FCC Compliance Challenges

By Ronald E. Quirk Jr.

Purchasers of RFID interrogators should be sure their contracts guarantee the regulatory compliance of the devices and their components.

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It happens when you least expect it. You carefully evaluate the technical needs of your business, research the RFID system that fits your requirements, consult with various vendors to get the right equipment at the right price, sign the vendor contract, get ready to deploy your new network, and then...you receive a letter from the vendor stating it has stopped shipping its RFID products due to possible violations of the Federal Communications Commission's (FCC) equipment certification rules.

This scenario recently happened to customers of Applied Wireless Identifications (AWID), a manufacturer of RFID readers (interrogators). AWID has been producing quality RFID equipment for many years, but due to recent notification from a customer that some of its products may not have been FCC-compliant, AWID was forced to stop shipping and importing its equipment, pending an investigation into the potential FCC noncompliance matter (see AWID Halts Sales of RFID Readers).

AWID moved quickly to ensure FCC compliance, and has since resumed shipping some of its products (see AWID Resumes Product Shipments). This unfortunate situation that ensnared a good company like AWID and its customers, however, underscores the importance to purchasers and users of RFID equipment of ensuring that their RFID products—particularly readers and reader components—are certified and comport with FCC rules.

Because RFID devices transmit radio frequency (RF) energy and have the potential to cause harmful interference to other radio devices, they are subject to FCC regulation. Section 302(b) of the Federal Communications Act specifically prohibits the manufacturing, importation, marketing or use of any radio device that does not comply with FCC rules. The pertinent FCC rules for RFID concern RF emissions limits, power restrictions and uses of certain frequencies. In order to confirm that RFID devices comport with its rules, the FCC requires that they be tested and certified. With some limited exceptions—e.g., trade-show demonstrations—no RFID device may be imported, marketed or operated prior to FCC certification.

The consequences of ignoring FCC requirements and failing to take precautions in the event of inadvertent violations can be much more severe than delayed equipment deliveries. If, for example, a business buys RFID equipment that has not been certified or is otherwise in violation of the rules, the FCC can, at any time, legally force that business to stop operating said equipment. Additionally, anyone who sells or operates such equipment can be subject to substantial fines or other enforcement actions by the FCC.

The mandatory shutting down of an RFID system or failure to obtain needed equipment has obvious financial consequences for companies counting on a robust RFID network to improve their business processes. Accordingly, it is critical that RFID purchasers and users be fully protected in the event of an FCC violation. At the very least, purchasers should require that their vendor contracts include warranties guaranteeing that their RFID devices are certified and comply with FCC regulations.

However, even if an RFID device is FCC-certified and the vendor warrants same, there could still be additional regulatory problems for unwary purchasers and users of RFID equipment. For example, some RF signals tend to "splatter"—i.e., generate unwanted frequencies. This "dirty transmission" could cause interference to devices operating outside of the permitted RFID frequency bands, which is a serious FCC violation.

Because a reader is only as good as its components, it is vital to ensure that those components are of high quality, do not splatter and are FCC-compliant. Consequently, manufacturers, importers and vendors should have specific quality-control procedures in place to be certain their equipment components comport with FCC rules. Furthermore, purchasers should be sure their contracts contain representations guaranteeing the regulatory compliance of those components.

Specifically, RFID vendor contracts should, among other things, include warranties stating that:

  • The devices and components are FCC-compliant, and operate only on authorized frequencies.
  • Equipment in violation of FCC rules will be promptly replaced at no charge.
  • Compensation will be provided for downtime while noncompliant equipment is being replaced.
  • The purchaser/user will be indemnified against third-party lawsuits should the equipment interfere with other radio transmitters and receivers, medical equipment or other electronic devices.

Moreover, RFID users should be aware that modifications of RFID equipment after purchase could result in FCC violations and potentially also void warranties. For example, changing an antenna or increasing the transmission power of a reader would likely breach FCC rules and put the user at risk of assuming all penalties and costs incurred as a result of that action. Consequently, it is important to operate RFID equipment only as directed in vendor contracts and the manufacturers' instructions.

There are many reputable vendors in the RFID marketplace that provide top-quality equipment and have implemented effective regulatory-control procedures. Nonetheless, due to the increasing volume of RFID equipment offered for sale, as well as the myriad of somewhat-arcane FCC rules affecting such equipment, regulatory issues between vendors and their customers are bound to arise, with varying degrees of consequences for the parties involved. Accordingly, it is imperative that RFID vendors and users pay close attention to FCC matters in their transactions, working together to make sure robust RFID networks can be rapidly deployed without any delays, interruptions or enforcement actions from the FCC.

Ronald E, Quirk, Jr. is Counsel at the law firm of Venable LLP in Washington, DC. He can be reached at (202) 344-4677 or