On May 23, 2017, the Federal Communications Commission (FCC) issued an Order and Consent Decree, imposing a steep fine and other penalties on a manufacturer and distributor of radio frequency (RF) devices that failed to comply with the FCC’s testing and authorization rules before marketing its product. The devices reportedly caused interference to radio transmissions, which resulted in the FCC conducting an investigation of the manufacturer.
After the manufacturer fixed the interference problem and proactively complied with the FCC’s RF equipment rules, the FCC agreed to a consent decree to resolve the case. Specifically, the FCC agreed to terminate the investigation in exchange for the manufacturer agreeing to pay $90,000 to the U.S. Treasury and implement a strict compliance program.
FCC Could Ban Non-Compliant RFID Suppliers from Selling Their Products
The FCC also issued a threat to future RF equipment manufacturers and other responsible parties that market unauthorized equipment. Specifically, the FCC asserted its authority to conduct hearings and declare non-compliant RF equipment suppliers unqualified to hold any type of FCC authorization.
This is a critically important development that affects RFID equipment manufacturers and vendors. Because virtually all devices that generate RF energy (including RFID readers and tags) are subject to FCC rules, this case underscores the importance of RFID suppliers ensuring full compliance with FCC rules prior to marketing their equipment.
FCC Compliance Requirements for RFID Suppliers
RFID operations are regulated under Part 15 of the FCC’s rules for low-power devices. Because RFID devices transmit radio waves, they are classified by the FCC as “intentional radiators.” The FCC’s rules require that an intentional radiator be authorized via the certification process. A certification is issued by an FCC-authorized Telecommunications Certification Body (TCB) based on representations and test data submitted by the applicant. Any entity seeking to obtain certification of an RF device must comply with the following procedures:
First, the responsible party must obtain an FCC Registration Number (FRN). An FRN, which is required of all entities that do business with the FCC, is available for free by registering via the FCC’s website.
Second, an FCC Grantee Code must be procured. A Grantee Code is a three- or five-digit code used to designate the manufacturer or other responsible party (referred to as the “grantee”) for certified RF devices. A Grantee Code may be obtained by an online application through the FCC’s website.
Third, a permissible operating frequency for the device must be chosen, and then a production-ready device should be sent to an FCC-accredited laboratory for testing, in order to ensure compliance with the applicable FCC rules. After testing is complete, the test results and a certification application are submitted to a TCB for review and determination as to whether certification will be granted.
FCC Penalties for Non-Compliance
The party applying for and receiving certification—typically the manufacturer, vendor or importer—is the party responsible for ensuring initial compliance with the FCC’s requirements. Historically, if an intentional radiator is marketed or operated without proper certification or is otherwise in violation of the FCC’s rules, the responsible party could be subject to substantial monetary forfeitures or having its equipment ordered off the market by the FCC.
Today’s FCC ruling adds an extra layer of enforcement concern. By stating, on the record, that it could disqualify non-compliant RF equipment suppliers from obtaining equipment certifications, the FCC is threatening to prevent those suppliers from ever legally marketing their products in the United States.
Post-Market Surveillance of RFID Equipment
It is critical for RFID suppliers to take steps to ensure continued compliance once their products are on the market, even if they were properly certified. FCC rules require TCBs to conduct post-market surveillance on at least five percent of the RF equipment they have certified.
This surveillance is intended to ensure that marketed RF equipment conforms to the technical parameters of the equipment that was tested and authorized. TCBs conduct surveillance by obtaining sample RF devices on the market, measuring the characteristics, and comparing them to the characteristics of the prototypes that were authorized. Responsible parties whose RF devices are under surveillance must, upon request, provide the investigating TCB with a sample RF device or vouchers to purchase any sample device it wishes in order to conduct the surveillance.
Adopt Best Practices to Mitigate Chances of Rule Violations
FCC rule compliance is more important than ever. RFID suppliers would be well advised to work with experienced professionals who understand the FCC rules, in order to evaluate the risks of FCC rule violations and what they could mean to the company. Savvy RFID suppliers have best practices guides that are very useful in mitigating the risk of FCC rule violations.
IoT attorney Ronald E. “Ron” Quirk is the head of the Internet of Things & Connected Devices Practice Group at Marashlian & Donahue PLLC, The CommLaw Group, where he focuses his practice on assisting clients with legal and regulatory issues in the ever-changing Internet of Things industry, including taxation, contract review and negotiation, privacy and data security, spectrum access, equipment authorization and marketing, risk assessment and compliance planning, and federal and state enforcement proceedings. His career has spanned more than 20 years, including several years at AMLAW 100 firms and the FCC. He can be reached at [email protected] or +1 (703) 714-1305. Ron recently published the “Global Guide to Radiofrequency Equipment Authorization,” detailing what you need to know to ensure that your RF devices are compliant with applicable regulations before bringing them to market in the United States and internationally. This guide is available at RFID Journal’s online store.