Skip to content

Last Thursday, the Federal Communications Commission (“FCC”) announced that it will consider a Report and Order at its June 21, 2021 open meeting that would permit the importation and conditional sale of radiofrequency (RF) devices prior to obtaining equipment authorization in some circumstances.  The consumer electronics industry has advocated for this rule change, which will facilitate pre-sales and other marketing of new devices in the marketplace.If adopted, the Report and Order would afford manufacturers and developers of RF devices significant flexibility in conducting pre-sale activities and potentially reduce the time required to deliver devices to market.  These revisions represent a significant change to the FCC’s equipment and marketing rules and bring the FCC’s equipment marketing and pre-sales regime in line with many other industries.

Importation

Under the FCC’s current rules, it is unlawful for equipment to be imported until the equipment has been fully authorized under the FCC’s rules.  The Report and Order, if adopted, would modify the FCC’s equipment authorization rules to permit up to 12,000 devices with a single FCC ID to be imported prior to obtaining certification if certain conditions are met.  (That number was designed so that manufacturers or retailers could display sample devices in brick-and-mortar stores across the country to gauge, or promote, consumer interest in the devices.)  These conditions would include:

  • Completing compliance testing and submitting a certification application to the Telecommunications Certification Body;
  • Appropriately labeling the devices;
  • Retaining legal ownership of the devices with the manufacturer, developer, importer, or ultimate consignee or their designated customs broker; and
  • Maintaining a retrieval process for devices that are not ultimately authorized, with the burden falling on the manufacturer, developer, importer, or ultimate consignee or their designated customs broker.

The Report and Order would not permit devices to be imported prior to authorization if they are subject to the Suppliers Declaration of Conformity (SDoC) process, because the SDoC process provides manufacturers greater flexibility in determining whether a device complies with FCC requirements.

Conditional Sales

Under the FCC’s current rules, which have been in place for decades, it is unlawful for any person to offer for sale to consumers or generally to advertise a device until the device has been fully authorized by the FCC.  The Report and Order would revise the FCC’s rules to permit conditional sales and advertisement of FCC-regulated devices to consumers prior to obtaining equipment authorization, on several conditions, including:

  • Providing appropriate disclosures to buyers;
  • Retaining legal ownership of the initiating party (i.e., manufacturer or developer) over the devices;
  • Delaying delivery of devices until the equipment authorization process is successfully completed;
  • Affixing appropriate temporary labels on devices indicating that authorization has not yet been obtained; and
  • Maintaining required recordkeeping practices with respect to the devices.

In addition, the scope of permitted pre-sale activity would not include the display or demonstration of the device to consumers.

And in a further break from its decades of practice, the FCC will allow physical transfer of RF devices prior to authorization where devices are subject to certification (rather than the SDoC process) and transferred to contracting parties other than the ultimate user for qualified pre-sale activities, such as packaging and transferring devices to distribution centers or retailers.  Additionally, the Report and Order would adopt rules that ensure that consistent measures apply to devices regardless of their origin, whether imported or manufactured in the U.S.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Matthew DelNero Matthew DelNero

Matt DelNero provides expert regulatory counsel to companies of all sizes in the telecommunications, technology and media sectors. As a former senior official with the FCC and longtime private practitioner, Matt helps clients achieve their goals and navigate complex regulatory and public policy…

Matt DelNero provides expert regulatory counsel to companies of all sizes in the telecommunications, technology and media sectors. As a former senior official with the FCC and longtime private practitioner, Matt helps clients achieve their goals and navigate complex regulatory and public policy challenges.

Matt serves as co-chair of Covington’s Technology & Communications Regulation (“TechComm”) Practice Group and co-chair of the firm’s Diversity & Inclusion initiative.

Matt advises clients on the full range of issues impacting telecommunications, technology and media providers today, including:

  • Structuring and securing FCC and other regulatory approvals for media and telecommunications transactions.
  • Conducting regulatory due diligence for transactions in the telecommunications, media, and technology sectors.
  • Obtaining approval for foreign investment in broadcasters and telecommunications providers.
  • Universal Service Fund (USF) programs, including the FCC’s Rural Digital Opportunities Fund (RDOF).
  • FCC enforcement actions and inquiries.
  • Online video accessibility, including under the Communications and Video Accessibility Act (CVAA) and Americans with Disabilities Act (ADA).
  • Equipment authorizations for IoT and other devices.
  • Spectrum policy and auctions, including for 5G.
  • Privacy and data protection, with a focus on telecommunications and broadband providers.

Matt also maintains an active pro bono practice representing LGBTQ+ asylum seekers, as well as veterans petitioning for discharge upgrades—including discharges under ‘Don’t Ask, Don’t Tell’ and predecessor policies that targeted LGBTQ+ servicemembers.

Prior to rejoining Covington in January 2017, Matt served as Chief of the FCC’s Wireline Competition Bureau. He played a leading role in development of policies around net neutrality, broadband privacy, and broadband deployment and affordability under the federal Universal Service Fund (USF).

Chambers USA has recognized Matt as a “go-to attorney for complex matters before the FCC and other federal agencies, drawing on impressive former government experience.”

Photo of Madeline Salinas Madeline Salinas

Madeline Salinas counsels national and multinational companies across industries on data privacy, content moderation, and advertising issues.

Madeline advises clients on compliance with federal and state privacy frameworks, and counsels clients on navigating the rapidly evolving legal landscape. She regularly assists clients in…

Madeline Salinas counsels national and multinational companies across industries on data privacy, content moderation, and advertising issues.

Madeline advises clients on compliance with federal and state privacy frameworks, and counsels clients on navigating the rapidly evolving legal landscape. She regularly assists clients in designing cutting-edge products and services, developing privacy notices and consent forms, strategically engaging with state legislatures, and participating in rulemaking proceedings of state and federal agencies. In particular, Madeline has experience advising clients on compliance with laws implicating children’s privacy.

Madeline also partners with clients in developing content moderation policies and designing products and services that facilitate sharing of user-generated content, analyzing the evolving legal landscape and public policy considerations related to content moderation.

As part of her practice, Madeline represents clients in consumer protection enforcement actions brought by the Federal Trade Commission on topics related to data privacy and advertising.

Photo of Gerard J. Waldron Gerard J. Waldron

Gerry Waldron represents communications, media, and technology clients before the Federal Communications Commission and Congress, and in commercial transactions. Gerry served as chair of the firm’s Communications and Media Practice Group from 1998 to 2008. Prior to joining Covington, Gerry served as the…

Gerry Waldron represents communications, media, and technology clients before the Federal Communications Commission and Congress, and in commercial transactions. Gerry served as chair of the firm’s Communications and Media Practice Group from 1998 to 2008. Prior to joining Covington, Gerry served as the senior counsel on the House Subcommittee on Telecommunications. During his work for Congress, he was deeply involved in the drafting of the 1993 Spectrum Auction legislation, the 1992 Cable Act, the Telephone Consumer Protection Act (TCPA), CALEA, and key provisions that became part of the 1996 Telecommunications Act.

Gerry’s practice includes working closely on strategic and regulatory issues with leading IT companies, high-quality content providers in the broadcasting and sports industries, telephone and cable companies on FCC proceedings, spectrum entrepreneurs, purchasers of telecommunications services, and companies across an array of industries facing privacy, TCPA and online content, gaming, and online gambling and sports betting-related issues.

Gerry has testified on communications and Internet issues before the FCC, U.S. House of Representatives Energy & Commerce Committee, the House Judiciary Committee, the Maryland Public Utility Commission, and the Nevada Gaming Commission.