[Federal Register Volume 86, Number 7 (Tuesday, January 12, 2021)]
[Proposed Rules]
[Pages 2337-2344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28906]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 2 and 95

[ET Docket No. 20-382; FCC 20-180; FRS 17351]


Allowing Earlier Equipment Marketing and Importation 
Opportunities

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission proposes to update its radiofrequency (RF) 
device marketing and importation rules in order to allow equipment 
manufacturers to better gauge consumer interest and prepare for new 
product launches. In particular, the Commission proposes limited 
exceptions to its requirement that RF devices receive equipment 
authorization prior to marketing in or importation to the United States 
and it seeks comment on the conditions necessary to ensure that parties 
who utilize such exceptions ultimately bring such devices into full 
compliance with the Commission's equipment authorization rules.

DATES: Comments are due February 11, 2021. Reply comments are due 
February 26, 2021.

FOR FURTHER INFORMATION CONTACT: Brian Butler, Office of Engineering 
and Technology, 202-418-2702, [email protected], or Thomas Struble 
at 202-418-2470 or [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), FCC 20-180, ET Docket No. 20-382, 
adopted December 10, 2020, and released December 10, 2020. The full 
text of this document is available for public inspection and can be 
downloaded at: https://www.fcc.gov/document/fcc-proposes-rules-expedite-release-new-devices-and-technologies-0 or by using the search 
function for ET Docket No. 20-382 on the Commission's ECFS web page at 
www.fcc.gov/ecfs.

Synopsis

    1. Discussion. In June 2020 CTA filed a petition seeking 
modification of the equipment authorization rules pertaining to the 
marketing and importation of radiofrequency devices. An FCC-issued 
Public Notice seeking comment on CTA's petition yielded eight comments 
and two reply comments. The Commission took this record into 
consideration when it issued this rulemaking proposal. The Commission 
observed that the existing rules often limit the ability of device 
manufacturers to market and import radiofrequency devices in the most 
efficient and cost-effective manner and proposed specific rule changes 
that would allow device manufacturers to take full advantage of modern 
marketing and importation practices. Specifically, the proposals relate 
to the marketing and importation of radiofrequency devices. Although 
CTA also asked the Commission to grant a rule waiver to permit 
conditional sales to consumers during the pendency of the rulemaking 
proceeding and other parties asked for similar action, the Commission 
determined that an interim waiver was not warranted in this case. The 
Commission notes that it would need to consider several complex issues 
before allowing conditional sales of radiofrequency devices, or 
additional imports of radiofrequency devices, prior to the receipt of 
equipment authorization.
    2. The Commission's equipment authorization rules are based on 
Section 302 of the Communications Act of 1934, as amended (the Act), 47 
U.S.C. 302a, which gives the Commission authority to make reasonable 
regulations governing the interference potential of devices that emit 
radiofrequency energy and can cause harm to consumers or

[[Page 2338]]

other radio operations. The Commission uses the equipment authorization 
program, codified in Part 2 of its rules, 47 CFR part 2, to ensure that 
radiofrequency devices comply with its technical and equipment 
authorization requirements before they can be marketed in or imported 
to the United States. There are two different approval procedures for 
equipment authorization--Certification and Supplier's Declaration of 
Conformity (SDoC). Certification, the most rigorous approval process 
for radiofrequency devices, results in an equipment authorization 
issued by an FCC-recognized Telecommunication Certification Body (TCB) 
based on an evaluation of the supporting documentation and test data 
submitted to the TCB. SDoC is a procedure that requires the party 
responsible for compliance (who must be located in the United States) 
to ensure that the equipment complies with the appropriate technical 
standards. Unlike with Certification, equipment authorized under the 
SDoC procedure is not listed in a Commission database.
    3. Subpart I of part 2 of the Commission's rules sets out the 
conditions under which radiofrequency devices that are capable of 
causing harm to consumers or other radio operations may be marketed in 
the United States. Marketing is broadly defined to include ``sale or 
lease, or offering for sale or lease, including advertising for sale or 
lease, or importation, shipment, or distribution for the purpose of 
selling or leasing or offering for sale or lease.'' 47 CFR 2.803(a). In 
general, parties may not market radiofrequency devices unless the 
devices have been properly authorized or otherwise comply with all 
applicable technical, labeling, identification, and administrative 
requirements. 47 CFR 2.803(b). An existing limited exception permits 
conditional sales contracts--that is, sales whereby the actual delivery 
of the product to the buyer is postponed--to wholesalers and retailers. 
The Commission proposes to modernize its rules to also allow 
conditional sales, but not delivery, of radiofrequency devices to 
consumers prior to authorization.
    4. The Commission expresses belief that the marketplace and the 
consumer experience have changed such that there is good reason to 
modify the rules to allow for some conditional sales. These reasons 
include that such sales would allow manufacturers to better gauge 
consumer interest and demand, would improve supply-chain management and 
thus reduce waste, and would support the highly competitive 
communications market where the development and life cycles of new 
devices are short. The Commission further recognizes that the its 
proposal has the potential to better align its processes with popular 
consumer expectations and noted CTA's claim that pre-ordering consumer 
goods has become commonplace. The Commission seeks comment on its 
observations and asks whether there are other benefits or risks 
associated with the proposed marketing rule that it had not identified. 
The Commission asks if expanding the scope of marketing to include 
conditional sales of radiofrequency devices directly to consumers would 
yield the anticipated benefits for industry and consumers and whether 
there are other actions the FCC could take that would more effectively 
meet its objective.
    5. The Commission also recognizes the continuing importance of 
ensuring that unauthorized radiofrequency devices do not reach 
consumers where they could potentially cause harm. As a fundamental 
matter, the Commission proposes to prohibit the delivery of 
radiofrequency devices to consumers prior to authorization. The 
Commission notes that its rules are designed to prevent the sale and 
operation of non-compliant devices, and that manufacturers and vendors 
who market and deliver non-compliant devices to purchasers in the 
United States, as well as domestic consumers who operate non-compliant 
devices, can be held liable for violating these rules.
    6. The Commission seeks comment on whether there are additional 
safeguards that it should implement. Are there certain types of devices 
for which conditional sales to consumers would not be appropriate? 
These could include devices designed to operate in particular frequency 
bands where extensive pre-operation coordination is required; equipment 
designed for commercial operation that could pose a greater risk of 
harmful interference or harm to persons if not installed properly; and 
medical or other equipment that require review or approval by other 
regulatory bodies. How can the Commission prevent devices that have no 
likelihood of being approved from being marketed? Should equipment that 
could only operate under a Commission waiver be prohibited from 
marketing prior to a waiver being granted? The Commission recognizes 
that certain types of devices are used to ensure the safety of life and 
property on board ships and aircraft. Should the Commission exclude 
those types of devices? If not, the Commission notes that certain rules 
in parts 80, 87, and 95 of the Commission's rules may need to be 
adjusted and proposed to revise these rules accordingly. To this end, 
the Commission identifies Section 95.391, 47 CFR 95.391, and seeks 
comment on whether other rules, such as those provided under Sections 
80.1061, 87.147, and 95.2991, 47 CFR 80.1061, 87.147, and 95.2991, 
would also need to be revised or clarified. The Commission asks whether 
there are other specific devices subject to certain rules that might 
also need to be excluded and directed commenters to be specific in 
detailing which rules and what types of equipment would be implicated, 
and why these would need to be treated differently.
    7. The Commission's proposed rule would require the prospective 
buyer to be advised at the time of marketing the conditional sale that 
the equipment is subject to the Commission's rules and delivery to the 
buyer is contingent upon compliance with the applicable equipment 
authorization and technical requirements. The Commission asks whether 
it should require the seller to make additional disclosures throughout 
the marketing and sales process, including up to the time of delivery, 
noting that TechFreedom had suggested that the Commission require any 
seller to display specific language warning potential customers that 
they are pre-ordering a device that is not yet certified under the 
Commission's rules, and it ultimately may never be delivered. The 
Commission proposes that sellers should be required to prominently 
display language clarifying the conditional nature of a sale at the 
time of offer, as set forth in the proposed rules.
    8. The Commission asks whether there are other disclosures that 
sellers should make when marketing radiofrequency devices to consumers 
prior to equipment authorization. Should the Commission require sellers 
to provide information on how to seek a refund in the event the device 
does not receive authorization? If so, how should the seller provide 
this information? How would consumers be notified that authorization 
was not granted, and that the devices will not be delivered? What 
records of such notice are needed? Should the Commission require online 
marketplaces to ensure all advertisements of devices marketed through 
conditional sales include the required disclosures? If unique 
identifying information (e.g., model numbers, expected FCC ID) is known 
at the time of marketing, should the Commission require that 
information to be disclosed in online advertisements?
    9. The Commission asks if it should require manufacturers to 
include a label on device packaging noting that it shall not be 
delivered to consumers prior to

[[Page 2339]]

obtaining equipment authorization and, if so, how it should implement 
this requirement as any such label notice would only have temporary 
applicability. The Commission asks what information should be included 
on the label and whether there are other steps the Commission could 
take to ensure that all parties are fully aware that device delivery is 
prohibited prior to authorization.
    10. The Commission asks if it should impose particular 
recordkeeping requirements on the manufacturer so that such equipment 
can be accounted for if equipment authorization is ultimately not 
granted or enforcement action needs to be taken. If so, the Commission 
proposes to require that the manufacturer retain these records and 
provide them to the Commission upon request; it further asks what time 
period would be appropriate. The Commission also asks if the seller 
should be required to provide the Commission with a monthly update on 
the number of units pre-ordered, and what requirements for maintaining 
a designated agent or point of contact based in the United States would 
be appropriate.
    11. The Commission asks what effect its proposal might have on its 
enforcement activities. Acknowledging that its proposal could lead to 
situations that might upset consumers' expectations, the Commission 
asks what scenarios could cause problems and seeks comment on whether 
it should adopt specific rules to address any potential harms that may 
result from allowing conditional sales of radiofrequency devices to 
consumers. For example, if equipment authorization is not granted, what 
actions should be required of the manufacturer to ensure that 
unauthorized equipment is not made available to consumers? If an 
unauthorized device is delivered to a consumer prior to receipt of the 
equipment authorization, what are the appropriate sanctions? What 
should the base forfeiture be for such violations? Should the 
forfeiture be based on the number of unauthorized units that are 
delivered? Should the Commission deny future equipment authorization 
applications from grantees who deliver unauthorized devices to 
consumers, either directly or indirectly through a third-party 
retailer? Should the Commission require additional protections to 
prevent potential harm from online vendors or from overseas vendors? 
What would those protections look like? If a manufacturer delivers a 
device that has failed to receive authorization, should domestic 
consumers who operate the non-compliant device be liable for violating 
the Commission's rules? The Commission seeks comment on these questions 
as well as any other enforcement measures that may be appropriate.
    12. The Commission seeks comment on the government's role when a 
conditionally sold radiofrequency device cannot be delivered and 
consumers may be entitled to a refund or similar remedy under the sales 
agreement. The Commission asks if there were actions it could take to 
set appropriate consumer expectations, direct consumers to appropriate 
resources, and avoid becoming overwhelmed with general questions and 
complaints for which other agencies or entities may be a more 
appropriate contact. Should sellers make additional product and contact 
information readily available--such as on their websites or that of a 
relevant industry trade group (such as CTA), or as a specific 
disclosure to the Commission--to make it easier to identify what a 
caller is talking about and where they should direct their concerns? 
The Commission asks about the role of the Federal Trade Commission, 
state attorneys general, or other enforcement entities outside of the 
Commission in providing consumer relief. Are these the best authorities 
for redressing potential consumer injuries from conditional sales of 
radiofrequency devices? How should the information about these 
authorities be provided to consumers? What role, if any, should the 
Commission have in providing this information to consumers? What role, 
if any, should the Commission have in assisting other official bodies 
in seeking redress for consumers? Should the Commission make contact 
information available on its website to identify where consumers should 
direct their concerns? The Commission tentatively concludes that 
adequate remedies exist for contractual and similar harms that are 
external to the Commission and seeks comment on this observation. The 
Commission asks if it should establish a memorandum of understanding 
with the Federal Trade Commission to share information on potential 
violations or best practices in this area, as it has done in the past 
to facilitate coordination on issues that span multiple jurisdictions.
    13. The Commission notes that its proposed rule would retain the 
existing reference to ``manufacturers'' entering into conditional sales 
contracts, but seeks comment on CTA's request that, ``[t]o the extent 
entities become responsible for a device's FCC compliance, those 
`responsible parties' also should be permitted to engage in conditional 
sales with consumers.'' The Commission recognizes that 
``manufacturers'' may be too limiting for the wide range of creators 
and innovators who are likely to take advantage of conditional sales of 
radiofrequency devices to consumers, but was not sure that CTA's 
suggested addition of ``responsible parties, as defined in Section 
2.909 [of the Commission's rules]'' was the most appropriate way to 
expand the scope of the exemption because that rule addresses the chain 
of responsibility for the equipment authorization process. For certain 
conditional sales situations, such as the beginning stages of a 
Kickstarter campaign, the seller may neither be a ``manufacturer'' nor 
a ``responsible party'' for purposes of the Commission's Part 2 rules; 
indeed, for equipment in the conceptual stage, the seller may not have 
even begun the equipment authorization process. The Commission asks how 
it should account for such sellers. Alternately, are there benefits or 
risks to retaining the existing limitation to manufacturers? Would 
doing so, for example, help ensure that unauthorized and non-compliant 
radiofrequency devices do not make their way to consumers and cause 
harm?
    14. The Commission did not propose to change Section 
2.803(c)(2)(ii), 47 CFR 2.803(c)(2)(ii), as CTA suggested in its 
petition. The Commission states that that this is a separate provision 
that allows limited marketing, in the form of sales, to a narrow class 
of specialized entities and that it explicitly prohibits the offering 
for sale to other parties or to end users located in a residential 
environment. The Commission states that it did not believe it would be 
necessary to change this portion of the rule to satisfy its discrete 
objective and that doing so might actually eliminate an important 
avenue for limited marketing that exists outside the conditional sales 
contract context. The Commission seeks comment on this conclusion. The 
Commission also notes that CTA proposed replacing this section with 
language that would allow manufacturers to enter into contracts for 
importation and preparatory activities prior to sale. The Commission 
states that it did not believe that such activities constitute 
``marketing'' that would be prohibited if not explicitly permitted 
under the conditional sales contract rule, but seeks comment from 
parties that might hold a different view.
    15. Finally, the Commission asks about the relative costs and 
benefits of its proposal to modify the marketing rule. Can the benefits 
of allowing conditional sales of radiofrequency devices be quantified 
in terms of cost savings to equipment developers and manufacturers? How 
would this rule

[[Page 2340]]

change affect the development time for devices and how long it takes to 
get new innovative devices to market? How should conditional sales of 
goods and services pre-sold in other contexts inform the Commission's 
analysis of conditional sales for radiofrequency devices? The 
Commission encourages commenters to provide data on how common 
conditional sales are and, to the extent possible, quantify the 
benefits such conditional sales yield for both industry and consumers. 
What would be the costs and benefits of expanding conditional sales 
beyond manufacturers to include a broader class of responsible parties? 
What would be the costs and benefits of the proposals for record 
keeping of authorized and unauthorized equipment? How often do crowd-
funding campaigns, like those on Kickstarter and other platforms, 
result in technology products being delivered to consumers? What are 
the average refund rates for unsuccessful crowd-funding or pre-sale 
events featuring a technology product that is ultimately not brought to 
market?
    16. Subpart K of part 2 of the Commission's rules sets out the 
conditions under which radiofrequency devices may be imported into the 
United States. These rules are designed to provide assurance that 
radiofrequency devices brought into the United States comply with the 
technical standards that the Commission has developed to minimize the 
potential for harm to consumers or other radio operations. These rules 
also recognize narrowly defined conditions where equipment that has not 
completed the Commission's equipment authorization process nevertheless 
may be imported under controlled circumstances, such as for compliance 
testing, repair, or use by the Federal government. The Commission 
proposes to allow a limited number of radiofrequency devices subject to 
Certification to be imported into the United States prior to equipment 
authorization for pre-sale activities, including imaging, packaging, 
and delivery to retail locations, by adding a new condition under which 
limited quantities of radiofrequency devices are permitted to be 
imported. The Commission states that the proposal would allow device 
manufacturers to better prepare for new product launches while guarding 
against the proliferation of unauthorized and non-compliant devices 
that might increase the risk of causing harm to consumers or other 
radio operations.
    17. The Commission states that it believes that its proposal could 
provide substantial benefits to device manufacturers and retailers that 
operate in a marketplace characterized by out-of-country production of 
many radiofrequency devices, shortened product cycles, and the 
importance of quickly familiarizing consumers with new electronic 
devices. The Commission says the proposed change would allow consumers 
to see and examine devices more quickly to allow them to make more 
timely purchase decisions and will assist sales associates who need to 
become familiar with the features associated with mobile 5G devices, 
Internet of Things devices, and augmented reality and virtual reality 
devices once those devices are Certified and may be operated. 
Facilitating an accelerated rollout of such devices, the Commission 
asserted, is an important way to maintain the United States' global 
leadership in these industries.
    18. The Commission states that it must continue to protect against 
the possibility of unauthorized devices making their way to consumers 
and causing harm to consumers or other radio operations. The Commission 
says that it believes that the proposal would not fundamentally change 
the general importation practice, in which the overwhelming majority of 
radiofrequency devices that are imported will satisfy the condition 
that an equipment authorization has already been obtained, and seeks 
comment on this observation. The Commission also notes that the 
proposal would only apply to devices subject to Certification, under 
which devices are subject to an authorization process that involves 
rigorous review by a TCB and listing in a Commission database, which 
should make importers well equipped to satisfy the controls placed in 
the proposed importation condition. The Commission states that there is 
no compelling reason to provide for pre-authorization importation of 
devices that are approved under SDoC, which is a self-certification 
process that gives the manufacturer substantially greater control over 
the timing of the equipment authorization process. Because the proposed 
rule would only allow for specified pre-sale activities, which 
explicitly exclude marketing and operation, the Commission asks if its 
proposed definition of pre-sale activities is appropriate. Would this 
definition of pre-sale activities conflict with other rules, including 
the proposed rule discussed above to allow marketing of devices prior 
to authorization? Are there other pre-sale activities that should be 
included or excluded? Should operation by a limited class of parties 
(such as agents of the manufacturer) be allowed or prohibited, and if 
allowed, under what circumstances and how should those parties be 
defined?
    19. The Commission states that it will need to provide additional 
safeguards as part of any final rules it adopts. The Commission first 
seeks comment on specific safeguards based on what CTA had identified 
in its petition. The Commission asks if it should limit the number of 
radiofrequency devices that can be imported for pre-sale activities to 
4,000, which would be a nationwide total as opposed to a limit on each 
shipment of devices imported into the United States. The Commission 
asks if specific controls are needed to ensure manufacturers cannot 
exceed this limit by, for example, making separate 4,000-unit shipments 
through multiple ports of entry. If so, what controls would be needed? 
The proposed rule would also codify a method to exceed this number by 
providing for written approval to be obtained from the Commission's 
Chief Engineer, which is consistent with the approach the Commission 
has taken in other situations. Should this written approval be made 
public? Would this numerical limitation, with a provision for allowing 
a greater number of devices, provide a suitable balance between meeting 
manufacturer and importer needs and limiting the number of unauthorized 
devices that may be imported under this condition? The Commission notes 
some commenters discussed the need for a larger number and asks, for 
these commenters, if 8,000 would be sufficient. The Commission also 
asks if, given that thousands of devices are granted Certification each 
year, a smaller limit would result in a meaningful reduction in the 
risk of unauthorized devices being imported. The Commission asks 
commenters addressing this matter to provide specific data to justify 
their suggested limit.
    20. The Commission seeks comment on implementing a requirement that 
manufacturers using the proposed importation exception must have a 
reasonable basis to believe authorization will be granted within 30 
days of importation. Is 30 days an appropriate length of time? Would a 
longer or shorter timeline for obtaining authorization be appropriate 
here? What does it mean for a manufacturer to have a reasonable basis 
to believe authorization will be obtained? Are there particular 
elements that must make up such determination? For example, would a 
belief that authorization will be obtained within 30 days be reasonable 
only if a manufacturer has filed an equipment authorization application 
with a TCB? Are achieving or performing other

[[Page 2341]]

milestones in the authorization process appropriate measures of 
reasonableness? Should the manufacturer be required to request 
permission in the context of the authorization application process to 
import devices under this proposed rule? Do existing Commission 
processes, like pre-approval guidance for TCBs or waiver requests, 
provide manufacturers with a sufficient general indication of timeframe 
to allow ascertainment of ``reasonable belief'' under this proposed 
rule? Should the novelty of a device or its features factor into 
whether an expectation of approval is reasonable? Should the Commission 
consider the past experience of the manufacturer in obtaining equipment 
Certifications as relevant to this determination? Would accounting for 
past experience, or lack thereof, discourage small businesses or new 
entrants from taking advantage of this new rule? The Commission also 
asks if it should require the manufacturer to document, and provide 
such documentation to the Commission upon request, the basis for its 
determination of reasonableness prior to importing the devices. If so, 
how long should the manufacturer be required to retain this 
documentation? To the extent that such documentation may be important 
for compliance and enforcement purposes, it proposed that manufacturers 
be required to maintain this information for five years and provide it 
to the Commission upon request. Would a longer or shorter timeframe be 
more appropriate for retaining this information? If so, how long should 
the information be retained and why? Finally, what consequences would 
be suitable for cases where the manufacturer's basis to believe 
authorization will be obtained cannot be considered ``reasonable,'' or 
if authorization is not obtained within 30 days (or another time 
period, if that would be more appropriate)?
    21. The Commission seeks comment on the use of a temporary device 
label and asks how such a requirement would be implemented and the 
benefits it could provide. The Commission discusses CTA's suggestion 
that the temporary labels would provide notice of the Commission's 
rules--namely, that devices cannot be displayed, operated, or sold 
prior to FCC authorization. The Commission asks what information should 
be required on these labels. Should the Commission require use of the 
specific language CTA identifies? Would such information be appropriate 
and adequate in this case? Should other information be required here, 
such as the model numbers or expected FCC IDs associated with the 
devices? Should the temporary labels indicate the administrative, 
civil, and criminal penalties that can result from unauthorized 
operation of radiofrequency devices? Should the manufacturer or 
importer be required to have a designated point of contact indicated on 
the temporary labels and, if so, should the contact be required to be 
United States-based? The Commission seeks comment on whether the 
temporary label must plainly state all of the required information on 
its face or if the use of a URL or other ``pointer'' should be allowed 
(and, if so, whether all of the required information should be allowed 
to be conveyed in that manner). The Commission also seeks comment on 
whether a labeling requirement should be used to assist consumers and 
other parties in determining whether the device has become Certified. 
Should the label contain a URL or other machine-readable ``pointer'' 
that enables retailers and end-users to verify the status of a device's 
authorization? If so, would the label need to be temporary? Are other 
labels or import documentation necessary to allow third parties to 
identify whether there is a legitimate attempt to obtain authorization 
for the otherwise unauthorized devices? Should, for example, 
manufacturers be required to maintain a database or other public-facing 
way to confirm that an authorization is being sought for the device? 
Would a temporary label make it easier for bad actors to sell 
unauthorized devices by falsely claiming their devices have received or 
are in the process of receiving authorization? Finally, if temporary 
labels include a URL or other pointer to an online website or database 
where the equipment's authorization status can be verified, would that 
reduce the chances of bad actors using such labels for fraudulent 
purposes?
    22. The Commission seeks comment on requiring manufacturers to 
maintain legal ownership of devices, even after transferring control of 
them to retailers. How would such a requirement operate in practice? 
The Commission asks whether the language contained in the proposed rule 
would be sufficient to implement this proposal. If manufacturers retain 
legal ownership of devices after they have left their direct control, 
would that provide them with adequate incentive and means to ensure 
that their devices do not cause harm to consumers or other radio 
operations? Would they be able to help remediate any harm that may 
occur? What are the primary benefits of codifying such a requirement? 
Would this make it easier for manufacturers to identify and recall 
radiofrequency devices from retailers in the event that equipment 
authorization is not obtained? Would this condition be more burdensome 
for small manufacturers than large manufacturers? How would this 
condition impact device retailers? Would it impact small retailers 
differently than large retailers? Should online retailers and brick-
and-mortar retailers be treated differently? Should foreign-based 
manufacturers be treated differently? Are manufacturers the correct 
entity here or is there a larger universe of entities to which the 
ownership provision should apply, such as importers or sellers? Should 
manufacturers be required to maintain a public-facing database of 
imports made under this proposed rule? If so, what information should 
be included in such a database? Should manufacturers otherwise be 
responsible for unauthorized devices imported under this proposed rule 
that are operated illegally?
    23. The Commission asks about requiring manufacturers to have 
processes in place to retrieve the equipment from retailers in the 
event that authorization is denied. How should such processes be 
structured? For example, should the Commission specify these processes 
or allow manufacturers to develop their own processes, provided they 
are effective in retrieving equipment from retailers in the event that 
authorization is denied? Should the Commission require manufacturers to 
maintain specific detailed records of which devices are supplied to 
which locations and/or prepare a formal plan prior to importation? If 
so, should the Commission require that these records be supplied to the 
Commission or posted to the manufacturer's website or the website of a 
relevant industry trade group (such as CTA)? How long should the 
Commission require these records to be maintained? As with other 
similar records, should the Commission require that such records be 
made available to it upon request (such as before devices may be 
imported for pre-sale activities or in the event that a device recall 
becomes necessary)? If the manufacturer is unable to obtain 
authorization for its equipment, should the Commission require the 
manufacturer to provide the Commission a report detailing its plan for 
retrieving equipment along with status reports updating the progress of 
that endeavor? If so, what information should be included in this 
report? Should the Commission require manufacturers to report the model 
and

[[Page 2342]]

serial numbers of all devices that are retrieved? When should a status 
report be required? How long should manufacturers have to complete the 
device retrieval process? Would 14 days be appropriate? Should 
manufacturers have more or less time to complete the retrieval process?
    24. The Commission recognizes that there are additional conditions 
or approaches beyond those discussed above, which were based on 
safeguards suggested by CTA, that could be appropriate to meet its 
objectives of adding a new permissible import condition while 
minimizing the potential for unauthorized and non-compliant 
radiofrequency devices to cause harm to consumers or other radio 
operations. The Commission asks whether there are conditions it should 
adopt in addition to or instead of those CTA has identified and 
encouraged commenters to identify the specific requirements that would 
be the most effective while minimizing potential burdens. For example, 
in addition to or in lieu of a strict numerical importation limit, 
should the Commission differentiate based on the nature or type of 
device? Should it exempt certain classes of equipment or equipment that 
are intended to operate in certain bands due to greater risk of harmful 
interference or harm to persons, such as U-NII devices, medical 
devices, or devices designed to operate exclusively in public safety 
bands? If so, commenters should be specific as to what equipment or 
bands should be excluded. Further, the Commission recognizes that 
certain types of devices are used to ensure the safety of life and 
property on board ships and aircraft and seeks comment on whether there 
is any reason to exclude those types of devices from its proposal. The 
Commission also notes that certain rules in Parts 80, 87, and 95 of its 
rules may need to be adjusted for purposes of streamlining the proposed 
framework, proposed to revise Section 95.391, 47 CFR 95.391, to ensure 
that its rules are consistent with the proposed framework, and seeks 
comment on whether other rules, such as Sections 80.1061, 87.147, and 
95.2991, 47 CFR 80.1061, 87.147, and 95.2991, should also be revised or 
clarified.
    25. The Commission notes that some commenters have suggested that 
it could require a remote shutdown feature for all radiofrequency 
devices imported for pre-sale activities and observed that under its 
experimental licensing rules there are specific situations in which 
licensees must either recall or disable devices at the end of an 
experiment. The Commission asks if it should adopt such a requirement 
in its final rule and, if so, whether it should apply to all types of 
radiofrequency devices or only radiofrequency devices that operate in 
accordance with particular Commission rule parts.
    26. The Commission notes that the proposed rule restricts devices 
from being displayed, offered for sale, or marketed to consumers, but 
places no limitations on where they may be sent after importation. The 
Commission asks if parties believe that this would present unwarranted 
risks for adequate control of the devices prior to authorization and, 
if so, whether the Commission should require that the devices be kept 
only at specific locations, such as distribution facilities, prior to 
authorization.
    27. Because the proposed rule modification would allow 
radiofrequency devices that are not yet Certified to be imported, the 
Commission seeks comment on how manufacturers intend to ensure that 
these devices comply with the Commission's labeling and disclosure 
requirements once authorization is obtained. The proposed rule 
incorporates CTA's suggestion that devices imported pursuant to this 
Section ``may include the expected FCC ID if obscured by the temporary 
label.'' The Commission seeks comment on whether this would be an 
effective way to ensure that a device complies with the Commission's 
rules once it receives authorization. Would there be situations where 
manufacturers would have to physically recall devices to ensure that 
they comply with the labeling and disclosure requirements associated 
with the Commission's equipment authorization rules? How could the 
Commission be confident that manufacturers take all necessary steps to 
ensure that devices imported prior to equipment authorization comply 
with the Commission's labeling and disclosure rules? What impact would 
the use of electronic labeling have on this matter?
    28. The Commission asks how enforcement of this rule should be 
structured. What penalties would be appropriate for violating any of 
the conditions attached to this rule? For example, should a 
manufacturer be barred from availing itself of this exception for 
future importations if it fails to obtain authorization for a 
radiofrequency device imported under this proposed rule? Or if it fails 
to comply with any of the labeling or reporting requirements the 
Commission might ultimately adopt? Should a manufacturer be barred from 
availing itself of this exception for future importations only if it 
fails to retrieve all devices after failing to obtain authorization for 
a radiofrequency device imported under this proposed rule? Should the 
manufacturer be subject to a penalty under Section 503 of the Act, and 
if so, what should be the base forfeiture for such violations? Are 
there other ways the Commission should structure enforcement where the 
manufacturer fails to retrieve equipment in the event an authorization 
is denied?
    29. The Commission seeks comment on this importation proposal and 
the likely costs and benefits associated with expanding the provisions 
under which radiofrequency devices may be imported to support pre-sale 
activities. Can these benefits be quantified in terms of cost savings 
to device manufacturers? How would this rule affect the time it takes 
to get new innovative devices to market? Would importing devices for 
pre-sale activities generate any other benefits or risks for industry 
or consumers? The Commission encourages commenters to provide data to 
quantify these benefits and risks. In addition, what would be the costs 
to firms in following the safeguards discussed above, such as the use 
of temporary device labels and maintaining processes to retrieve 
equipment from retailers if authorization is denied? If commenters have 
alternative proposals to reform the importation rules, what would be 
the benefits and costs?
    30. The Commission notes that its equipment authorization 
proceeding in ET Docket 15-170, which also asks questions about 
importation, remains open and active, it tentatively concluded that the 
marketing and importation changes proposed in this Notice of Proposed 
Rulemaking are sufficiently discrete that it could act on them 
independently, and seeks comment on how they might interrelate with any 
open equipment authorization matters the Commission has under 
consideration.
    31. Finally, the Commission recognizes that other agencies play an 
important role in importation matters. The Commission asks if there are 
specific actions the Commission can take in working with Customs and 
Border Protection, with which the Commission has a longstanding 
cooperative relationship, to help ensure that radiofrequency devices 
imported for pre-sale activities prior to authorization comply with all 
applicable conditions. Are there other agencies the Commission should 
work with to ensure that its importation rules operate in an effective 
and efficient manner? Are there other agencies that

[[Page 2343]]

have addressed importation issues related to products subject to 
approval that would provide a model for achieving the Commission's 
objectives?

Procedural Matters

    32. This document contains proposed new information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), we seek specific comment on how we might further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.
    33. Initial Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act, the Commission has prepared an Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on a substantial number of small entities of the 
proposals addressed in this Notice. The Full IRFA is found in Appendix 
B at https://www.fcc.gov/document/fcc-proposes-rules-expedite-release-new-devices-and-technologies-0. Written public comments are requested 
on the IRFA. These comments must be filed in accordance with the same 
filing deadlines for comments on the NPRM, and they should have a 
separate and distinct heading designating them as responses to the 
IRFA. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, will send a copy of this Notice, 
including the IRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration, in accordance with the Regulatory Flexibility 
Act.
    34. The Commission requests written public comment on the IRFA. 
Comments must be filed in accordance with the same filing deadlines as 
comments filed in response to the NPRM and must have a separate and 
distinct heading designating them as responses to the IRFA. The 
Commission's Consumer and Governmental Affairs Bureau, Reference 
Information Center, will send a copy of this Notice, including the 
IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration, in accordance with the Regulatory Flexibility Act.
    35. Ex Parte Presentations. The proceeding this Notice initiates 
shall be treated as a ``permit-but-disclose'' proceeding in accordance 
with the Commission's ex parte rules. Persons making ex parte 
presentations must file a copy of any written presentation or a 
memorandum summarizing any oral presentation within two business days 
after the presentation (unless a different deadline applicable to the 
Sunshine period applies). Persons making oral ex parte presentations 
are reminded that memoranda summarizing the presentation must (1) list 
all persons attending or otherwise participating in the meeting at 
which the ex parte presentation was made, and (2) summarize all data 
presented and arguments made during the presentation. If the 
presentation consisted in whole or in part of the presentation of data 
or arguments already reflected in the presenter's written comments, 
memoranda or other filings in the proceeding, the presenter may provide 
citations to such data or arguments in his or her prior comments, 
memoranda, or other filings (specifying the relevant page and/or 
paragraph numbers where such data or arguments can be found) in lieu of 
summarizing them in the memorandum. Documents shown or given to 
Commission staff during ex parte meetings are deemed to be written ex 
parte presentations and must be filed consistent with rule 1.1206(b). 
In proceedings governed by rule 1.49(f) or for which the Commission has 
made available a method of electronic filing, written ex parte 
presentations and memoranda summarizing oral ex parte presentations, 
and all attachments thereto, must be filed through the electronic 
comment filing system available for that proceeding, and must be filed 
in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). 
Participants in this proceeding should familiarize themselves with the 
Commission's ex parte rules.
    36. Filing Requirements. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file comments and reply comments on or before the dates indicated on 
the first page of this document. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS). See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing.
    Filings can be sent by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701. U.S. Postal Service first-class, Express, 
and Priority mail must be addressed to 45 L Street NE, Washington, DC 
20554.
     Effective March 19, 2020, and until further notice, the 
Commission no longer accepts any hand or messenger delivered filings. 
This is a temporary measure taken to help protect the health and safety 
of individuals, and to mitigate the transmission of COVID-19. See FCC 
Announces Closure of FCC Headquarters Open Window and Change in Hand-
Delivery Policy, Public Notice, DA 20-304 (March 19, 2020). https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
    37. People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).

Ordering Clauses

    38. Accordingly, it is ordered, pursuant to Sections 4(i), 201, 
302, and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i), 201, 302a, 303, that this Notice of Proposed Rulemaking is 
hereby adopted.
    39. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking, including the Initial and 
Final Regulatory Flexibility Analyses, to the Chief Counsel for 
Advocacy of the Small Business Administration.
    40. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Notice of Proposed Rulemaking, including the Initial and 
Final Regulatory Flexibility Analyses, to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

List of Subjects

47 CFR Part 2

    Frequency Allocations and Radio Treaty Matters; General Rules and 
Regulations.

[[Page 2344]]

47 CFR Part 95

    Personal Radio Services.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Proposed Rules

    For the reasons set forth in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 2 as follows:

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

0
1. The authority citation for part 2 continues to read as follows:

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

0
2. In Sec.  2.803 revise paragraph (c)(2)(i) to read as follows:


Sec.  2.803   Marketing of radio frequency devices prior to equipment 
authorization.

* * * * *
    (c) * * *
    (2) * * *
    (i) Conditional sales contracts (including agreements to produce 
new devices manufactured in accordance with designated specifications), 
and advertisements for such sales, are permitted between manufacturers 
and potential customers provided that the prospective buyer is advised 
at the time of marketing, through a prominent disclosure, that the 
equipment is subject to the FCC rules and delivery to the buyer or to 
centers of distribution is conditional upon a determination that the 
equipment complies with the applicable equipment authorization and 
technical requirements. Delivery to customers of equipment subject to 
FCC rules prior to obtaining the applicable equipment authorization and 
complying with the applicable technical requirements is prohibited.
* * * * *
0
3. Amend Sec.  2.1204 by adding paragraph (a)(11) to read as follows:


Sec.  2.1204   Import Conditions.

    (a) * * *
    (11) The radio frequency device is subject to Certification and is 
being imported in quantities of 4,000 or fewer units for pre-sale 
activity. Pre-sale activity includes packaging and delivering devices 
to retails locations, as well as loading devices with specific software 
to demonstrate specific features of the devices when displayed at 
retail locations. The devices will not be displayed, operated, offered 
for sale, marketed to consumers, or sold until proper equipment 
authorization has been obtained.
    (i) The Chief, Office of Engineering and Technology, may approve 
importation of a greater number of units in a manner otherwise 
consistent with this paragraph (11) in response to a specific request;
    (ii) This exception is only available to manufacturers for 
radiofrequency devices who have a reasonable belief that authorization 
will be granted within 30 days of importation;
    (iii) Each device imported under this exception must contain a 
temporary removable label stating: ``This device cannot be displayed, 
operated, offered for sale, marketed to consumers, or sold until FCC 
equipment authorization has been granted. Under penalty of law, this 
label may not be removed prior to the grant of FCC authorization.''
    (iv) Notwithstanding Sec.  2.926, radiofrequency devices imported 
pursuant to this paragraph (11) may include the expected FCC ID if 
obscured by the temporary label described in this section or, in the 
case of electronic displays, if it cannot be viewed prior to 
authorization.
    (v) The radiofrequency devices remain under legal ownership of the 
device manufacturer, and only possession of the device is transferred 
prior to authorization. Manufacturers must have processes in place to 
retrieve the equipment in the event that authorization is not received.
    (vi) Manufacturers must maintain, for a period of sixty (60) 
months, records identifying the recipient of devices imported for pre-
sale activities. Such records must identify the device name and product 
identifier, the quantity shipped, the date on which the device 
authorization was sought, the expected FCC ID number, and the identity 
of the recipient, including address and telephone number. The 
manufacturer must provide records maintained under this paragraph (vi) 
upon the request of Commission personnel.

PART 95--PERSONAL RADIO SERVICES

0
4. The authority citation for part 95 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 307.

0
5. Section 95.391 is revised to read as follows:


Sec.  95.391   Manufacturing, importation, and sales of non-certified 
equipment prohibited.

    No person shall manufacture, import, sell or offer for sale non-
certified equipment for the Personal Radio Services except as provided 
for in Sec.  2.803(c)(2)(i) of this chapter. See Sec.  302(b) of the 
Communications Act (47 U.S.C. 302a(b)). See also part 2, subpart I 
(Sec.  2.801 et seq.) of this chapter for rules governing marketing of 
radiofrequency devices.

[FR Doc. 2020-28906 Filed 1-11-21; 8:45 am]
BILLING CODE 6712-01-P