Biden Broadband Plan Runs Headlong Into 'Buy American' Mandate (bloomberg.com) 89
President Joe Biden made clear in his State of the Union address last month that as the US spends billions of dollars on new broadband connections, "we're going to buy American." But that aspiration is easier said than done. From a report: While there seems to be enough domestic fiber optic cable to connect communities, the electronic components such as routers that transform glass strands into data highways are made mainly in other countries. Cable providers, chip makers and wireless carriers are pleading for relief from the requirement to "buy American," saying they can't build new networks without foreign electronics. Otherwise the broadband buildup that Biden has set as a priority will be delayed by years as domestic sources are developed. "Everybody's sorting this out," said Michael Romano, executive vice president of NTCA-The Rural Broadband Association, a trade group. "It's not clear there's much, if any, American equipment that would satisfy Build America Buy America as it stands today." The Build America Buy America Act was enacted as part of the Infrastructure Investment and Jobs Act in 2021, and requires any infrastructure projects to use domestically sourced materials in order to receive federal assistance. That applies to the $42.5 billion Broadband Equity, Access and Deployment Program (BEAD), the flagship Biden initiative for building new networks to connect the 30 million Americans the administration estimates are without fast internet service.
Time to be pragmatic, then (Score:5, Interesting)
Seems like the optimal solution would be to grant a temporary exemption to the Buy American clause with a phase-out schedule that would both taper the INSTALLED hardware requirements (least they buy all their equipment up front and warehouse it) while buying time for local manufacturing to ramp up.
Or maybe these companies can eat the cost for the infrastructure themselves considering how much they've fleeced the taxpayers for past infrastructure that never materialized...
=Smidge=
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"Made in the USA! It matters!" From a 1980s campaign when job offshoring stated to take off.
Thank Saint Reagan!!!
Re:Time to be pragmatic, then (Score:4, Interesting)
Pragmatic is when businesses see dollar bills wafted in front of their face, they do what's required to take those dollars and put them in their pocket. Manufacturing businesses build capacity and produce the goods which get them the money.
A "phase out" would only prolong the change which the law is incenting.
TL;DR: Want the money now? Build the factory now.
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Yeah, I see this as a MAJOR opportunity for some enterprising folks to get this going here quickly and make a FORTUNE.
Do we still have any enterprising Americans here willing to work and take some risk for a big payoff....or, is that old fashioned?
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Care to elaborate?
I've not heard of this one...how exactly do they do that?
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A Banker. And a Banker always wants more ROI.
Because that is how HE gets more.
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Funny, when I was W2, I directed what funds and investments my 401K went to....
And of course as a 1099 contractor I fully decide where EVERYTHING goes for retirement.
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Pragmatic is when customers see dollar bills not wafting out of their wallets and make decisions accordingly. Businesses try all sorts of things to "differentiate their product" but with few exceptions "does the job acceptably at the lowest price" is what people choose.
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> TL;DR: Want the money now? Build the factory now.
This isn't a real-time strategy game. It takes more than a minute or two to build a factory.
So "now" is something like 3 to 5 years... after you've found a site, done the design and layout work, and gotten regulatory approval. Once you break ground though; 3 to 5 years. Let's not even get into the billions of dollars it would take.
It MIGHT be faster to get an existing foundry to make the chips you need, but that's still a lot of tooling and will come at
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Or even better - a waiver for purchasing products from companies that are going to build manufacturing facilities here, with an ironclad clawback if they don't.
Buy the products now with the promise of being able to buy USA later, while incentivizing these manufacturers to start building stuff here if they want to be included in the billions of dollars of equipment purchases.
There is already a permanent exception (Score:4, Informative)
The current Buy American Acts has two parts: a threshold for considering a product to be American made and a price preference given to American-made products. That means that if there are no available American-made products, then foreign products are allowed. In fact, even if American-made products are available, if those products are still more expensive even after considering the price preference, then the foreign product can still be allowed [federalregister.gov]: "The Buy American statute does not prohibit the purchase of foreign end products or use of foreign construction material. Instead, it encourages the use of domestic end products and construction material by imposing a price preference for them. Under the current FAR, large businesses offering domestic supplies receive a 20 percent price preference, and small businesses receive a 30 percent price preference."
What Biden did was to increase the threshold for considering a product to be American made from 55% to 75% domestic content.
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Out of mod-points for the day, but you nailed it.
The article / summary is hyperbole.
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The problem is they want to buy cutting edge tech to keep American at the forefront, but the tech is invented in other countries and it takes time before it gets into standards and available to licence.
So they can choose between always being a few years behind on the tech, or having a permanent exemption, or getting US companies to invest more in R&D so they can be the ones inventing the tech.
As an example, last week Huawei demonstrated a 50Gbps over passive fibre consumer router and matching last mile
Starlink (Score:2)
I think they explicitly excluded satellite providers. Otherwise Starlink would be grabbing a ton of this money, as their terminals are all made in America (as are the satellites). Or at least they're assembled in America. The chips are likely from TSMC, and the circuit boards are likely also from Asia.
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I don't think that Starlink qualified for federal broadband subsidies, mostly because their broadband speeds do not consistently meet the speed thresholds to qualify as "broadband". Their normal speeds do, but not what people have been seeing during peak usage periods while they continue to struggle with subscriber growing pains.
A modest proposal (Score:5, Insightful)
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Remember all that "world is flat" crap from the big swingin' dick free traders who called everybody who opposed farming out American manufacturing "socialists" and "protectionists"?
That sound you're hearing is chickens coming home to roost.
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Actually, I don't remember those screams. I can't seem to find those screams via search engine, either.
https://duckduckgo.com/?t=ftsa... [duckduckgo.com]
Citation? Help my memory please?
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Actually, I don't remember those screams. I can't seem to find those screams via search engine, either. https://duckduckgo.com/?t=ftsa... [duckduckgo.com]
Citation? Help my memory please?
Here you go: https://inthesetimes.com/artic... [inthesetimes.com]
Took exactly 2 seconds with google.
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Took 2 seconds to find a single article from a pretty slanted source. "All the leftist screams" would have to look more like 20+ articles on CNN, MSNBC, NYT, WaPo, etc.. over a period of time. If you want a reference for "all the XX screams," google Hunter Biden. That's about the threshold for being able to call something "all the XX screams."
The real proof is in the pudding. If Democrats were really pro free-trade and anti-tariff, Biden would have rescinded the tariffs when he first got in office. He didn'
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Took 2 seconds to find a single article from a pretty slanted source. "All the leftist screams" would have to look more like 20+ articles on CNN, MSNBC, NYT, WaPo, etc.. over a period of time. If you want a reference for "all the XX screams," google Hunter Biden. That's about the threshold for being able to call something "all the XX screams."
You wanted proof, implying there is none, I provided proof, now you say it's not enough. Not gonna play the game when I heap more and more proof and you keep claiming it's not enough.
The real proof is in the pudding. If Democrats were really pro free-trade and anti-tariff, Biden would have rescinded the tariffs when he first got in office. He didn't.
Yeah, you know what it's called when at first, when "other guys" do something you decry it as evil/racist/xenophobic/whatnot, and then, once you get in power you keep doing it, without having even the basic bit of courtesy to admit the other guys were right all along and apologising? Fucking hypocrisy.
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You're either a liar or a drooling moron. You might manage to find one or two so-called "leftist screams", probably reported by one of the right wing media's most ridiculous shit factories. Beyond that, you've got nothing.
You're an jackass or, in Canadian terms, a goof. We call guys that when we want to find out if they've got enough balls to step outside. Guys like you never do.
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I figured I'd better speak in terms you would understand. I guess it worked.
Now fuck off. There's adults here, and you don't belong.
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Bring domestic manufacturing back and stop outsourcing
It's about people voting with their wallets. The problem is domestic manufacturing is so much more expensive.
I went to buy a wrench. I had the choice of the cheap one 1.5 euros made in China, the branded one 4 euros (still made in China), and a "made in Europe" option one with an awesome design, but for 28 euros. How many normal people will go for the domestic brand that is 18x more expensive?
Another occasion, I purchased a vacuum cleaner. There were cheap ones at 50 euros. The "made in Europe" one was the
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A one off project that. Get the cheap tool. Something I will keep using, spend the money on the good tool.
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Yeah, but are you willing to pay double for either one because it's got your national flag on the packaging?
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Yuck.
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I rather spend 20x on a tool that I know will last 100x longer than some Chinese piece of shit.
You keep buying a cheap tool each and every time is breaks, and if you use it enough, you will end up paying more than me in the long run.
Re: A modest proposal (Score:2)
If it lasts more than twice as long sure. Not sure I would trust made in America on such a metric though
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The idea behind trade is that it's a positive sum game because different places have different conditions and specialties that let them do different things most effectively. If you've got copper and the other guy has tin you can trade and make bronze. If some Germans did a lot of stuff with mirrors and lenses, some Dutch guys got good at putting together optics and lasers to make really small patterns, and some Taiwanese were good at process optimization, they could trade and everybody could have chips. It'
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So based on your observations, we must ask: How did our ancestors survive when everything they bought was locally manufactured expensive stuff? Some thoughts off the top of my head, maybe some are right and some are wrong:
1. Domestic manufacturing will put money back in people's pockets, so it won't actually be more expensive in the long run.
2. They didn't buy as much stuff.
3. The items they purchased were quality and lasted a long time, so over time it wasn't actually expensive.
4. Maybe it's impossible to
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How did our ancestors survive when everything they bought was locally manufactured expensive stuff?
They survived by doing things by themselves (growing food, building homes, sewing clothes), by having much lower standards (no food quality control, no Building Code, poor home heating, poor night lighting) and by having shorter lifespans. The 20th Century was a turning point in the Western world, where the middle class started enjoying a relatively effortless life of food abundance, accessible technology, unprecedented comfort. What we complain about right now (inflation, expensive food, expensive housing)
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You make it sound like the last time we manufactured things in this country was the 1800s. If you open up a newspaper from the 1960s, you will find the vast majority of advertisements are for domestically made goods.
That the Star Trek communicator they currently have in their pockets is now reserved to a higher class of privileged people?
I think it is more like: They can't buy a new Star Trek communicator every year or 2. They need to buy it every 3 to 5 years.
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How did our ancestors survive when everything they bought was locally manufactured expensive stuff?
Simple, it was not really expensive at the time:
1. In not so distant history, slavery helped a lot to provide cheap labor
2. In Europe, a lot of the working class between AD 1 and AD 1800 were really poor, and were basically working their asses off for the kings/nobles. A different form of slavery
3. Except from the 0.1% at the time, the rest of the population was not buying/using a lot of expensive stuff... They were barely surviving (life expectancy between 1500-1800 was 30-40 years old for the general popu
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Hold'up -- we aren't talking about going back to the 1800s. We are talking about going back to the 1980s. I think we can manufacture goods without requiring slavery. And it really wasn't that expensive -- in 1963, 98% of households had a TV [wlu.edu].
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That's a fair point, that I may have adressed too quickly in my initial post.
It relates to that part:
We first removed slavery in our countries through being able to use machines and a lot of energy needed by them (coal, petrol, gas...).
That's one way (not pretty for humanity I guess) to interpret how/why we eradicated slavery. Because we could use machines instead, as we had suddenly access to so much energy (oil, coal...). A machine is also more efficient than a human being, it doesn't sleep, it doesn't riot, it doesn't complain...
Another thing is that in 1980, and even more between 1950-1980, environmental laws were very lax. The more co
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I can agree with all of that. Permit me to zoom in on a key point you made.
Another other thing, is that in 1980, a TV set was more expensive than what it is today.
Part of our issue is that we are now in a period of overconsumption. People buy new TV sets every few years, and new phones every few years. I think that is excessive. I suspect that if prices go up, it means that people will spend the same amount of money as they do today, but they might hold that HD TV for a few years longer before upgrading to the 4K TV. That's not a bad place to be in.
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Speaking as the owner of a US based manufacturing concern, this is purely because of market targeting.
With Chinese wages where they are now (about $4-5/hr for factory workers), the lower productivity of Chinese workers (about 70% of US productivity/worker is as good as can be managed over there), and the tariffs, We can make the cheap wrench just as easily and cheaply in the US.
You're not going to get the $28 wrench for $1.5. You're going to still get the $1.5 wrench, but it will be a $1.5 US made wrench.
I'
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It's a two-way street.
If the USA wants to "buy American", other countries that would like to sell to the USA may demand that they require you to "allow foreign" before they, themselves, will "buy American"
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There is no blanket requirement that any contractor, company, or individual buy US made products.
The Buy American clause only applies if you are getting government funding. If you are spending US Taxpayer dollars you are required to spend some percentage of it back into the US economy. The purpose is twofold: Keep the money inside the US economy to maximize the benefit of the spending, and create domestic demand that helps establish and bolster US manufacturing.
You can spend your own money however you want,
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Re: A modest proposal (Score:3)
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And there's no need to starve population - you can keep trading food with them, just embargo the technology.
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TFA is paywalled but the foreign chips in question are more likely made in Taiwan. Weakening Taiwan because you are mad at Xi Jinping doesn't make a lot of sense.
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It's a nice idea but it won't be cheap. If we are serious about doing it then we need to invest heavily. In the US, that can be rather inefficient as it requires getting private companies to invest via things like tax incentives that are often abused.
It's a difficult proposition because for a very long time those supply chains are going to be slower and more expensive than the Chinese ones. Worse still, they can't really be used until a whole load of companies have their bits up-and-running. You can't make
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Trying to understand what you're saying. You mean some kind of US-only network accessible only from the United States?
Not sure if that's a good long term idea. But maybe Balkanization is inevitable?
Some don't want broadband (Score:1)
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I think you would be fairly hard pressed to find very many towns or larger (so not counting "off the grid" communes etc) where over half the people "don't want broadband".
If you excluded individuals over 60 years old (who didn't have the internet while growing up but most of whom will be dying off in the next 30 years) and under 8 years old (most of whom probably don't yet really know what "broadband" is and think the tablet just "works" through some mysterious force but will almost certainly "want" it once
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"If you excluded individuals over 60 years old (who didn't have the internet while growing up but most of whom will be dying off in the next 30 years)"
Oh, ha ha ha ha ha! I'm 75, and am in communications with a good portion of my class of 1965 who also have internet and exchange information practically on a daily basis on Facebook. I've got 300 MB/s on Spectrum, and am using it for PC as well as streaming.
No, we don't sit on the porch and watch the traffic go by to the exclusion of all else...
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Yeah, I have a concept of not having TV, too...
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In what region of your mind do such people exist?
Don't want broadband, don't buy it. Don't want cell service, don't buy it or turn off your phone.
Re: Some don't want broadband (Score:2)
But even if you don't have a cell phone, the 5G towers will still give you COVID.
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made here (Score:3)
The biggest component is already made here - the dollars to buy the gear. If we value the dollars more than the gear then stop making the trade, otherwise feel free to hand over what is effectively a piece of paper to a country that is willing to put its people and environment through the strain necessary to make the actual equipment and is willing to invest in factories to make the stuff.
Sometimes buying stuff from abroad is just a good deal for us and we should be grateful
This is just a stupid article (Score:1)
This is for Federal 'Assistance'. (Score:3)
The pragmatic solution is to separate the two (Score:3)
Passive infrastructure, which is expensive and can be built with American resources, gets the pork. The electronics, which are cheap and not available domestically, get split out into a separate project or even a separate company. There you go, pragmatism.
I don't understand the problem. (Score:2)
If American produces the need, use American products. If they don't, don't. Let it slide. Move on with your lives. Keep the spirit, work around the details. Most mandates would fail if you insisted on strict and perfect adherence to them, even when doing so will grind things to a halt.
Apply the reasonable person test to it. If American companies can't provide you with the fibre you need to succeed, go elsewhere, but ensure that the following statement would be viewed as sound by a reasonable person.
"I did m
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In other nations, esp. in the west, they have worked hard to bring in manufacturing as well as making sure that their own governments buy locally made. It is insane that we do not do this. The golden gate bridge replacement in California was made in CHina. It was to cost a great deal less. They put it up and then had NUMEROUS QC issues. Turned out that it costs double what it would have, had they gone with the AMerican made AND would have been of top quality from the gitgo.
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You mean the bay bridge. Golden gate bridge remains american steel.
Re: I don't understand the problem. (Score:2)
Tweet from Captain Obvious... (Score:2)
This might be evidence that outsourcing is indeed a risk to national security. Just because some corporate executives want bigger bonuses, that's no excuse for laying off American middle class workers, shuttering American plants, and moving production into an enemy country.
During the Cold War, American tech firms were not allowed to export this tech work into China so they did not do it - and the American economy did just fine. None of the restrictions prevented the tech boom of the 1980s. Competative press
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Pretty Easy Solution (Score:1)
Nuke the 16th Amendment and the income taxes which are a millstone around the necks of American Manufacturers. With these taxes gone, the USA would be the newest, bestest tax haven on the planet, and these foreign manufacturers would injure themselves in the stampede to build factories in the USA to make these products in a tax-free environment.
What to raise revenue with? Its called the FairTax, and taxes consumption, specifically new luxury items for sale at retail and services. A mechanism called th
Takes time and money (Score:5, Insightful)
I own a US based electronics company. We have two product lines. One that has been built in the US since the start (2020) and another that's made in China.
We have plenty of workers. They cost a bit more than workers in China, but the difference isn't that much once you compare productivity (higher in the US).
The biggest difference is financing. Forget equity, US investors are so focused on the latest shiny SaaS/AI/(until recently) crypto thing that it's very hard to raise money for a factory. Banks are a little better, since they understand what a factory is and like capital assets. But, the interest rates are currently pretty punishing and they want you to have cash-flow to cover the loan before you have the factory and also want sizable down payments.
I've bootstrapped this business over the last 6 years and am finally at the point where I'll be able to On-shore the China made product. Including the tariffs, my current model actually has the US production ending up slightly cheaper than making it in China.
Want US manufacturing to come back? Give us subsidized financing to build factories. The chip makers are getting it, which I applaud, but none of the other pieces of the electronics supply chain are.
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Even if we manufacture chips here, it will not help when the final assemble is done in CHina and they will push for companies to buy ONLY Chinese made parts.
We see states doing such things as wasting money on homes for the 'homeless' ( very few are homeless; A much larger numer are psych patients that are not getting treatments, while 2/3 OR MORE of them are out and out druggies ). Instead, they would be better off helping small start-ups with factories. Any by that, I mean, have cities buy an old
This would be a HORRIBLE mistake (Score:2)
SO, NOW is the time to put pressure on the installers to put pressure on electronic manufacturers to bring manufacturing BACK.
Note that while this is about buy American, this is not going to harm our allies. Nearly all of this had been moved to China. That is why is must be brought back.
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"The whole idea of buy America is to FORCE American manufacturers to bring it back."
Why stop there? Incentivize foreign manufacturers to pull up stakes and build factories here. How? Nuke the income taxes completely - personal, corporate, capital gains, estate, gift, self employment, alternative minimum, etc. It creates a tax-free manufacturing environment that they would stampede to get here for. Its called the FairTax.
Gotta love the rhetoric!!! (Score:2)
Don't you just love how, regardless of political party, the message is the same! Buy American! American First! Export controls on China. Tariffs on China.
But sure, there is REALLY a difference between the parties. Let's just keep telling ourselves that. If only "MY" party was in charge, then it would be perfect. Then when "MY" party doesn't fulfill it's promises, it's the "OTHER" party blocking the progress.
Gonna build the wall! Dirty Democrats stopped us. Gonna pay off your student debt. Dirty Republicans
deep thought (Score:2)
I'm sure Biden thoroughly considered all requirements and ramifications of his plan. This was all fully expected. Just ask them.