More Onshoring Expected After 'Seismic' Nokia News

With BEAD buildout subject to Buy America rules, Nokia will domestically manufacture fiber projects, it announced last week in Kenosha, Wisconsin, with Vice President Kamala Harris (see 2308030076). “The Nokia announcement was pretty seismic,” Bolton told us. The Finnish company's committing to build equipment in the U.S. “basically took any other argument off the table,” he said. “Everybody will follow suit.”

It’s not too late for other companies to come onshore, said Telecommunications Industry Association Senior Vice President Melissa Newman on a panel. NTIA has been talking to “everybody and anybody who will meet with them,” said Newman. “They called us [and] we gave them the names and contact information of everybody we could so that they had a complete understanding of the supply chain ecosystem.”

“Look [for] other providers announcing similar types of partnerships and construction,” said American Association for Public Broadband Chair Angela Bennink. “They have been talking with NTIA for some time.”

Ericsson makes wireless equipment at a Texas plant, noted Craig Schwechel, the Swedish company’s principal consultant. “The stickier part for Ericsson with regard to the NTIA rules is where the subcomponents come from.” Unless a rule requiring that more than 55% of a component have U.S. origin is waived, “it’s very difficult at this time for any electronics … to be compliant,” said Schwechel. “Realize that we took 30 years to offshore our supply chain, so … the administration should be patient and understand that a two-to-three-year window is not realistic for the chipsets and for the assemblies to come back onshore.”

TIA spoke extensively with NTIA and OMB’s Made in America office “about what the telecommunications supply chain industry controls and what it does not control,” said Newman. “We do not control the chip production and where that occurs, and that does amount to 55%.” The industry official is “optimistic that NTIA understands that and any limited waiver will take that into account,” said Newman: Expect that waiver to be “very specific, very detailed.”

‘Plenty of Money’

FBA's Bolton praised Biden administration “grit and determination” to get everyone connected by the end of the decade. States are in “go mode,” and “industry understands that this is it,” said Bolton: “Our one opportunity to get this right.”

“States that did their homework got well rewarded” with BEAD allocations, said the FBA head: States that made their own maps and “leaned into the challenge process” did best. Louisiana has been particularly aggressive, “and even Texas, who had been slow,” passed a law this summer to prioritize fiber, he noted. Mississippi was another “late starter” that “ramped up quickly,” said Bolton. Collaboration among state directors helped some states catch up to others who had been ahead. However, Bolton noted in some states like Rhode Island cable incumbents “have been pushing back against federal funding and the broadband office.”

FBA is most worried about workforce development, said Bolton. “It’s an eligible expense for BEAD,” but states have been more focused on how many locations they have to cover and if they will have enough money to reach them all, said the CEO. FBA is encouraging state broadband directors to ask applicants to identify how many and what type of workers they need “so that we can staff up the community colleges to get people at the right job codes trained for whoever is going to be winning those applications.” With a huge worker shortage already, states need to get workforce development programs in place now, said Bolton.

Another risk is permitting processes causing delays and increasing costs, said Bolton. “We have to find a good balance between protecting the rights of states and local communities” and avoiding “patchwork” approaches to right of way, he said.

Sen. John Hickenlooper, D-Colo., said there’s enough cash to connect everyone (see 2308080067), but state broadband leaders told the conference more money will be needed (see 2308090051). Bolton said there’s “plenty of money to get the job done if we are efficient.” BEAD’s $42 billion alone won’t be enough, but “if you couple this with these other [public funding programs] and private investment and the political will,” he said, it’s possible to achieve 100% access.

The fiber executive countered wireless industry arguments that states can tap fixed wireless to reach people faster and for less money. “When you view this as critical infrastructure,” said Bolton, “there’s no other choice than fiber.” The wireless industry and others see “free money going around” and think they should get their “fair share,” he said. But “this is not about lining the pockets of vendors,” said the FBA president. “This is about connecting people.” What worries Bolton most is that, “as soon as you check a box” and say someone is served by fixed wireless, “you don’t come back” with more public funding.

“This is our best shot yet at bridging the digital divide,” said Kansas broadband office Director Jade Piros de Carvalho on a Mountain Connect panel Wednesday. This time, planning is coming from the grassroots up, and funds aren’t being administered by a federal agency that might not have resources to ensure compliance, she said. “Will we get there 100%? Maybe we won’t, but we’ll get further than we’ve ever got.”