Requiring U.S.-made parts would be “grossly inefficient” and a “radical departure” from normal markets, said Cisco, the largest maker of networking equipment. The comments were filed with the U.S. agency running the broadband initiative, part of the $787 billion stimulus package.

The rules may slow projects the stimulus was meant to spur because telecommunications networks contain parts from around the globe, the two equipment makers say. Congress, seeking to boost U.S. jobs, said funds provided under the law passed in February generally cant be used for iron, steel and factory goods that arent U.S.-produced.

“Were talking about technologies that are no longer made in the United States,” John Marinho, vice president of public affairs for Paris-based Alcatel-Lucent, said in an interview. The company operates in 130 countries, and “you need a global scale,” he said.

At stake is access to about $2.8 billion of the broadband funding that would go to equipment, said Jeff Evenson, a senior analyst with Sanford C. Bernstein & Co. in New York, in an interview.

Arguing Case

San Jose, California-based Cisco and Alcatel are arguing their case in filings and conversations with officials at the National Telecommunications and Information Administration, part of the Commerce Department.

President Barack Obama and Congress gave the NTIA $4.7 billion to spend on broadband, and provided $2.5 billion to the Rural Utilities Service, part of the Agriculture Department. The funds are part of the program to speed recovery of the U.S. economy.

Complex procurement chains “cannot be easily reengineered and supplanted in a matter of weeks or months,” Cisco said in its comments.

“The public interest in generating jobs cannot be served if network construction on public projects is delayed” by a search for U.S.-based suppliers, Cisco said.

The NTIA and Rural Utilities Service are working to devise the programs rules, which are to be released “in early summer,” Mark Tolbert, a spokesman for the Commerce Department unit, said in an interview. He didnt provide a date and declined to comment on the requests for waivers.

Thousands of Components

Goals for the broadband spending include creating jobs, bringing high-speed Internet to more Americans, stimulating investment, and connecting schools, libraries and other community centers, Mark Seifert, a senior adviser at the NTIA, told Congress in testimony April 2.

Theres no reason to exempt companies such as Cisco and Alcatel-Lucent from the Buy-American provision, said Debbie Goldman, Washington-based telecommunications policy director for the Communications Workers of America.

“This is about creating American jobs — not Chinese jobs,” Goldman said in an interview.

Global Supply Chain

Granting a blanket exemption “in effect awards companies that have created a global supply chain that excludes the United States,” Goldman said.

In a filing, she said applicants should request exemptions for each piece of equipment, subject to possible NTIA vetting.

“Show us,” Goldman said in the interview. “If youre claiming a router isnt made in America, show us.”

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