[Federal Register: July 1, 2009 (Volume 74, Number 125)]
[Notices]
[Page 31410-31411]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jy09-33]
[[Page 31410]]
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DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration
Broadband Technology Opportunities Program
Agency: National Telecommunications and Information Administration,
U.S. Department of Commerce.
Action: Buy American Exception under the American Recovery and
Reinvestment Act of 2009.
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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).
DATES: July 1, 2009.
ADDRESSES: Broadband Technology Opportunities Program, Office of
Telecommunications and Information Applications, National
Telecommunications and Information Administration, U.S. Department of
Commerce, Room 4812, 1401 Constitution Avenue, NW, Washington, DC
20230.
FOR FURTHER INFORMATION CONTACT: Broadband Technology Opportunities
Program, telephone: (202) 482-5032.
SUPPLEMENTARY 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.
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\1\ Recovery Act Sec. 1605, 123 Stat. at 303; 2 C.F.R. Sec.
176.80.
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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\
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\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.
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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, 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. 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.
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\3\ See Recovery Act Sec. 1605(b)(1), 123 Stat. at 303.
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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 ``non-availability''
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\
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\4\ See Recovery Act Sec. 6001(d)(1)-(2), 123 Stat. at 513.
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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 technically-advanced 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:
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.
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 case-by-
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. E9-15514 Filed 6-30-09; 8:45 am]
BILLING CODE 3510-60-S