[Federal Register Volume 74, Number 125 (Wednesday, July 1, 2009)]
[Notices]
[Pages 31410-31411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15514]



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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:
    <bullet> Broadband Switching Equipment -- Equipment necessary to 
establish a broadband communications path between two points.
    <bullet> Broadband Routing Equipment -- Equipment that routes data 
packets throughout a broadband network.
    <bullet> Broadband Transport Equipment -- Equipment for providing 
interconnection within the broadband provider's network.
    <bullet> Broadband Access Equipment -- Equipment facilitating the 
last mile connection to a broadband subscriber.
    <bullet> Broadband Customer Premises Equipment and End-User Devices 
-- End-user equipment that connects to a broadband network.
    <bullet> 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