[Federal Register Volume 66, Number 194 (Friday, October 5, 2001)]
[Rules and Regulations]
[Pages 50834-50841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24953]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 2

[ET Docket No. 00-47; FCC 01-264]


Software Defined Radios

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document we amend the Commission's rules to create a 
new class of equipment for software defined radios (SDRs) with 
streamlined equipment authorization procedures. We anticipate that 
software defined radio technology will allow manufacturers to develop 
reconfigurable transmitters or transceivers that can be multi-service, 
multi-standard, multi-mode, and multi-band. Specifically, we are 
amending our equipment authorization rules to permit equipment 
manufacturers to make changes in the frequency, power and modulation 
parameters of such radios without the need to file a new equipment 
authorization application with the Commission. We will also permit 
electronic labeling so that a third party may modify a radio's 
technical parameters without having to return it to the manufacturer 
for re-labeling. These changes will facilitate the deployment and use 
of this promising new technology, which we believe will facilitate more 
efficient use of the spectrum.

DATES: Effective February 4, 2002.

FOR FURTHER INFORMATION CONTACT: Hugh Van Tuyl, Office of Engineering 
and Technology, (202) 418-7506.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's First 
Report and Order in ET Docket No. 00-47, FCC 01-264, adopted September 
13, 2001, and released September 14, 2001. The full text of this 
Commission decision is available on the Commission's Internet site at 
www.fcc.gov. It is available for inspection and copying during normal 
business hours in the FCC Reference Information Center, Room CY-A257, 
445 12th Street, SW., Washington, DC, and also may be purchased from 
the Commission's duplication contractor, Qualex International (202) 
863-2893, Room CY-B402, 445 12th Street, S.W. Washington, D.C. 20554.

Summary of the First Report and Order

    1. In this First Report and Order (FR&O), the Commission amends 
part 2 of its rules to create a new class of equipment for software 
defined radios (SDRs) with streamlined equipment authorization 
procedures. We anticipate that software defined radio technology will 
allow manufacturers to develop reconfigurable transmitters or 
transceivers that can be multi-service, multi-standard, multi-mode, and 
multi-band. Specifically, we are amending our equipment authorization 
rules to permit equipment manufacturers to make changes in the 
frequency, power and modulation parameters of such radios without the 
need to file a new equipment authorization application with the 
Commission. We will also permit electronic labeling so that a third 
party may modify a radio's technical parameters without having to 
return it to the manufacturer for re-labeling. These changes will 
facilitate the deployment and use of this promising new technology, 
which we believe will facilitate more efficient use of the spectrum.
    2. In March 2000, the Commission issued a Notice of Inquiry, 65 FR 
17246, March 31, 2000, seeking information from the public on a number 
of issues raised by the development of software defined radios. 
Subsequently, in December 2000, the Commission issued a Notice of 
Proposed Rule Making (NPRM), 66 FR 341, January 3, 2001, that proposed 
to define software defined radios as a new class of equipment and to 
simplify the authorization requirements for such equipment.
    3. Upon reviewing the record, we conclude that it is desirable to 
revise our equipment authorization rules to accommodate the flexibility 
offered by software defined radios. The ability of software defined 
radios to be reprogrammed to new operating parameters in the field 
could have far reaching implications for the way the Commission 
allocates and licenses spectrum and authorizes radio equipment. 
Software defined radios could allow more efficient use of spectrum by 
facilitating spectrum sharing and by allowing equipment to be 
reprogrammed to more efficient modulation types. Their ability to be 
programmed could also enhance interoperability between different radio 
services. We find that it is possible to provide this flexibility in a 
manner that will ensure that software defined radios operate in 
compliance with the rules for the service in which they will operate. 
We therefore are adopting a definition of software defined radio and a 
streamlined procedure for making changes to the operating parameters of 
software defined radios. We are also adopting rules to permit 
electronic labeling of software defined radios and to require 
manufacturers to take steps to prevent unauthorized software 
modifications. These changes will provide greater flexibility to 
manufacturers to facilitate the deployment of software defined radios 
while fulfilling our statutory requirement to protect the public from 
harmful interference. We will consider additional rule changes in the 
future as software defined radio technology advances.

[[Page 50835]]

Definition of Software Defined Radio

    4. The NPRM proposed to define a software defined radio, for 
regulatory purposes, as ``* * * a radio that includes a transmitter in 
which the operating parameters of the transmitter, including the 
frequency range, modulation type or maximum radiated or conducted 
output power can be altered by making a change in software without 
making any hardware changes.'' We indicated that this definition was 
not intended to cover devices that use software simply to control 
functions such as power or frequency within a range approved by the 
Commission. Receivers would not be covered under this definition.
    5. Based on the comments received, we are adopting the following 
regulatory definition for software defined radio that requires that at 
least one of the three operating parameters of frequency, modulation 
type or output power be software programmable. Our purpose in adopting 
this expansive definition of software defined radio is to foster 
development of this promising technology and to enable manufacturers to 
take advantage of the streamlined equipment authorization process, if 
they so desire.

    Software Defined Radio. A radio that includes a transmitter in 
which the operating parameters of frequency range, modulation type or 
maximum output power (either radiated or conducted) can be altered by 
making a change in software without making any changes to hardware 
components that affect the radio frequency emissions.

Authorization Requirements

    6. The rules currently require most radio transmitters to be 
approved by the Commission or a designated Telecommunication 
Certification Body (TCB) before they may be marketed. When changes are 
made to the operating frequencies, output power, or types of radio 
frequency emissions of an authorized transmitter, the grantee is 
required to apply for a new approval and wait until the approval is 
issued before the equipment may be marketed with the changes.
    7. The rules allow two classes of ``permissive changes'' for 
authorized equipment without requiring a new approval. Class I 
permissive changes include modifications that do not degrade the RF 
emissions from a device at the time of initial certification and do not 
require any filing with the Commission. Class II permissive changes 
include modifications other than frequency, modulation or power that 
degrade the RF emissions from a device reported at the time of the 
initial certification. Class II changes are authorized through a 
streamlined filing procedure that does not require the filing of a 
complete application form with all exhibits normally required for a new 
approval. Instead, the applicant simply files a description of the 
changes and measurement results showing the changed equipment continues 
to comply with the rules.
    8. The transmitter authorization rules were developed at a time 
when transmitters were hardware based. At that time, changes to the 
frequency, modulation type, and power output of a transmitter were 
performed by making changes to the layout and physical components of 
electronic circuits. Such changes essentially resulted in a new device, 
so we required a complete new application form with all exhibits and 
required a new identification number on the device. However, in a 
software defined radio, changes to these operating parameters can be 
accomplished through a software change with no change in hardware. 
Requiring manufacturers to obtain a new approval for equipment when 
changes are made only to the software is unnecessarily burdensome 
because a new identification number must be used and the equipment 
already in the field may have to be recalled for re-labeling by the 
manufacturer. Therefore, we proposed in the NPRM to develop a more 
streamlined authorization procedure for changes to the operating 
parameters of software defined radios.

Class III Permissive Change

    9. We proposed that any changes in frequency, power, or modulation 
type of a software defined radio may be authorized as a new class of 
permissive change, which we proposed to designate as Class III. This 
would streamline the filing procedure for changes to approved software 
defined radios and would eliminate the need for a new identification 
number. We also proposed to require that the applicant for a Class III 
change submit test data showing that the equipment complies with the 
applicable requirements for the service(s) or rule parts under which 
the equipment will operate with the new software. The applicant would 
have to demonstrate compliance with the applicable RF exposure 
requirements. The Commission would notify the applicant when a 
permissive change is granted. Once a Class III permissive change was 
granted for a software defined radio with changes that affect the 
operating parameters, the new software could be loaded into units in 
the field. The record in the Commission's database for each authorized 
device would be amended to show the approved frequency range(s), power 
and modulation type(s) as it does now. Additional frequency ranges or 
other new technical parameters would be added to the database record 
for an authorization when a permissive change is granted.
    10. We conclude that the proposed Class III change will benefit 
manufacturers by streamlining the equipment approval process. 
Manufacturers will no longer need to file a complete application form 
or much of the information required with a new certification 
application, which includes photographs, circuit diagrams and a 
description of the equipment. In addition, permissive changes to 
existing equipment are processed on a faster track than new 
certifications. We find that the proposed Class III permissive change 
strikes the appropriate balance between reducing the regulatory burden 
on manufacturers and protecting the public from interference and safety 
hazards from radio equipment. Accordingly, we are adopting the Class 
III permissive change for software defined radios.
    11. We find that self-approval is not appropriate for software 
defined radios at this time. As we stated in the NPRM, equipment is 
generally placed in the self-approval category after the Commission has 
gained some assurance that manufacturers can and do produce equipment 
that complies with the rules. Given the early state of software defined 
radio technology, some experience with the equipment is necessary 
before we can determine whether self-approval is appropriate. We expect 
to re-evaluate the appropriateness of allowing manufacturers' self-
approval for software defined radios in a future proceeding.

Identification as a Software Defined Radio

    12. The NPRM proposed that Class III changes would only be 
permitted for a transmitter that was identified as a software defined 
radio in the original application for certification. The purpose of 
this proposal was to identify which devices would be subject to the new 
rules.
    13. We will require the applicant to identify a software defined 
radio at the time an original application is filed in order for it to 
be eligible for Class III permissive changes. This will allow the 
application reviewer to determine which requirements the equipment must 
meet, such as the security features and labeling discussed below, and 
whether the applicant has demonstrated

[[Page 50836]]

compliance with them. When applying for a Class III permissive change, 
the applicant must reference the initial declaration. We decline to 
establish a mechanism to reclassify previously approved devices as 
software defined radios. We find that such an approach would 
unnecessarily complicate the application process. Furthermore, 
additional supplementary information for existing equipment would have 
to be filed in any event. We note, however, that this approach would 
not prohibit the filing of a new request for an authorization as a 
software defined radio, permitting the device to be subsequently 
eligible for Class III permissive changes.

Third Party Permissive Changes

    14. We proposed to allow only the party holding the grant of 
equipment authorization for a software defined radio to file for a 
Class III permissive change. The reason is that the party holding the 
grant of equipment authorization, which is indicated by the 
identification number, is responsible for ensuring that equipment 
complies with the rules. When a permissive change is made, the same 
identification number is used, indicating that the same party continues 
to be responsible for compliance with the rules. Allowing other parties 
to make permissive changes could result in questions of which party is 
liable if the changed equipment is subsequently found to be non-
compliant.
    15. We adopt our proposal to allow Class III changes to be 
requested only by the grantee of equipment authorization to eliminate 
ambiguities about which party is responsible for the compliance of a 
device. This approach would not preclude third parties from being able 
to modify software defined radios in the field. We agree with the 
comments that it is desirable to provide a means to allow third parties 
to develop new and innovative software for software defined radios. 
This can be accomplished in two ways. First, the original grantee may 
authorize a third party to file an application with the Commission on 
its behalf as we permit now. The original grantee would continue to be 
responsible for the continued compliance of the device. The second way 
is for a third party to obtain a new identification number for a device 
and become the party responsible for its compliance. The new 
identification number can be placed on the equipment through electronic 
labeling as discussed. The rules we are adopting allow any party to 
install or make changes to application or other software in a radio 
that does not affect the authorized operating parameters.

Combined Hardware and Software Changes

    16.We proposed to allow Class III permissive changes only for 
equipment in which no hardware changes have been made from the 
originally approved device because this would eliminate ambiguity about 
which hardware and software combinations have been approved. However, 
the NPRM sought comments on whether we should allow a combination of 
hardware and software permissive changes in a single device.
    17. We will permit combinations of Class III permissive changes and 
Class I permissive changes to hardware in a single device. Class I 
changes do not degrade the radio frequency emissions from a device, so 
allowing such combinations of hardware and software changes should not 
cause any compliance problems. However, at this time we will not permit 
Class III changes to be combined with Class II hardware changes that 
could affect radio frequency emissions. This could cause ambiguity in 
which combinations of hardware and software are approved in a radio, 
making enforcement of the rules difficult. Also, as some comments 
noted, combinations of changes made at different times could have 
unknown effects on the interference potential and RF safety of a radio. 
In addition, we question whether a radio in which any hardware changes 
are necessary to change operating parameters should even be considered 
a software defined radio. However, we will consider revisiting this 
issue as the Commission and industry gain greater experience with 
software defined radios.

Limit on the Number of Hardware and Software Combinations

    18. The NPRM sought comment on whether we should limit the number 
of hardware and software combinations permitted under a single 
authorization. We noted that some transmitters are tested with multiple 
antennas to ensure they will comply in every configuration in which 
they will be used, and that allowing software variations could increase 
the number of hardware and software combinations existing under a 
single approval.
    19. We agree with the commenting parties who argue that no limit 
should be placed on the number of hardware and software combinations. 
Such limits could inhibit common hardware platforms. We have no reason 
to expect that such a large number of combinations will exist for a 
particular device that a determination of compliance would be 
difficult. We will not permit hardware changes that degrade the 
operating parameters to be made after the initial approval, which will 
help limit the number of hardware/software combinations under a single 
approval. We will continue to monitor this area and revisit this issue 
in the future if warranted.

Copy of Radio Software

    20. The NPRM sought comments on whether there is a need for 
applicants to submit a copy of radio software to the Commission. Review 
of software code by the staff would be difficult and time consuming and 
would not necessarily assist in determining whether a device complies 
with the rules. We believe that obtaining a copy of the code from an 
applicant would not be necessary for determining compliance in the 
great majority of cases. Accordingly, we will not routinely require 
applicants to supply a copy of the radio software. However, we believe 
cases may arise wherein the staff may need to examine the software code 
used in a device as part of determining its compliance. We therefore 
may require the submission of software code on request.

Filing Fees

    21. The NPRM proposed to apply the filing fee for certification of 
transmitters used in licensed services to the new Class III permissive 
changes to reflect the staff time required to process these changes. 
While the filing procedure for permissive changes has been streamlined, 
Commission staff is still required to perform a technical review of the 
test data for compliance with the rules. We are therefore adopting the 
fee we proposed for Class III permissive changes. This fee reflects the 
expected review time for Class III changes and is the same as we 
require for approval of transmitters used in licensed services. Where a 
radio will operate under multiple rule parts, requiring increased 
review time, we will charge multiple fees as currently set out in the 
rules.

Software Modifications

    22. We tentatively concluded in the NPRM that a means will be 
necessary to avoid unauthorized modifications to software that could 
affect the compliance of a radio. Because groups such as the SDR Forum 
and ETSI are still in the process of developing standards for 
encryption and digital signatures that could be used in software 
defined radios, we declined to propose specific requirements for 
authentication. Instead, we proposed a more general requirement that 
manufacturers take steps to ensure that

[[Page 50837]]

only software that is part of a hardware/software combination approved 
by the Commission or a TCB can be loaded into a radio. The radio 
software must not allow users to operate the radio with frequencies, 
output power, modulation types or other parameters outside of those 
that were approved. We proposed to allow manufacturers to use any 
appropriate means to meet these requirements and require them to 
describe the methods in the application for equipment authorization.
    23. We find that a means is necessary to ensure that software 
changes cannot be made to a radio that will cause it to operate with 
parameters outside of those that were approved in order to prevent 
interference to authorized radio services. We decline to set specific 
security or authentication requirements at this time because they could 
hinder the development of the technology used to provide such security 
and could have the potential to be unduly burdensome on manufacturers. 
We note that industry groups are still in the process of developing 
security standards. We continue to believe that the best approach is to 
rely on a general requirement that manufacturers take adequate steps to 
prevent unauthorized changes to the software that drives their 
equipment. This will allow manufacturers flexibility to develop 
innovative software defined transmitting equipment while at the same 
time providing for oversight of the adequacy of such steps through the 
equipment authorization process. Accordingly, we are adopting the 
proposal in the NPRM that manufacturers must take steps to prevent 
unauthorized software changes to a software defined radio. The precise 
methods of ensuring the integrity of the software in a radio will be 
left to the manufacturer, and the manufacturer must document the 
methods in the application for equipment authorization. However, it is 
possible that we may have to specify more detailed security 
requirements at a later date as software defined radio technology 
develops. Our intent is to focus on results that security efforts 
should achieve rather than the means that must be used. The SDR Forum 
has indicated that it is continuing to develop methods for the security 
and authentication of radio software and that it will report its 
findings to the Commission. We will consider further input from 
industry and other government agencies in determining whether more 
detailed security requirements are necessary. We encourage all 
interested parties to submit relevant information within one year of 
adoption of this order.

Labeling

    24. A major benefit of software defined radios will be the ability 
of manufacturers to produce radios intended to be programmed by third 
parties with unique or specialized software. To help realize this 
benefit, we proposed an option that would allow software defined radios 
to be equipped with an ``electronic label'' to display the FCC 
identification number by means of a light emitting diode (LED) display, 
a liquid crystal display (LCD) or other similar method. This would 
provide a method to re-label equipment in the field if a new approval 
were obtained by a third party for a previously approved device.

Need for Electronic Labeling

    25. We will permit electronic labeling for software defined radios 
as proposed. This option will avoid the need for physical re-labeling 
of equipment when a party other than the original grantee makes changes 
to the radio software. We do not agree with Clearwire's proposal to 
require only a single identification number on each device. As we 
stated, the FCC identification number is the indicator of which party 
is responsible for the compliance of a device and we have determined 
that only the original grantee may make changes to the operating 
parameters under the original identification number. At this time, we 
are only permitting electronic labeling for software defined radios.

Type of Display

    26. Several parties believe that we should allow means other than 
an LED or LCD screen for displaying the labeling information. We are 
limiting electronic labeling to software defined radios with an LED, 
LCD or similar display device at this time because it would be 
significantly more difficult to an investigator or user to obtain the 
label information through a remote terminal or other device. As 
proposed, we are requiring that the electronic label be readily 
accessible, which could include, for example, a menu option or a 
hotkey. Additionally, the user manual must include information on how 
to access the electronic label. We are not requiring that the 
electronic labeling be visible when the power, such as the battery 
pack, is removed from the device. This would burden manufacturers by 
requiring them to install a backup battery and possibly additional 
switches and circuitry to display the identification information.

Information To Be Displayed

    27. Cingular believes that electronic labels should display the FCC 
identification number, and that the display should change automatically 
based upon the hardware and software installed. The SDR Forum believes 
that nothing about the required identification information should 
change, other than the means of display. NTIA believes that all the 
information currently required on the label could be made available on 
the user display screen. NTIA also wants the Commission to make clear 
what other information must be included on the electronic label, such 
as the authorized emissions or other regulated radio parameters.
    28. We agree with Cingular and will only require that the FCC 
identification number(s) associated with the software running in the 
radio be displayed on the electronic label. The other information that 
NTIA suggested including on the label is already in the Commission's 
database under the FCC identification number. The database is available 
to the public through our Internet site, so we do not believe it is not 
necessary to require information on the operating parameters on the 
electronic label. Manufacturers may design their equipment to display 
any additional information they wish beyond what we require.

Other Matters

1. Testing
    29. We tentatively concluded in the NPRM that software defined 
radio technology has not matured to the point where it is possible to 
predict the radio frequency characteristics of a radio from either the 
hardware or software alone. Therefore, we proposed that each 
combination of hardware and software that a radio supports should be 
tested because it is the only way to ensure that equipment complies 
with the technical standards in our rules to prevent interference and 
to protect users from excessive RF radiation. We anticipated that 
testing each hardware/software combination that will be used in a 
software defined radio would be no more burdensome than testing each 
mode in which a radio operates, which is the existing process.
    30. As proposed, we will require that software defined radios be 
tested for compliance with each software application under which the 
radio will operate. Except as provided below, where the hardware 
portion of the software defined radio can support multiple software 
applications, we will not require that the device be tested

[[Page 50838]]

with combinations of software. We find no reason to believe that the 
presence of additional compliant software applications in the radio 
would affect the radio's performance or raise additional compliance 
issues. Where the radio is capable of operating with multiple software 
applications simultaneously, that is, the software defined radio can 
transmit simultaneously multiple signals or in multiple frequency 
bands, we will require that the radio be tested to ensure that the 
device complies with all applicable rules. For this case, we believe 
that additional testing is needed. For example, software defined radios 
that enable multiple simultaneous carriers could raise compliance 
issues with RF safety limits because the total output power would be 
increased or could produce intermodulation products that would result 
in emissions higher than those permitted under the rules. We anticipate 
that a relatively small number of software defined radios will have 
this capability to transmit multiple signals. We believe that this 
approach reasonably balances our need to ensure that devices comply 
with our rules and do not cause interference with the concerns 
expressed by some parties regarding burdensome testing requirements.

Certification by Telecommunication Certification Bodies (TCBs)

    31. In General Docket 98-68, 64 FR 04984, February 2, 1999, we 
established the requirements for TCBs that are allowed to approve 
equipment in the same manner as the Commission. In that proceeding, we 
stated that while we intended to use TCBs to certify a broad range of 
equipment, we found that certain functions should continue to be 
performed by the Commission. The functions included certifying new or 
unique equipment for which the rules or requirements do not exist or 
for which the application of the rules is not clear. Because software 
defined radios are a new technology and many questions about the 
application of the rules may arise, we tentatively concluded in the 
NPRM that TCBs should not be permitted to certify software defined 
radios or approve permissive changes to software defined radios for at 
least six months after the effective date of final rules adopted in 
this proceeding.
    32. We believe that six months is a reasonable minimum time period 
to allow the Commission to gain experience with software defined radios 
and determine whether TCBs should be permitted to certify them. As the 
SDR Forum noted, we proposed six months only as a marker for 
reassessment and may extend the time period if necessary. Accordingly, 
TCBs will not be permitted to certify software defined radios until at 
least six months after the effective date of the rules adopted in this 
proceeding. The Chief of the Office of Engineering and Technology 
acting under the existing delegated authority will determine when TCBs 
may certify software defined radios and will announce this decision by 
public notice.

Enforcement

    33. We recognized in the NPRM that a non-compliant software defined 
radio has the potential to interfere with other radio services due to 
its potential to operate in multiple frequency bands. We requested 
comments on whether we should enhance our enforcement capabilities due 
to the development of software defined radios and what particular 
changes we should make.
    34. We are not planning to increase our enforcement capabilities 
specifically for software defined radios because we have no reason at 
this time to expect significant compliance problems. However, we note 
that more of the routine application processing that has previously 
been handled by the Commission is now being performed by TCBs. This 
shifting of the workload will free up resources at our Laboratory that 
can be used to increase post-market surveillance on all types of 
equipment, including software defined radios. We cannot increase the 
maximum fines that may be issued for non-compliant equipment because 
they are limited by statute. We will carefully assess the deployment of 
software defined radios in the market to determine whether any 
increased enforcement efforts are warranted and, if appropriate, 
whether other actions such as a faster revocation procedure for the 
authorizations of non-compliant software defined radios may be 
necessary.

Final Regulatory Flexibility Analysis

    35. As required by the Regulatory Flexibility Act (RFA),\1\ an 
Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the 
Notice of Proposed Rule Making, Authorization and Use of Software 
Defined Radios.\2\ The Commission sought written public comment on the 
proposals in the Notice, including comment on the IRFA. This present 
Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.\3\
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    \1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601 et. seq., has 
been amended by the Contract With America Advancement Act of 1996, 
Public Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the 
CWAAA is the Small Business Regulatory Enforcement Fairness Act of 
1996 (SBREFA).
    \2\ See Authorization and Use of Software Defined Radios, Notice 
of Proposed Rule Making, ET Docket 00-47, 15 FCC Rcd 24442, 24462 
(2000).
    \3\ See 5 U.S.C. 604.
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A. Need for, and Objectives of, the First Report and Order

    36. We are adopting changes to our equipment authorization rules in 
this Order to facilitate the deployment of software defined radios. The 
rule changes will streamline the equipment approval process and reduce 
the burden on applicants by eliminating the need to file a complete new 
application and physically re-label equipment when changes are made to 
the frequency, modulation type or output power of a software defined 
radio. In a software defined radio, functions that were carried out by 
hardware in the past are performed by software. This means that the 
operating parameters of the radio, such as the frequency and type of 
modulation, could be readily changed in the field. The rules previously 
required a complete new application and a new identification number on 
a permanently affixed label when changes to these operating parameters 
were made. The previous requirements could have discouraged the 
deployment of software defined radios to consumers.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    37. No comments were submitted directly in response to the IRFA. In 
addition, we have carefully examined all comments filed in response to 
the Notice and have determined that none specifically address the 
effect of the proposed rules on small entities.

C. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply

    38. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, herein adopted.\4\ The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' \5\ In addition, the term ``small 
business'' has the same meaning as the term ``small business concern'' 
under the Small Business Act.\6\ A small business concern

[[Page 50839]]

is one which: (1) Is independently owned and operated; (2) is not 
dominant in its field of operation; and (3) satisfies any additional 
criteria established by the SBA.\7\
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    \4\ 5 U.S.C. 603(b)(3).
    \5\ Id. 601(6).
    \6\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in 15 U.S.C. 632). Pursuant to the 
RFA, the statutory definition of a small business applies ``unless 
an agency, after consultation with the Office of Advocacy of the 
Small Business Administration and after opportunity for public 
comment, establishes one or more definitions of such term which are 
appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.'' 5 U.S.C. 601(3).
    \7\ Small Business Act, 15 U.S.C. 632 (1996).
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    39. The Commission has not developed a definition of small entities 
specifically applicable to Radio Frequency Equipment Manufacturers (RF 
Manufacturers). Therefore, the applicable definition of small entity is 
the definition under the SBA rules applicable to manufacturers of 
``Radio and Television Broadcasting and Communications Equipment.'' 
According to the SBA's regulation, an RF manufacturer must have 750 or 
fewer employees in order to qualify as a small business.\8\ Census 
Bureau data indicates that there are 858 companies in the United States 
that manufacture radio and television broadcasting and communications 
equipment, and that 778 of these firms have fewer than 750 employees 
and would be classified as small entities.\9\ We believe that many of 
the companies that manufacture RF equipment may qualify as small 
entities.
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    \8\ See 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 3663.
    \9\ See U.S. Department of Commerce, 1992 Census of 
Transportation, Communications and Utilities (issued May 1995), SIC 
category 3663.
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D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    40. We are establishing a new class of ``permissive change'' for 
software defined radios when changes are made to the software that 
affect the frequency, power or type of modulation. This class of change 
will require the manufacturer to submit a description of the software 
changes to the FCC or a designated Telecommunications Certification 
Body (TCB). The manufacturer will also be required to submit test data 
showing that the radio complies with the technical standards in our 
rules with the new software loaded. The new software cannot be loaded 
into radios until the FCC or TCB notifies the manufacturer that the 
changes are acceptable. The original FCC identification number for the 
equipment can continue to be used, so no re-labeling is required.\10\
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    \10\ See Order at para. 14.
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    41. We are also allowing an ``electronic label'' to be used on 
software defined radio transmitters as an alternative to the 
permanently affixed label the rules require for other types of devices. 
The equipment can display the FCC identification number by means of a 
liquid crystal display or similar screen.\11\
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    \11\ See Order at para. 35. -
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    42. We are requiring manufacturers to take steps to ensure that 
only software that has been approved by the FCC or a TCB can be loaded 
into a transmitter. The software must not allow the user to operate the 
transmitter with frequencies, output power, modulation types or other 
parameters outside of those that were approved. Manufacturers may use 
authentication codes or any other means to meet these requirements, and 
must describe the methods in their application for equipment 
authorization.\12\
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    \12\ See Order at para. 32.
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E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    43. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.\13\
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    \13\ See 5 U.S.C. 603(c).
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    44. The rules adopted in this proceeding apply equally to all 
entities, including small entities. The rules streamline the approval 
process for changes to the operating parameters of software defined 
radios and give additional flexibility to manufacturers by permitting 
equipment to be labeled electronically instead of with a physical 
label. The benefits of these streamlined rules are granted to all 
entities in the same way, including small entities. There is no adverse 
impact on any entities large or small.\14\
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    \14\ This proceeding, therefore, may also be ``certified'' under 
the RFA. See 5 U.S.C. 605(b).
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    45. A significant alternative we considered but rejected, which if 
adopted might have slightly reduced the burden on small entities, is to 
allow software changes to be approved under the Declaration of 
Conformity (DoC) procedure. DoC is a self-approval procedure in which 
the manufacturer has the equipment tested for compliance at an 
accredited laboratory. Once the equipment has been found to comply, it 
may be marketed without any approval from the FCC or a TCB. Although 
this alternative might have reduced the burden on small entities, we 
declined to adopt it because we believe that software defined radio 
transmitters require a higher level of oversight to ensure that they 
comply with the rules to prevent interference and protect users from 
excessive RF radiation. Certain radio transmitters are already 
permitted to be self-approved, and we are not making any change in the 
authorization requirements for them.
    46. Even though the rules adopted in this First Report and Order 
affect all entities, including small entities, equally and confer the 
same benefits upon all entities, including small entities, we note that 
software defined radio is an evolving technology. If issues 
particularly involving smaller entities arise, these will be examined 
when we revisit this area in future proceedings. On careful reflection, 
we note that no commenter stated that any rule adopted herein impacts 
small entities in a manner different from larger entities.
    47. Report to Congress: The Commission will send a copy of the 
First Report and Order, including this FRFA, in a report to be sent to 
Congress pursuant to the Congressional Review Act, see 5 U.S.C. 
801(a)(1)(A). In addition, the Commission will send a copy of the First 
Report and Order, including FRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration.

Ordering Clauses

    48. Parts 1 and 2 of the Commission's Rules and Regulations are 
amended, February 4, 2002. Authority for issuance of this First Report 
and Order is contained in Sections 4(i), 301, 302, 303(e), 303(f), 
303(r), 304, 307 and 332(b) of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 301, 302, 303(e), 303(f), 303(r), 304, 307 
and 332(b).

List of Subjects

47 CFR Part 1

    Administrative practice and procedure.

47 CFR Part 2

    Communications equipment, Radio.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rules Changes

    For the reasons discussed in parts 1 and 2 of title 47 of the Code 
of Federal Regulations are amended as follows:

[[Page 50840]]

PART 1--PRACTICE AND PROCEDURE

    1. The authority citation for part 1 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309.


    2. Section 1.1103 is amended by adding a new entry to the table to 
read as follows:


Sec. 1.1103  Schedule of charges for equipment approval, experimental 
radio services, and international telecommunications settlements.

----------------------------------------------------------------------------------------------------------------
                                                                Fee
               Action                     FCC Form No.        amount   Payment type code          Address
----------------------------------------------------------------------------------------------------------------
1. Certification:
 
*                  *                  *                  *                  *                  *
                                                        *
    f. Class III permissive changes  Electronic 731 &             495  ECC                Federal Communications
                                      Electronic or Paper                                  Commission, Equipment
                                      159.                                                 Approval Services,
                                                                                           P.O. Box 358315,
                                                                                           Pittsburgh, PA 15251-
                                                                                           5315.
 
*                  *                  *                  *                  *                  *
                                                        *
----------------------------------------------------------------------------------------------------------------

PART 2--FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL 
RULES AND REGULATIONS

    3. The authority citation for part 2 continues to read as follows:

    Authority: 47 U.S.C. 154, 302a, 303, and 336, unless otherwise 
noted.

    4. Section 2.1 is amended by adding the following definition in 
alphabetical order to read as follows:


Sec. 2.1  Terms and definitions.

* * * * *
    (c) * * *
    Software defined radio. A radio that includes a transmitter in 
which the operating parameters of frequency range, modulation type or 
maximum output power (either radiated or conducted) can be altered by 
making a change in software without making any changes to hardware 
components that affect the radio frequency emissions.
* * * * *
    5. Section 2.925 is amended by re-designating paragraphs (e) and 
(f) as (f) and (g), respectively, and by adding a new paragraph (e) to 
read as follows:


Sec. 2.925  Identification of equipment.

* * * * *
    (e) A software defined radio may be equipped with a means such as a 
user display screen to display the FCC identification number normally 
contained in the nameplate or label. The information must be readily 
accessible, and the user manual must describe how to access the 
electronic display.
* * * * *

    6. Section 2.932 is amended by adding paragraph (e) to read as 
follows:


Sec. 2.932  Modification of equipment.

* * * * *
    (e) Manufacturers must take steps to ensure that only software that 
has been approved with a software defined radio can be loaded into such 
a radio. The software must not allow the user to operate the 
transmitter with frequencies, output power, modulation types or other 
parameters outside of those that were approved. Manufacturers may use 
authentication codes or any other means to meet these requirements, and 
must describe the methods in their application for equipment 
authorization.

    7. Section 2.944 is added to read as follows:


Sec. 2.944  Submission of radio software.

    The grantee or other party responsible for compliance of a software 
defined radio, or the applicant for authorization of a software defined 
radio shall submit a copy of the software that controls the radio 
frequency operating parameters upon request by the Commission. Failure 
to comply with such a request within 14 days or such additional time as 
the Commission may allow may be cause for denial of authorization, 
forfeiture pursuant to Sec. 1.80 of this chapter, or other 
administrative sanctions.

    8. Section 2.1043 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec. 2.1043  Changes in certificated equipment.

    (a) Except as provided in paragraph (b)(3) of this section, changes 
to the basic frequency determining and stabilizing circuitry (including 
clock or data rates), frequency multiplication stages, basic modulator 
circuit or maximum power or field strength ratings shall not be 
performed without application for and authorization of a new grant of 
certification. Variations in electrical or mechanical construction, 
other than these indicated items, are permitted provided the variations 
either do not affect the characteristics required to be reported to the 
Commission or the variations are made in compliance with the other 
provisions of this section. Changes to the software installed in a 
transmitter that do not affect the radio frequency emissions do not 
require a filing with the Commission and may be made by parties other 
than the holder of the grant of certification.
    (b) Three classes of permissive changes may be made in certificated 
equipment without requiring a new application for and grant of 
certification. None of the classes of changes shall result in a change 
in identification.
    (1) A Class I permissive change includes those modifications in the 
equipment which do not degrade the characteristics reported by the 
manufacturer and accepted by the Commission when certification is 
granted. No filing with the Commission is required for a Class I 
permissive change.
    (2) A Class II permissive change includes those modifications which 
degrade the performance characteristics as reported to the Commission 
at the time of the initial certification. Such degraded performance 
must still meet the minimum requirements of the applicable rules. When 
a Class II permissive change is made by the grantee, the grantee shall 
supply the Commission with complete information and the results of 
tests of the characteristics affected by such change. The modified 
equipment shall not be marketed under the existing grant of 
certification prior to acknowledgement by the Commission that the 
change is acceptable.
    (3) A Class III permissive change includes modifications to the 
software of a software defined radio transmitter that change the 
frequency, modulation type, output power or maximum field

[[Page 50841]]

strength outside the parameters previously approved. When a Class III 
permissive change is made, the grantee shall supply the Commission with 
a description of the changes and test results showing that the 
equipment complies with the applicable rules with the new software 
loaded, including compliance with the applicable RF exposure 
requirements. The modified software shall not be loaded into equipment, 
and the equipment shall not be marketed with the modified software 
under the existing grant of certification, prior to acknowledgement by 
the Commission that the change is acceptable. A copy of the software 
shall be submitted to the Commission upon request. Class III changes 
are permitted only for equipment in which no Class II changes have been 
made from the originally approved device.

    Note to paragraph (b)(3): Any software change that degrades 
spurious and out-of-band emissions previously reported to the 
Commission at the time of initial certification would be considered 
a change in frequency or modulation and would require a Class III 
permissive change or new equipment authorization application.

    (4) Class I and Class II permissive changes may only be made by the 
holder of the grant of certification, except as specified below.
* * * * *
[FR Doc. 01-24953 Filed 10-4-01; 8:45 am]
BILLING CODE 6712-01-P