[DZS NEWS] DZS to Acquire Subscriber Access Technology Leader NetComm

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There is little doubt that the $42.5B earmarked for closing the digital divide in the U.S. contributed to the record attendance at Fiber Connect 2023. That said, a particular aspect of this unprecedented swing for the fences in bringing world-class connectivity to the unserved and underserved homes around America created a lot of buzz around the halls of the Gaylord Palms in Orlando – the prospect of a “Build America, Buy America” (BABA) waiver. Speculation about what the BABA waiver might look like ran rampant until Tuesday morning of the event (August 22) when the proposal was released, followed by NTIA leader Will Arbuckle’s presentation and Q&A on the last day of the event (August 23) when he was able to prove some further clarifications.

Vendors in particular were very interested as their ability to sell to potential awardees would be predicated on their ability to meet the proposed requirements. Potential awardees were also very interested in understanding if their current or preferred vendors would be able to meet the requirements or if they would be encouraged to look at new vendors. As it turned out, I think it is safe to say that the proposed waiver was mostly consistent with what most expected, but also with a few surprises that will create opportunities for some vendors and cause potential awardees to open their minds about what vendors they should consider.

There are really 2 documents that outline BABA requirements. The first is the OMB’s final guidance to boost the use of American-made goods in infrastructure projects that was release on August 14, 2023. It set the standards for construction materials while also service as a guide for agencies. The proposed BABA waiver for the BEAD program issued by the Department of Commerce on August 22 clarified the intended direction specifically for BEAD, and will be available for public comment for 30 days after its issuance.

The OMB’s was pretty direct for glass, optical fiber, and fiber optic cable, specifying that all manufacturing processes needed to occur in the United States with the only waiver being for non-optic-glass inputs which are used as an input to the preform manufacturing process of optical fiber.

The Dept. of Commerce proposed waiver however could be summarized by what it did NOT waive to be manufactured in the U.S., specifically 4 categories of electronics:

  • Optical Line Terminals (OLTs)
  • OLT Line Cards
  • Optic Pluggables (installed in OLTs)
  • Optical Network Terminals (ONTs & ONUs)

Equally as important, included was a waiver for the 55% cost of components test that has traditionally been part of the Buy America requirements of historic broadband subsidy programs.

In anticipation of these rules and proposed waivers, some access vendors made some announcements of their intent to move some manufacturing to the U.S. (in some cases back to the U.S.). However, their statements in some cases did not include all of their product portfolios, and made it clear that this transition would be targeting movement in 2024, meaning that U.S. manufactured solutions would not be available until at least mid-year 2024.

This is not the case with DZS which is ready to ship U.S. manufactured OLTs and ONTs NOW. DZS has a multi-decade history of U.S. manufacturing, primarily out of its Seminole, FL manufacturing plant where it produced OLTs and ONTs for the global market. At the start of 2023, DZS began manufacturing OLTs for the North American market, as well as optical transport products, out of its manufacturing partner Fabrinet’s plant in Santa Clara, CA. This means that for service providers planning to apply for BEAD funds, they can begin testing and/or deploying U.S. made OLTs and line cards across the entire range of DZS access products TODAY. DZS also has a large supply of U.S. made ONTs available today, and will be expanding its ONT production across a wider range of premises products in early 2024 at Fabrinet.

DZS believes that it stands today as the ONLY access vendor globally that currently complies with the proposed BABA waiver and encourages service providers planning to leverage BEAD funds to contact us to learn more about how DZS can help you get a jump on not only your BEAD plans, but any other U.S. broadband subsidy programs line the Capital Project Funds, USDA ReConnect Loan & Grant Program, RDOF program, Tribal Broadband Connectivity Programs, Emergency Broadband Benefit Program, and other programs. In addition Middle-Mile Grant Program awardees as well as those planning to leverage any of the above programs for middle-mile transport can use DZS U.S. manufactured Saber optical transport solutions TODAY as well.

DZS has always been a firm believer in the power and value of U.S. manufacturing both from a quality perspective, but also from a convenience and responsiveness perspective for our North American customers. While other vendors pushed most if not all of their manufacturing overseas, DZS maintained a major based of U.S. manufacturing and many of our customers found great value and peace-of-mind because of it. We are wholly supportive of the OMB, Department of Commerce, and NTIA’s efforts in supporting U.S. manufacturing, and are looking forward to making our customers leveraging BEAD and other programs seeking to bridge the digital divide in America successful in meeting their program requirements, as well as being positioned for long-term, sustainable success with powerful DZS solutions. We had a wide range of both prospects and customers at Fiber Connect 2023 reach out to us about our BABA-readiness, and we couldn’t have been prouder to share our history, our plans, and our BABA-readiness today across both Access and Transport solutions.

Our next segment focuses on another hot topic at Fiber Connect 2023 … Middle-Mile and its role in enable future fiber success! Read Part 3: Middle-Mile Becomes a Hot Topic.

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Posted By Geoff Burke

SVP, Marketing

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