The new infrastructure law is leading to increased demand for fiber optic cable to increase high speed Internet access, and Buy America preferences in that law mean the cable will be manufactured domestically.
Corning announced on Tuesday that it is planning to build a new factory in Arizona to make fiber optic cable that will help expand high-speed Internet access across the country.
The news is just the latest big manufacturing announcement made this week; solar panel manufacturer First Solar also announced it will spend up to $1.2 billion to expand its manufacturing footprint in the United States. Meanwhile, automaker Honda is looking to team up with battery manufacturer LG to build a new electric vehicle battery factory, likely in Ohio.
These are the sort of major investments the United States has needed to put in place for decades, and it’s happening now because both lawmakers and the Biden administration are finally beginning to prioritize industrial policy. First Solar Chief Executive Mark Widmar specifically cited incentives in the recently passed Inflation Reduction Act as a reason why the company is investing heavily in U.S. production, for example.
But there’s another policy that led Corning to build a brand new facility in Arizona: Buy America.
There’s big demand for fiber optic cable right now because Congress allocated $42.5 billion in the 2021 bipartisan infrastructure investment package to provide grant money to states to expand their broadband infrastructure. Up to 18 million U.S. household lack access to high-speed Internet, Reuters reported.
And Congress specifically made sure to include Buy America preferences in the infrastructure bill, meaning that American manufacturers and workers get the first shot at the taxpayer-funded contracts to make all the fiber optic cable needed to expand Internet access.
That incentivized Corning to build the new factory so it could be better positioned to compete for all of those impending government contracts. Indeed, the company said it has spent $500 million since 2020 to ramp up its domestic production capabilities.
Commerce Secretary Gina Raimondo, who was expected to attend an official event in Arizona on Tuesday announcing the new facility, told Reuters that the announcement shows the Biden administration is “serious about Buy America — as much as can be made in America should be made in America.”
The Corning announcement is proof that Buy America preferences do spur the kind of investments the United States needs to make in the 21st century.
It’s easy to see the benefits of all this new production, too. While Corning already has a fiber optic cable factory in North Carolina, the Arizona factory “will be the industry’s western-most U.S. manufacturing site for optical cable – allowing Corning to serve growing demand in the western U.S. and Canada,” according to Corning.
The new facility is expected to create 250 direct jobs; the entire industry is likely to create 850,000 new jobs in the coming years to lay all that new cable, Corning said.
All of this is important for the economy, and certainly will benefit the tens of millions of Americans who finally will have high speed Internet access. But it’s also an issue of national security, which is one of the reasons why Congress specified that Buy America would apply to fiber optic cable in the infrastructure bill.
As it has in other sectors like steel and aluminum, China is driving massive global overcapacity when it comes to fiber optic cables. Not only is that a big threat to America’s own production capabilities, it also presents a number of security risks.
Nazak Nikakhtar, former assistant secretary for industry and analysis at the Commerce Department, put it this way: “The danger here is that the country that controls the fiber cable is the country that dictates who can access them, so controls all global communication.”
That’s a warning that the Biden administration must take to heart. While officials are saying all the right sorts of things today, there already have been calls for the administration to issue waivers for Buy America for fiber optic cable. An official from the USTelecom Association told Axios on Tuesday that while “we all agree that we should aspire to a ‘buy American’ axiom… In practical terms, in the broadband sector, the number of suppliers is highly limited.”
The Biden administration must not fall for this nonsense.
Back in February, AAM President Scott Paul submitted official comments to the National Telecommunications and Information Administration (NTIA) at the Commerce Department on implementation of the infrastructure law when it comes to broadband, writing that the United States “has a once-in-a-generation opportunity to take concrete steps to strengthen supply chains while building out broadband infrastructure… the NTIA should use caution when reviewing comments of those who
have profited from a business model of offshoring broadband equipment production to China or other countries.”
“Suggesting that a current lack of U.S. production capacity is reason enough to jettison the application of the entire Buy America policy, or to waive entire categories of products, is shortsighted, dangerous, and in conflict with the requirements imposed by Congress and the expectations of the American taxpayer. Congress has provided ample tools and flexibility to establish a workable Buy America policy that recognizes today’s U.S. production capacity while also maintaining market incentives that will spur future manufacturing investments that strengthen the U.S. industrial base, supply chains, and workforce.”
The United States is indeed at a historic moment. We truly have a once-in-a-generation opportunity to put an industrial policy in place that will see increased domestic production of the things our country will need to succeed in the 21st century, from fiber optic cables to solar panels to wind turbines to electric vehicles and batteries.
Corning’s announcement on Tuesday is proof that Buy America can incentivize domestic production in strategic sectors. Now it’s up to the Biden administration to make good on its Buy America promises, enforce these important provisions, and ensure our high speed Internet future is truly Made in America.