Regulation - What is it Good For?

Buy American and Federal Grants

Near the bottom of the Infrastructure Investment and Jobs Act, starting on page 2315, is a requirement that any infrastructure funded from federal funds must comply with the Build America, Buy America Act. This applies to the $42.5 billion in broadband infrastructure included in the IIJA, but also applies to all other infrastructure projects that includes federal funding. The IIJA says as of the date of enactment of this Act, domestic content procurement preference policies apply to all Federal Government procurement and to various Federal-aid infrastructure programs.

I think this clearly means that Buy American rules apply to federal infrastructure projects awarded after November 18, 2021, the date the IIJA was published in the Federal Register. This would include RDOF funding, ReConnect grants, the NTIA grants, and anything else awarded after that date. I’ll have to leave this up to the lawyers, but this also could apply to state and local grants awarded before that date but not yet constructed, such as CARES or ARPA projects.

The concept of buying American has been around since 1933, when the original Buy America Act was passed by Congress that applied specifically to federally-funded projects to build roads and railroads. That specific law was aimed at making sure that railroads used American-made iron and steel for rails, train engines, and railcars.

The Buy America concept was first applied to telecom in the 2009 ARRA stimulus grants. Those grants required that a substantial amount of the raw materials used to build broadband networks complied with the Buy America Act. At that time, it was nearly impossible to buy electronics that complied with the Buy America Act, and I recollect that the NTIA issued a blanket pardon from parts of the Buy America rules (but that’s subject to verification).

This new IIJA legislation puts a major emphasis on buying American. One of the intentions of the Act is to provide incentives for manufacturers to bring factories and jobs back to the U.S. Consider the following language from the IIJA:

United States taxpayer dollars invested in public infrastructure should not be used to reward companies that have moved their operations, investment dollars, and jobs to foreign countries or foreign factories, particularly those that do not share or openly flout the commitments of the United States to environmental, worker, and workplace safety protections; in procuring materials for public works projects, entities using taxpayer-financed Federal assistance should give a commonsense procurement preference for the materials and products produced by companies and workers in the United States in accordance with the high ideals embodied in the environmental, worker, workplace safety, and other regulatory requirements of the United States;

The Act lists specific materials and components that should be sourced to American companies, including steel, iron, manufactured products, non-ferrous metals, plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables), glass (including optic glass), lumber, and drywall.

That list covers almost every component of building a fiber network. Fiber optic glass must be American-made, as must be the material used in fiber-optic sheaths. Conduit must be American-made. The definition of ‘manufactured items’ in the Act covers all electronics.

The IIJA goes on to define the specific rules for defining American-made. Construction materials like fiber optic cable and conduit must be 100% made in the U.S. At least 55% of the cost of the components for manufactured goods must be American-made. This last requirement is going to cause consternation for equipment vendors which are going to somehow disclose the source and what they pay for each component of electronics. In today’s complex supply chain this isn’t going to be easy. This gets even more complex for supply houses that buy and assemble various components into ready-to-use electronics assemblies. This will mean more paperwork for the industry – everybody that builds a project that uses federal funding must be ready to prove they comply with the law.

There are ways for federal agencies to get waivers from these rules – but the legislation makes it clear that waivers need to be exceptions and not routinely or easily granted. The intention of this law is to force vendors to change procurement practices and to buy raw materials and components from American sources. Since the law specifically called out the components of fiber optic networks, it’s not going to be easy to get waivers.

This is likely to cause disruptions in the short run as electronics manufacturers scramble to meet the 55% rule. It’s not hard to imagine that these rules might further disrupt the current supply chain problems as vendors scramble to meet these requirements. But in the long run, these rules are great. We need to buy from American companies, support American jobs, and move manufacturing back to the U.S.


Optical Loss on Fiber

One issue that isn’t much understood except by engineers and fiber technicians is optical loss on fiber. While fiber is an incredibly efficient media for transmitting signals there are still factors that cause the signal to degrade. In new fiber routes these factors are usually minor, but over time problems with fiber accumulate. We’re now seeing some of the long-haul fibers from the 1980s go bad due to accumulated optical signal losses.

Optical signal loss is described as attenuation. Attenuation is a reduction in the power and clarity of a light signal that diminishes the ability of a receiving laser to demodulate the data being received. Any factor that degrades the optical signal is said to increase the attenuation.

Engineers describe several kinds of phenomenon that can degrade a fiber signal:

  • Chromatic Dispersion. This is the phenomenon where a signal gets distorted over distance as the different frequencies of light travel at different speeds. Lasers don’t generally create only one light frequency, but a range of slightly different colors, and different colors of light travel through the fiber at slightly different speeds. This is one of the primary factors that limits the distance that a fiber signal can be sent without needing to pass through a repeater to restart and synchronize all of the separate light paths. More expensive lasers can generate purer light signals and can transmit further. These better lasers are used on long haul fiber routes that might go 60 miles between repeaters while FTTH networks aren’t recommended to travel more than 10 miles.
  • Modal Dispersion. Some fibers are designed to have slightly different paths for the light signal and are called multimode fibers. A fiber system can transmit different date paths through the separate modes. A good analogy for the modes is to think of them as separate tubes inside of a conduit. But these are not physically separated paths and the modes are created by having different parts of the fiber strand to be made of a slightly different glass material. Modal dispersion comes from the light traveling at slightly different speeds through the different modes.
  • Insertion Loss. This is loss of signal that happens when the light signal moves from one media to another. Insertion losses occurs at splice points, where fiber passes through a connector, or when the signal is regenerated through a repeater or other device sitting in the fiber path.
  • Return Loss. This is the lost of signal due to interference caused when some parts of the light are reflected backwards in the fiber. While the glass used in fiber is clear, it’s never perfect and some photons are reflected backwards and interfere with oncoming light signals.

Fiber signal loss can be measured with test equipment that measure the delay in a fiber signal compared to an ideal signal. The losses are expressed in decibels (dB).  New fiber networks are designed with a low total dB loss so that there is headroom over time to accommodate natural damage and degradation. Engineers are able to calculate the amount of loss that can be expected for a signal traveling through a fiber network – called a loss budget. For example, they know that a fiber signal will degrade some specific amount, say 1 dB just from passing through a certain type of fiber. They might expect a loss of 0.3 dB for each splice along a fiber and 0.75 dB when a fiber passes through a connector.

The biggest signal losses on fiber generally come at the end of a fiber path at the customer premise. Flaws like bends or crimps in the fiber might increase return loss. Going through multiple splices increases the insertion loss. Good installation practices are by far the most important factor in minimizing attenuation and providing for a longer life for a given fiber path.

Network engineers also understand that over time that fibers degrade, Fibers might get cut and have to be re-spliced. Connectors get loose and don’t make perfect light connections. Fiber can expand and shrink from temperature extremes and create more reflection. Tiny manufacturing flaws like microscopic cracks will grow over time and create opacity and disperse the light signal.

This is not all bad news and modern fiber electronics allow for a fairly high level of dB loss before the fiber loses functionality. A fiber installed properly, using quality connections and with good splices can last a long time.

The Industry

The Mature Telco

All businesses go through similar phases – start-up, growth and maturity, and it’s important to understand which stage your business is in. When I first got into the industry in the 70s many small telcos had reached maturity. They companies were 50 to 75 years old. They had copper networks that were in good shape and there was no technology on the horizon that was going to threaten or compete with copper. As monopolies they knew their customers and they rarely changed products or prices. Their businesses were predictable from day to day and even from year to year.

But like many industries the telco industry got swept up from all of the changes that came from the constant improvements in computer chips. This technology revolution that started around 1980 has produced chips that doubled in density every three years (Moore’s law). And that brought us the electronics revolution of computers, smartphones, the Internet and the cloud.

And telco technology improved just like other electronics. We saw the widespread introduction of fiber optics into the network. We saw competition spring up from the coaxial networks of the cable companies (that also were improving along with telcos). We saw the growth of customer demand for broadband and telecom networks have become data networks much more than they are voice networks. The technology changes means that the industry has been in turmoil since 1980. For every new technology we saw, we knew that a few years later something newer and better would come along. We saw most of the historic telco vendors like Nortel and AT&T disappear due to the turmoil in the industry. And most (but not all small telcos were swept up by these changes andwere not as predictable as before.

But we are now seeing a slowdown of the constant technology upgrades. Moore’s law is finally starting to slow a bit and experts say there will likely only be a few more doublings of computer chip technology. More importantly a lot of small telcos have built, or soon will build fiber networks to replace their copper. And it is these fiber networks that are starting to bring telcos back to the mature stage again. Companies that build fiber networks know that they are not facing another major technology upgrade for a long time. We don’t even know how long modern fiber will last, but I’ve talked to scientists that say they expect it to be functional for 75 or even 100 years. We’ve also seen that fiber electronics last for a lot longer than we once expected. I know companies that are still operating fiber electronics built in the early 2000s – and which are still not showing any signs of failure.

So companies with fiber networks can now feel secure that they won’t be facing major future capital spending. They can hunker down and pay off any debt incurred to build fiber. Future electronics upgrades are liable to be introduced gradually rather than with a forklift. We also see both cable TV and telephone services moving to the cloud and telcos can buy these services wholesale from the cloud rather than operating headends and switches.

The industry as a whole still has some turmoil. The whole regulatory scheme that has driven telco revenues is changing. Voice regulations are being phased out but we are now seeing some new regulations for broadband. The biggest change for small telcos is that they are losing subsidies and the cost-based settlements that helped to fund their companies.

But companies that have built fiber and that will be solvent after the shakeout of the changes in settlement revenues are going to become those mature companies again. Companies can remain in growth mode if they continue to expand geographically.But once growth stops, a fiber-based company will become a mature company.

As mature companies they need to change their focus from building and upgrading mode to instead putting more attention on customer service. Because as long as they can keep their customers happy these mature companies will likely have a long and profitable future in front of them. The transition can be hard if a company doesn’t recognize it. For instance, many companies will keep construction crews and other remnants of their expansion days on board even though they are likely to never need them. So it’s important for a company that is not likely to grow to take a hard look into the future and to make the changes necessary to take best advantage of again being a mature company.


The Anniversary of Fiber Optics

I recently saw an article that noted that this month marks the fiftieth anniversary of a scientific paper by Charles Kao in 1966 that kicked off the field of fiber optics communications. That paper eventually won him the Nobel prize for physics in 2009. He was assisted by George Hockman, a British engineer who was awarded the Rank prize for Opto-electronics in 1978.

We are so surrounded by fiber optic technology today that it’s easy to forget what a relatively new technology this is. We’ve gone from theoretical paper to the world covered with fiber optic lines in only fifty years.

As is usual with most modern inventions, Kao and Hockman were not the only ones looking for a way to use lasers for communications. Bell Labs had considered using fiberglass but abandoned the idea due to the huge attenuation they saw in glass – meaning that the laser light signal scattered quickly and wouldn’t travel very far. Bell Labs was instead looking at shooting lasers through hollow metal tubes using focused lenses.

The big breakthrough was when Kao and Hockman found a way to reduce the attenuation within a fiberglass cable to less than 20 decibels per kilometer. At that level of attenuation they could overcome irregularities and impurities in the fiber cable.

It took a decade for the idea to be put to practical use and Corning Glass Works (now Corning Inc.) found ways to lower attenuation even more; they laid the first fiber optic cable in Torino, Italy in 1977.

We didn’t see any wide-spread use of fiber optics in the U.S. until the early 1980s. AT&T and a few other companies like the budding MCI began installing fiber as an alternative to copper for long-haul networks.

We’ve come a very long way since the first generation fiber installations. The glass was expensive to manufacture, and so the early fiber cables generally did not contain very many strands of glass. It was not unusual to see 6 and 8 strand fibers being installed.

Compared to today’s standards, the fiber produced in the 1980s into the early 1990s was dreadful stuff. Early fiber cables degraded over time, mostly due to microscopic cracks introduced into the cable during manufacturing and installation. These cracks grew over time and eventually caused the cables to become cloudy and unusable. Early splicing technologies were also a problem and each splice introduced a significant amount of interference into the fiber run. I doubt that there is much, if any, functional fiber remaining from those early days.

But Corning and other companies have continually improved the quality of fiber optic cable and today’s fiber is lightyears ahead of the early cables. Splicing technology has also improved and modern splices introduce very little interference into the transmission path. In fact, there is no good estimate today of how long a properly-installed fiber cable might last in the field. It’s possible that fiber installed today might still be functional 75 to 100 years from now. The major issues with the life of fiber today is no longer failure of the glass sheath, but rather the damage that is done to fibers over time due to fiber cuts and storm damage.

The speeds achieved in modern fiber optics are incredible. The newly commissioned undersea fiber that Google and others built between Japan and the west coast of the US can pass an incredible 60 Terabits per second of data. Improvements in laser technology have grown probably even faster than the improvements in fiber glass manufacturing. We’ve grown to where fiber optic cable is taken for granted as something that is reliable and relatively easy to install and use. We certainly would be having a very different discussion about broadband today had fiber optic cables not improved quickly over the last several decades.

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