CQ UAS: FCC Proposes $2.8 Million Fine, Sends Warning to Drone Equipment Manufacturers and Operators
June 6, 2018
In a reminder that the Federal Aviation Administration (FAA) is not the only agency with authority over unmanned aircraft system (UAS) operations, yesterday the Federal Communications Commission (FCC) announced a proposed $2.8 million forfeiture against HobbyKing for marketing certain radio transmitters for use with drones that operate outside their authorized spectrum bands, and at power levels beyond what the FCC has permitted. The action came in a Notice of Apparent Liability (NAL), which is the FCC civil equivalent of an indictment or charging document. HobbyKing can either respond to the NAL with a pleading arguing that the FCC’s tentative conclusions about the facts or law are incorrect, or it can choose to pay the NAL without challenging it. The FCC also issued an enforcement advisory warning retailers of drone transmitters about relevant requirements and noting that UAS operators also need to be aware of any FCC licensing requirements that may be required for their operations.
The FCC is the agency charged with administering the use of radio frequency (RF) spectrum for non-Federal use. As part of that responsibility, the FCC regulates devices that have the potential to cause RF interference. The Communications Act makes it unlawful to “manufacture, import, sell, offer for sale, or ship devices or home electronic equipment and systems, or use devices, which fail to comply” with the FCC’s regulations in this area. One of the FCC’s rules prohibits marketing RF devices that are required to be certified unless the device has been properly certified, identified, and labeled. Although amateur equipment for use by licensed amateurs (“hams”) in spectrum allocated to the Amateur Radio Service need not be certified, equipment that can operate on non-amateur frequencies must be certified and appropriately labeled. The FCC’s rules also establish power limits for emissions of devices, including those used only in amateur bands.
The NAL alleges that HobbyKing, through its website, offered 65 different models of devices that could be used to send video from a UAS back to the operator. According to the FCC, HobbyKing represented that these devices operate in designated amateur radio bands, but an FCC investigation determined that they were capable of operating outside these bands. In addition, the Commission tentatively determined that three of the devices transmitted at 150 to 200 percent of the authorized power level. The NAL underlines the reach of the FCC’s restrictions on “marketing.” HobbyKing apparently does not dispute that its devices do not comply with FCC rules, but instead asserted that a foreign company selling via the web does not constitute marketing in the United States. The FCC, however, disagrees, referencing a HobbyKing Instagram post as evidence that HobbyKing was in fact marketing in the United States. The FCC also emphasizes in the NAL that “a cautionary note on a company’s website” advising purchasers to be aware of local laws “in no way absolves a company from its obligation not to market noncompliant devices.”
Separately, but clearly related to the HobbyKing NAL, the FCC also issued an advisory yesterday to retailers warning that drone video transmitters like the ones offered by HobbyKing are radio transmitters that must comply with the FCC’s rules in order to be marketed. This generally means that they must have FCC certification, or that they must operate wholly within frequencies the FCC has allocated for amateur licensee use. The FCC’s advisory also notes that drone operators must comply with the FCC’s rules when using these video transmission accessories, including holding an amateur license if using devices in the amateur band.
The advisory notes that penalties for violations can be substantial—up to $19,639 per day for marketing violations, and up to $147,290 for an ongoing violation. The proposed $2.8 million forfeiture against HobbyKing illustrates this point and showcases the FCC’s wide discretion to upwardly adjust forfeitures for what it perceives as egregious behavior. The FCC’s rules set a base forfeiture for marketing unauthorized equipment of $7,000 per violation or for each day of a continuing violation. Identifying each of the 65 models of noncompliant devices as a single violation, the FCC calculated a proposed base forfeiture of $455,000. The agency adjusted that amount upward substantially based on a number of factors, including that HobbyKing had continued to market devices even after the FCC’s investigation commenced in 2015, and that a number of the devices at issue were capable of operating on frequencies restricted for FAA and public safety operations, thereby threatening public safety.
The HobbyKing NAL also illustrates another important point—the FCC takes the obligation to fully respond to its investigations seriously. In the HobbyKing NAL, part of the proposed forfeiture is for failure to fully respond to the agency’s Letter of Inquiry. This only makes up about $40,000 of the total $2.8 million penalty, but there is little doubt that this additional violation colored the FCC’s view of the rest of the target’s conduct.
While the proposed HobbyKing forfeiture and the related enforcement advisory signal FCC concern with unauthorized and non-compliant hardware, one should not jump to the conclusion that all drone video accessories are unlawful. Compliance with FCC regulations is not extraordinarily difficult, and thousands of consumer products are appropriately certified and legally marketed in the United States every year. For those drone operators looking to relay video back to the ground, there are plenty of legal options. But even if the equipment meets the FCC’s requirements, the FCC’s advisory underscores the need for drone operators to know what spectrum their aircraft uses and understand any applicable licensing requirements.