The FCC has released its proposed procedures for the upcoming EBS spectrum auction, including a novel approach for bidding. In the meantime, the FCC requires EBS licensees to continue to provide service.
On June 17, 2021 the FCC approved a Report and Order modifying its equipment authorization program for radiofrequency devices. The Order updates the Commission’s marketing and importation rules in order to minimize obstacles to the development and deployment of new products while continuing to ensure that radiofrequency equipment remains compliant with Commission requirements.
Section 302 of the Communications Act empowers the FCC to create rules governing radiofrequency devices. This regulatory scheme requires that radiofrequency devices be certified as complying with the Commission’s technical and equipment authorization requirements before they can be marketed in or imported into the United States. These rules are intended to minimize the potential for harmful interference, as well as to ensure that radiofrequency devices comply with other Commission requirements.
In June of 2020, the Consumer Technology Association (CTA) filed a petition seeking to modify the rules pertaining to radiofrequency device marketing and importation. In January 2021, after soliciting and receiving comments on the petition, the Commission issued an initial Notice of Proposed Rulemaking (NPRM). The comments received were overwhelmingly in support of the proposed rule changes.
The Order adopts two primary changes to the rules: the first expands conditional sales of radiofrequency devices prior to authorization, and the second allows for pre-importation certification of radiofrequency devices under certain circumstances. More information on each is provided below:
Pre-Certification Conditional Sales and Advertisement to Consumers
The first change permits conditional sales and advertisement of FCC-regulated devices to consumers prior to obtaining equipment authorization, under certain circumstances. Previously, the FCC would allow for some marketing prior to equipment authorization, in the form of a) conditional sales contracts between manufacturers and retailers and b) marketing to business and commercial users in the early stages of the production process, but it did not allow conditional sales or marketing to the general public.
The Order modifies this exception to permit the sale to other entities, including consumers, provided that the prospective buyer is advised that delivery of the device is conditioned upon successful completion of the applicable equipment authorization process, and that the prospective buyer is provided information relating to the refund policy should the equipment authorization is not successfully completed. The rationale is that new developments in how products are marketed and sold means that today, both consumers and innovators have a greater expectation that the general public will be involved–and should be involved at an earlier stage–in the consumption of new technology as it’s developed.
However, in order to make sure that unauthorized radiofrequency devices do not reach consumers, all devices must remain under the legal ownership of the initiating party (manufacturer or developer), though physical transfer may be permissible under certain circumstances. Devices would still not be permitted to be delivered to consumers until equipment authorization has been obtained.
The second change permits devices now to be imported prior to equipment certification, subject to certain conditions. This change allows for pre-certification importation of up to 12,000 devices, so long as those devices meet the following three conditions: 1) they are subject to a certification application that has been submitted to a Telecommunication Certification Body; 2) they include an externally-visible temporary label prohibiting display to consumers, operation, and delivery of the device prior to the grant of certification; and 3) they remain under legal ownership of the device manufacturer, developer, importer or ultimate consignee, or designated customs broker until certification is complete.
In the NPRM, the Commission had proposed a requirement that manufacturers importing devices have a “reasonable belief that authorization will be granted within 30 days of importation.” Reacting to commenters who said that 30 days would be too short, the Commission revised its proposal, instead requiring that importation “can only occur after compliance testing is complete and an application for certification has been submitted, in good faith, to a TCB.” The 12,000-device cap represents another difference between the NPRM (which had proposed a cap of 4,000) and the Order as it currently stands–the increase reflects an interest in allowing for more even distribution to urban and rural areas and an attempt to account for the high number of potential retailers.
The new rules will become effective 30 days after the Report and Order is published in the Federal Register.