American provision ultimately would slow broadband deployment and undermine the broadband initiatives.
III. WAIVER
On June 19, 2009, based on the public interest finding discussed
above and pursuant to section 1605(c), the Secretary granted a limited
waiver of the Recovery Act's Buy American requirements with respect to
BTOP funds used for the following essential components of a modern broadband infrastructure:
Note that this list does not include fiber 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. To the extent that an applicant wishes to use equipment
that is not covered by this waiver, it may seek a waiver on a caseby
case basis as part of its application for BTOP funds, stating the
statutory exemption upon which it is relying and its rationale for
receiving a waiver. Further information on how to apply for a waiver will be available in BTOP Application Guidelines.
Dated: June 26, 2009.
Anna M. Gomez,
Acting Assistant Secretary for Communications and Information. [FR Doc. E915514 Filed 63009; 8:45 am]
BILLING CODE 351060S
FOR FURTHER INFORMATION CONTACT
Broadband Technology Opportunities Program, telephone: (202) 4825032.