What You Can Market This Holiday Season (And Possibly Next!)

The Federal Communications Commission recently released a Notice of Proposed Rulemaking (NPRM), summarized here, proposing to relax certain restrictions on marketing and importation of radiofrequency devices which the private sector has indicated are onerous and stifle innovation. If the proposals are adopted, manufacturers would be allowed to conditionally sell, but not deliver, radiofrequency (RF) devices to consumers before receiving equipment authorization. They would also be able to import up to 4,000 RF devices (or more with approval from the FCC’s Chief Engineer) before receiving authorization under the Commission’s Certification procedures for certain pre-sale activities. These targeted enhancements would provide manufacturers with added flexibility to bring products to market faster.

This holiday season, manufacturers are unable to market RF devices to the general public unless they have been authorized under either Certification procedures or a Supplier’s Declaration of Conformity (SDoC). Manufacturers are also presently unable to get a jump start on pre-sale activities such as packaging and delivering devices to retailers or loading retail display devices with supporting software. Existing rules prohibit marketing of unauthorized devices to consumers but allow for conditional sales in certain instances to wholesalers or retailers and to commercial users. Existing rules also generally prohibit importation of unauthorized equipment, except in limited circumstances, such as for compliance testing, repair, exhibition at trade shows, or federal government use. As the Commission acknowledges, stringent equipment authorization rules such as these “have in some ways failed to keep pace with developments in the modern device ecosystem.”

If adopted, the Commission’s new rules could change things for next holiday season, for the better. Manufacturers would be able to provide conditional sales to the general public, as well as import a limited number of RF devices subject to Certification (but not the SDoC) for pre-sale activities. The next generation connected device, for example, could be marketed and sold directly to consumers before receiving authorization. The manufacturer would have to inform the prospective buyer at the time of marketing that delivery is contingent upon compliance with applicable equipment authorization requirements. Additionally, the proposed rules would allow manufacturers, under certain conditions, to get a head start on pre-sale packaging and delivery of that connected device to retailers.

Modernizing the Commission’s equipment authorization regime is particularly important as the U.S. strives to secure its leadership position in the deployment of 5G and IoT products and services. As the Commission has observed, RF equipment supply chains have become increasingly global and manufacturers are under increased pressure to shorten product time to market. This is particularly true for 5G and IoT devices. Manufacturers would be better able to assess consumer interest and, where demand is great, prepare for product sales more effectively under the proposed rules.

It has been several years since the FCC has made substantial changes to its marketing rules and equipment authorization program. With 5G deployments underway and IoT use cases skyrocketing , the time is ripe to revisit some of these outdated policies. Opportunities abound to further modernize the Commission’s marketing and importation rules, as we recently discussed on a WileyConnected podcast covering some of the key equipment issues arising with 5G.

Manufacturers, retailers, and equipment users should consider presenting further suggestions to the Commission as part of this present proceeding. Wiley attorneys and engineers are well-versed on equipment authorization matters, including marketing and importation matters, and would be pleased to provide counsel. Comments on the NPRM will be due 30 days after publication in the Federal Register, and reply comments will be due 15 days thereafter.

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