One of the telecom industry’s concerns about the massive amount of federal Infrastructure Act dollars that are poised to pour into the market to close the digital divide over the next few years, has been associated requirements on buying American-made products for use in those broadband deployments, especially for chips and associated electronics.
Today, Nokia announced that it is on-shoring fiber-related electronics manufacturing and will produce a number of items needed for fiber deployment in Kenosha County, Wisconsin, through a partnership with local manufacturer Sanmina, thus making those products eligible to support projects that fall under the Broadband Equity, Access and Deployment (BEAD) program that will distribute more than $42 billion dollars to U.S. states and territories for digital infrastructure.
Manufacturing of Nokia’s electronics for fiberoptic broadband at the Sanmina Pleasant Prairie facility will start in 2024, which company officials and Commerce Department officials said should be right on time for use in BEAD-funded projects.
State and territory funding allocations from BEAD were announced in late June. Now, states and territories must submit their five-year plans to the National Telecommunications and Information Administration (NTIA) to describe how they will use that funding to close the digital divide in their respective geographies. Each participating state was guaranteed at least $100 million in BEAD funding, as part of the Infrastructure, Investment and Jobs Act (IIJA) that became law in 2021 (See the state-level breakdowns here). Nineteen states will end up with more than $1 billion through BEAD for high-speed broadband deployment, with the stated requirement to connect every American by 2030.
After the state programs are approved, states can get access to the first 20% of their funding. Then states and territories actually make deployment awards, plus some additional time will be needed for individual project permitting and preparation, so availability of the domestic fiber electronics from Nokia and Sanmina in 2024 will be in line with meeting BEAD timelines, officials from both companies and the Commerce Department said in an interview.
With so much money available across the country for what is expected to be fiber-heavy deployments, industry players have expressed concern about whether there will be enough workers and enough fiber and related hardware and electronics to actually complete the work in the timeframe that the government expects — and to meet the law’s requirements for domestic materials.
The domestic manufacturing of Nokia’s fiber electronics will bring up to 200 new jobs to Wisconsin, the partners said. Sanmina has been a partner of Nokia’s for 27 years, said Charlie Mason, EVP of global sales for Sanmina. “It’s a continuation of a very long, well-established partnership,” he said. Sanmina was founded in the U.S. more than 40 years ago and has around 20 factories located around the country in eight states. The Kenosha location has been in operation for about 24 years, he said, adding that the “ability to bring additional jobs to this region, to this plant, is really exciting for us.”
Domestic products of Nokia’s fiberoptics electronics solutions offerings is particularly important; the company claims that its products support 70% of fiber broadband lines in North America. Lori Adams, vice president of broadband policy and funding strategy at Nokia, said that the three products which will be manufactured by Sanmina are an optical line termination (OLT) card for a modular access node; a small form-factor OLT and an outdoor, hardened optical network terminal (ONT). Nokia also has plans for domestic manufacturing of OLT optical modules elsewhere in the U.S., which it will announce at a later time.
While the primary goal of the Internet for All program is to connect the unserved and the underserved, it is also a jobs and manufacturing program, according to a Commerce Department official, and investments in the Internet for All initiatives are an opportunity for to promote U.S. domestic manufacturing. The official said that the Commerce Department have been engaging directly with manufacturers, suppliers and other stakeholders to hear the ideas on how to maximizing the opportunity presented by the billions in funding. The bipartisan infrastructure bill contained the Build America, Buy America Act and in the context of the BEAD program, it requires that the construction materials and manufactured products that are procured using federal taxpayer dollars are American-made products. Fiber producers Corning, CommScope and Prysmian, for example, have increased domestic production capacity for fiber that can be used for BEAD deployments. The Commerce official said that the Nokia’s announcement marks for the first time an announcement by a manufacturer around broadband electronics, and that Nokia is the number one provider of these types of products to internet service providers in the U.S.
The announcement and its implications for BEAD are significant enough, in fact, that Vice President Kamala Harris as well as Commerce Secretary Gina Raimondo will be on-hand for an event this afternoon at the Sanmina facility, to highlight the new fiber electronics manufacturing partnership with Nokia.
The Commerce official also said that based on its conversations with Nokia and Sanmina, that enough of the necessary products can be made to meet the demand of the BEAD program, but that the department is working toward having multiple domestic options available at scale. Even with the efforts that the Commerce Department is making in partnership with industry to make sure that sufficient domestic supply of materials and components will be available to support BEAD projects, it is expected that there will some products where a waiver will be required, and the Commerce departments expects to put out guidance for BEAD and a limited availability waiver yet this summer.
