FCC Nabs Residential Bitcoin Miner Operator for Apparent Interference With T-Mobile’s Wireless Broadband Network

By Ronald E. Quirk

The agency has ordered the suspect to respond to a series of questions about the bitcoin minder, including his use of the device, the make and model number, FCC labeling compliance, and identification of the vendor that sold it to him.

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The Federal Communications Commission (FCC) recently issued a Notification of Harmful Interference against a Brooklyn resident, alleging that he operated a bitcoin miner in a manner that caused spurious emissions on the 700 MHz band, which interfered with T-Mobile's LTE network. The FCC warned the purported offender that continued operation of the bitcoin miner that causes interference could result in his being subject to steep fines, equipment confiscation and even prison time. As part of its ongoing enforcement action, the FCC ordered the suspect to respond to a series of questions about the bitcoin minder, including his use of the device, the make and model number, FCC labeling compliance, and identification of the vendor that sold it to him.

FCC Continues Strict Enforcement of Its RF Equipment Rules
This case is a powerful example of the FCC's continuing trend of cracking down on violators of its radio frequency (RF) equipment rules. This episode is somewhat unusual, because the FCC typically targets manufacturers, importers or vendors marketing unauthorized or improperly labeled RF devices. In this instance, the FCC is not (at least at this stage of the investigation) concerned with noncompliant equipment. Rather, the Commission us targeting the use of an apparently compliant RF device that resulted in harmful interference. The FCC hinted that the subject device may have been improperly modified in a manner that resulted in operation on an unauthorized frequency.

FCC's Interest in Bitcoin Miners
Bitcoin miners add transaction records to bitcoin's blockchain. The bitcoin protocol stipulates that 21 million bitcoins will exist at some point. What miners do is bring them out into the light, a few at a time. The miners' operators are permitted to do this a reward for creating blocks of validated transactions and including them in the blockchain. Bitcoin mining is accomplished by a series of nodes that run bitcoin software and keep bitcoin going by participating in the relay of information—i.e., spreading btransactions around the blockchain.

At first blush, bitcoin miners may appear to be a curious target for FCC enforcement, as they do not seem to fit into the categories of devices that clearly have the potential of causing harmful interference. In the past, the FCC has commenced actions against suppliers that marketed equipment such as Wi-Fi routers, smart meters, jammers, digital signage, RFID readers, and radio transmitters that caused interference or were otherwise not in compliance with its rules.

At issue in this case is the bitcoin miner's circuit-based RF hardware. Older miners have central processing units (CPUs); more recent models use graphics processing units (GPUs), field programming gate arrays (FPGAs) or application-specific integrated circuits (ASICs). The miner at issue uses ASIC.

These types of hardware are classified by the FCC as "unintentional radiators," i.e., devices that use digital logic, electrical signals operating at radio frequencies for use within the product, or send radio frequency signals by conduction to associated equipment, but do not transmit RF energy. The FCC regulates unintentional regulators by requiring the responsible party (typically the manufacturer or importer) to conduct testing and self-authorize its device by preparing a Supplier's Declaration of Conformity, attesting that the device complies with the FCC's emissions limits and other technical rules before it is marketed in the United States.

Consequently, bitcoin miners are subject to the same FCC rules as PCs, peripherals, sensors, and other types of unintentional radiators.

Hazards of Modifying RF Devices
Even RF devices that have been properly tested and authorized can still be illegally operated if they are modified to operate in a manner that does not conform to the manufacturer's original, authorized specifications. Such modifications—which usually entail increasing power or tweaking the device to operate on unauthorized frequencies—often result in the modifying entity becoming the party responsible for regulatory compliance. Hence, if the user of a bitcoin miner modifies the device without the knowledge of the manufacturer or importer, and it causes harmful interference, the operator can be held liable.

But FCC rules also require that manufacturers design RF devices so that adjustments of any control readily accessible to the user will not cause the device to be operated in violation of the FCC's technical regulations, including emissions limits. In other words, the FCC's rules prohibit a device that is tested and authorized to operate on a specific frequency band and at certain power levels from being easily tweaked to operate beyond those parameters.

Who Is the Responsible Party in This Case?
Based on the information available, it is not known whether the subject bitcoin miner was properly tested and authorized, or was authorized to operate on the 700 MHz band (Supplier's Declarations of Conformity are not publicly available). Interestingly, the miner at issue has a function (Miner Configuration Advanced Setting) whereby the operator can easily change the device's operating frequency from its default setting of 350 MHz.

Accordingly, if the device were tested and authorized to operate only at certain frequencies that do not include the 700 MHz band, but the device enabled the operator to easily utilize unauthorized frequencies, the manufacturer could be the culpable party. It is also possible that both the end user and the manufacturer could be held responsible for the harmful interference caused be the device, depending on the rules at issue. Stay tuned.

Stay Aware and Informed
This case illustrates a brave new world of RF equipment regulatory concerns for manufacturers and operators of these devices. Internet of Things (IoT) stakeholders would be well advised to understand the issues raised in this case raises, and to implement measures to ensure compliance and mitigate their exposure to liability for violations.

If you would like additional information about the FCC's RF equipment rules, including suggestions for best practices to ensure compliance, please contact IoT attorney Ronald E. Quirk, Jr. at (703) 714-1305 or req@commlawgroup.com. Further information about Marashlian & Donahue's Internet of Things and Connected Devices practice is available here.