BABA Compliance for BEAD - Funded Broadband Builds: What ISPs Need to Know (and Do)  

March 4, 2026

The Build America, Buy America Act (BABA), enacted within the Infrastructure Investment and Jobs Act (IIJA), reshapes how federally funded infrastructure projects procure materials with broadband networks included. For the $42.45B Broadband Equity Access Deployment (BEAD) Program, BABA is both a policy mandate and a strategic lever to reshore key parts of the broadband supply chain. This guide distills what Internet Service Providers (ISPs) must procure as BABA-compliant for BEAD projects, which categories are waived under NTIA’s limited waiver, how compliance must be documented for states and National Telecommunications and Information Administration (NTIA), and practical steps to avoid procurement and deployment delay

The Three Pillars of BABA As They Apply to BEAD

Under BABA, every item incorporated into an infrastructure project must be classified as iron or steel, construction materials, or manufactured products, and then meet the corresponding domestic preference test. The Office of Management and Budget’s (OMB) final rule (2 CFR Part 184) establishes these standards, and critically for broadband, defines the specific U.S. manufacturing processes required. for optical materials¹.

• Iron and Steel Products: All manufacturing processes, from initial melting through coating must occur in the U.S. where an item is predominantly iron or steel (i.e., greater than 50% component cost)¹.
• Construction Materials: All manufacturing processes must occur in the U.S. For BEAD broadband builds, this includes glass (including optical fiber) and fiber optic cable (including drop cable), with process‑based tests - optical preform fabrication through fiber draw, and for cable - ribboning (if any), buffering, stranding, and jacketing ¹.
• Manufactured Products: Must be manufactured in the U.S. and have greater than 55% U.S. cost of components unless a program‑specific waiver sets different criteria¹.
  

NTIA’s Targeted and Time‑Limited Waiver

To address supply-chain constrains and keep BEAD deployment on schedule, the Department of Commerce, through NTIA, issued a limited, five‑year general non‑availability waiver (effective February 22, 2024, through February 22, 2029) covering specific construction materials and manufactured products used in BEAD-funded projects. The waiver is narrowly scoped, subject to at least annual review, and for certain priority categories requires defined U.S. manufacturing steps rather than full domestic content compliance³.

A. Construction Materials: What Must Be BABA‑Compliant and What is Waived

Must meet BABA U.S. manufacturing-process requirements:

• Optical Glass (including core rods): Must be produced in the U.S. through batching, melting, annealing, cooling, and cutting processes³.
• Optical Fiber: Optical preform fabrication through fiber draw must occur in the U.S¹.
• Fiber‑Optic Cable (including drop): Ribboning (if applicable), buffering, stranding, and jacketing must occur in the U.S. Plastic and polymer inputs are not required to be domestically produced¹.

Treated as minor additions (not required to be U.S.-manufactured:

Connectors and Connectorization of Finished Fiber‑Optic Cable: Considered minor additions after the construction material is produced; they do not need to be manufactured or attached in the U.S³.

Waived within the construction‑materials category:

Non‑Optic‑Glass Inputs to Optical Fiber Preforms (e.g., overclad cylinders): are waived from BABA; all optic‑glass steps still must be U.S.‑based³.

Important BEAD limitation: The Department of Commerce de minimis waiver cannot be applied to optical fiber or fiber‑optic cable in BEAD projects. These materials must fully satisfy the construction‑material U.S. manufacturing-process requirements above³.

B. Manufactured Products: What Must Be BABA‑Compliant and What is Waived

Must meet BEAD U.S. manufacturing-step requirements (priority electronics category):

• Optical Line Terminals (OLTs) and remote OLTs
• OLT line cards
• Subscriber-facing optical pluggables
• Standalone Optical Network Terminals (ONTs)/Optical Network Units (ONUs)
• Cabinets, Vaults, Pedestals: Integrate subassemblies, install internal components/wiring, seal or waterproof, test, label, and document in the U.S.
• Closure/Terminals: Molded outer shell must be manufactured in the U.S.
• Most other electronics, including routers, switches, radios, antennas, power systems, RF conditioning equipment, and comparable fixed-wireless electronics³.
• Passive optical components such as splitters, mux/demux, taps, filters, attenuators, WDMs³.

For these four categories, the standard greater than 55% domestic content requirement is waived; however, specified U.S. manufacturing steps must occur in the U.S., including Printed Circuit Board (PCB) assembly, software/firmware integration, chassis assembly, final assembly, testing/quality assurance, and packing³.

Must meet full manufactured-product BABA requirements:

Enclosures (cabinets, vaults, pedestals, closures, terminals): Must be manufactured in the U.S., meet the 55% domestic components requirement, and perform specified U.S. manufacturing steps.

Bundled equipment must be evaluated as separate manufactured products³.

Covered by NTIA’s BEAD general non-availability waiver:

Important BEAD limitation: The Department of Commerce de minimis waiver cannot be applied to the four priority electronics categories or to enclosures³.

What ISPs Must Buy as BABA‑Compliant for BEAD Projects (Bill‑of‑Materials View)

Must meet BABA requirements or BEAD-specific U.S. manufacturing-process rules¹˒³:

• Optical glass, optical fiber, and fiber-optic cable (including drop cable): Must satisfy construction-material U.S. manufacturing-process requirements (preform fabrication through fiber draw for fiber; ribboning, buffering, stranding, and jacketing for cable).
• OLTs/rOLTs, OLT line cards, subscriber-facing optical pluggables, and standalone ONTs/ONUs: Must meet BEAD priority electronics U.S. manufacturing-step requirements (domestic content threshold waived; required steps remain mandatory).
• Enclosures (cabinets, vaults, pedestals, closures, terminals): Must be manufactured in the U.S., meet the 55% domestic components requirement, and perform specified U.S. manufacturing steps.
• Iron and steel products: Must meet the full U.S. melt-to-coat requirement.
• Most other electronics, including routers, switches, optical amplifiers, power systems, radios, antennas, and RF conditioning equipment.
• Passive optical components (e.g., splitters, mux/demux, taps, filters, attenuators, WDMs).
• Non-optic-glass inputs to optical fiber preforms (e.g., overclad cylinders).
• Connectors and connectorization of finished fiber-optic cable, treated as minor additions applied after the construction material is produced.

Covered by NTIA’s BEAD non-availability waiver (not required to be BABA-compliant)³:

Determining BABA Requirements Using Material Percentages and Process Tests

Correctly classifying a broadband component under BABA, including iron/steel product, construction material, or manufactured product determines which domestic preference test applies and whether a BEAD waiver is available. The examples below align with OMB final guidance and NTIA’s BEAD waiver¹˒³.

1) Is it an Iron or Steel Product (>50% iron/steel by component cost)?

Example: Fixed‑wireless tower base assembly: steel plate ($1,000), steel hardware/rods ($600), aluminum rails ($300), fiberglass base ($100).

Total component cost: $2,000; iron/steel: $1,600 (80%).

Conclusion: The item is an iron/steel product; all melting/forming/coating must occur in the U.S¹.

2) Manufactured Product and the 55% Domestic Content Rule

Example: Outdoor network cabinet U.S. housing ($1,200), U.S. trays ($200), imported fan ($500), imported fasteners ($100).

Total: $2,000; U.S. component share: $1,400 (70%).

Conclusion: Meets the manufactured‑product content test if manufactured in the U.S.; for BEAD enclosures, additional U.S. process steps also apply^1,3.

3) OLT Line Card (BEAD special category with U.S. process steps, no 55% test)

Example: OLT line card U.S. PCB assembly ($300), foreign optical modules ($500), foreign ASIC/CPU ($200), U.S. chassis frame ($50).

Total: $1,050; U.S. component share ~33%.

Conclusion: Despite <55% domestic content, it is compliant for BEAD if all required U.S. steps (PCB assembly, software/firmware, testing, packaging) occur in the U.S³.

4) Construction Material Process Test for Fiber‑Optic Cable (no percentage test)

Example: Fiber‑optic cable process map preform (U.S.), draw (U.S.), buffering (U.S.), stranding (Mexico), jacketing (U.S.).

Conclusion: Fails, because a required process (stranding) occurred outside the U.S. Fiber cable is not waived; only certain non‑optic‑glass inputs are waived^1,3.

5) Combined ONT/Router Devices (waived) vs. Standalone ONTs/ONUs (U.S. steps required)

Example: Combined ONT + Wi‑Fi router with 85% foreign content: Allowed under BEAD’s waiver for combined devices. But you cannot disable routing to treat it as a standalone ONT; standalone ONTs/ONUs must meet the U.S. manufacturing‑step tests³.

Understanding the Department of Commerce De Minimis Waiver and How the Waived Amount Is Determined

The Department of Commerce public-interest de minimis waiver allows limited amounts of foreign‑origin BABA-covered materials to be incorporated into federally funded infrastructure projects without requiring an individual waiver. The intent is to avoid undue burden for low-value incidental components and prevent project delays. The waiver applies unless a program, such as BEAD, expressly excludes certain categories^2,3,4.

What the De Minimis Waiver Allows

The waiver permits use of low‑value foreign minor hardware and incidental materials (e.g., fasteners, clamps, small brackets), counted against a single project‑level de minimis cost cap^2,3,4.

These materials are tracked collectively at the project level, not by vendor or individual item.

What It Cannot Be Applied To in BEAD

Under the BEAD BABA waiver, de minimis treatment cannot be applied to the following major network components ³:

• Optical fiber or fiber‑optic cable
• OLTs and remote OLTs
• OLT line cards
• Subscriber‑facing optical pluggables
• Standalone ONTs/ONUs
• Enclosures (cabinets, pedestals, closures, terminals, vaults)
• 5% of applicable BABA-covered material costs, or
• $1,000,000
• Iron and steel products
• Construction materials
• Manufactured products
• Sum all iron/steel, construction-material, and manufactured-product costs.
• Multiply applicable costs by 5%.
• The lower value becomes the project’s de minimis allowance.
• Maintain a project-level tracker of de minimis usage².
• Total project cost: $10,000,000
• Applicable BABA-covered material costs: $3,000,000
• Total project cost: $50,000,000
• Applicable BABA-covered material costs: $30,000,000
• Manufacturer BABA certification letters for items requiring U.S. production or manufacturing steps.
• Use of NTIA’s public self-certification list (products certified under 18 U.S.C. §1001)
• Semiannual reporting of finished waived electronics using NTIA’s template.

These items must meet their applicable BABA or BEAD manufacturing requirements and are not eligible for de minimis inclusion.

How the De Minimis Allowable Amount is Calculated

The allowable amount is determined at the project level by comparing the value of eligible foreign-origin covered materials to the total BABA-covered material costs⁴.

The maximum allowable foreign-origin amount is the lower of:

What Counts as “Applicable Project Costs”?

Only the costs of materials incorporated into the project that fall under BABA categories:

Labor, services, and non-covered costs are excluded.

Step-by-Step De Minimis Calculation

Step 1: Identify applicable BABA-covered material costs

Step 2: Calculate 5% threshold

Step 3: Compare with $1,000,000 cap

Step 4: Track eligible foreign-origin items

Examples

Example 1: Mid-Size Project

5% of $3,000,000 = $150,000

Compare: $150,000 vs. $1,000,000 g $150,000 allowable

Result: Up to $150,000 of eligible foreign origin covered materials may be incorporated under de minimis.

Example 2: Large Project

5% of $30,000,000 = $1,500,000

Compare: $1,500,000 vs. $1,000,000 g $1,000,000 allowable

Result: Up to $1,000,000 of eligible foreign origin covered materials may be incorporated.

How ISPs Demonstrate BABA Compliance for BEAD

NTIA’s BEAD framework relies on manufacturer attestations and ISP (subrecipient) documentation and reporting. Key elements include^2,3:

States administering BEAD may impose additional documentation or verification requirements.

Five Best Practices for ISPs to Ensure Smooth BABA Compliance

1. Segment the BOM by BABA category early (iron/steel; construction materials; manufactured products), and label items as “U.S. process required,” “waived,” or “iron/steel”^1,3.
2. Source from NTIA’s self‑certified manufacturers and require certification letters detailing U.S. manufacturing locations and steps^2,3.
3. Lock in U.S. manufacturing capacity contractually (milestone‑based POs, audit rights) for BEAD priority electronics and enclosures ³.
4. Maintain the waived-electronics reporting tracker aligned to NTIA categories and HS‑10 codes; capture country of origin per 19 CFR Part 134².
5. Embed BABA flow-down clauses in all procurements and train receiving staff to collect certifications at delivery and store items separately from non-BABA compliant items².

BABA Nuances and Common BEAD Pitfalls

• Integrate ONT/gateway devices are waived, but standalone ONTs/ONUs must meet U.S. manufacturing-step requirements³.
• Enclosures must be evaluated separately from bundled cable or passive components³.
• International trade agreements generally do not apply to federal financial assistance; however, some states may require additional waivers of state obligations^1,3.
• China‑origin restrictions in IIJA §60102(g) apply independently of BABA and must be screened separately³.
• BOM categorized by BABA type (iron/steel; construction materials; manufactured products)¹.
• Fiber manufacturing chain (glass g preform g fiber draw; cable ribbon/buffer/strand/jacket) tied to U.S. locations^1,3.
• BEAD priority electronics categories: manufacturer certification letters documenting required U.S. steps³.
• Enclosures: 55% domestic component calculation and U.S. manufacturing-step evidence³.
• Contracts include flow‑down clauses; receiving SOP collects certifications².
• Waived‑electronics tracker populated (manufacturer, HS‑10, SKU, function, country of origin, quantity) for semiannual reporting².

BRAD BABA “Go/No‑Go” Checklist for ISPs

NTIA Bead BABA Reporting

Sub Recipient Tracker (For Finished Waived Electronics)²

References

¹ Office of Management and Budget

OMB/CRS Overview of BABA & 2 CFR Part 184 and 200

² Department of Commerce

NTIA Build America, Buy America Compliance & Documentation Requirements

³ Department of Commerce

BEAD BABA Waiver

⁴ Department of Commerce

De Minimis Waiver

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