The Commission’s rules provides that RF devices that are subject to verification or Declaration of Conformity procedures (or the newly adopted Supplier’s Declaration of Conformity ("SDoC") procedures) may not be marketed (which includes importation) unless the device complies with all of the Commission’s applicable technical, labeling, identification, and administrative requirements. Pure Enrichment sells its products – ultrasonic humidifiers, air purifiers, diffusers, electronic stimulator massagers, and personal care products – online and at brick-and-mortar retail establishments. (The products apparently, at least in many cases, are manufactured by contract manufacturers, based on the NAL.) In response to a March 2017 complaint to the FCC that Pure Enrichment’s humidifiers can radiate RF emissions that cause interference “to other appliances” and were not identified as having satisfied the equipment authorization requirements, the Commission’s Enforcement Bureau launched an inquiry in May of that year. Pure Enrichment, in a series of responses, claimed that it was unaware that it was marketing unauthorized models until receipt of the Bureau’s Letter of Inquiry (“LOI”), claiming that it believed that authorization was not required under a Commission exemption embodied in a Commission Laboratory Knowledge Database Publication certain (but not all) household appliances. Pure Enrichment acknowledged in responses to the FCC during the investigation that (i) five models lacked proper authorization, required user manual disclosures, and FCC labeling (ii) seven models had an authorization but lacked the required user manual disclosures and FCC labeling; and (iii) two models had an authorization but lacked user manual disclosures

Pure Enrichment provided the Commission a list of apparently noncompliant Part 15 and Part 18 radio frequency devices it marketed and imported into the United States, as well as revenues and other information about its sales of such noncompliant devices. Apparently, it continued to market the non-complaint devices after receiving the LOI and acknowledging that a number of the models were out of compliance. A number of the devices also failed to include the information required by the Commission’s rules to be included the user’s manual and/or other permitted means conveying that information to the user. This included information necessary to ensure the device is complaint with technical requirements and to instruct the user to take steps to mitigate any harmful interference caused by the device. Further, the labels required by the FCC’s rules were missing or improper. Some, but apparently not all, manuals and labels were corrected by Pure Enrichment over a three-month period following the receipt of the LOI, but it seems non-compliant product already held by third-party “logistics providers” in the United States continued to be marketed.

Even after becoming aware of the apparent violations, Pure Enrichment continued to market the fourteen models while it took corrective measures. Pure Enrichment apparently achieved compliance for thirteen of the fourteen as of February 15, 2018, but continues to market one noncompliant model that lacks the proper user manual disclosures and FCC labeling in apparent violation of the Commission’s rules.

In the NAL, the Commission proposes to apply the $7,000 base forfeiture for the marketing of unauthorized equipment to each of the fourteen models that failed to comply with the Commission’s equipment marketing requirements at some point within the last twelve months, resulting in an aggregate base forfeiture of $98,000. The Commission then applied several aggravating factors to arrive at the proposed penalty of 590,380, in particular, the intentional nature of the violations, Pure Enrichment’s resulting economic gain, and the duration and scope of the violations. As for intentionality, Pure Enrichment continued to market the noncompliant devices after becoming aware of the FCC’s investigation and then after acknowledging the noncompliance, despite later corrections covering thirteen of the fourteen devices in question. The continued marketing prior to correction resulted in revenues, which the Commission also took into account, but which data the NAL withholds from the public as confidential. As to scope and duration, the NAL notes that more than half of the devices in question allegedly suffered from at least two rule violations and that nine of the fourteen devices were marketed for more than a year, and some up to three years The Commission found no mitigating factors, underscoring that initial misunderstanding and confusion whether all of the models required authorizations provided no basis for a downward adjustment of the proposed forfeiture.

Commissioner Michael O’Rielly filed a concurring statement in which he was appreciative of the increase in proposed penalty almost $500,000 above the base amount, but he argued for reform of the enforcement process to make it more hard hitting. His statement reflects that the Chairman, at his behest, has committed to review the FCC’s forfeiture policies in the future. Commissioner O’Rielly would like to see baseline penalties that are more reflective of the severity of violations, diminishing reliance on upward adjustments and, he contends, improving the transparency, consistency, and credibility of the Commission’s enforcement process. Thus, for example, he raises concerns because, according to him,”[t]he base forfeiture is $7,000 for any model that does not comply with [the equipment authorization] requirements . . . regardless of whether one device of a certain model was sold or a million” and regardless of net profits or the period of time devices are out of compliance. Ostensibly, Commissioner O’Rielly would like to see base amounts increase in some fashion, literally or as applied.

The Commission’s ability to reset the base forfeiture amount is limited because that is set -- $7000 in the case of “importation or marketing of unauthorized equipment” – under Section 503 of the Communications Act, as are maximum penalties for violations and continuing violations. The discretion of the Commission arises in taking into account aggravating and mitigating factors and determining whether to apply the baseline penalty for equipment importation/marketing violations on a per model basis, as is typical (but not required by the statute) or on a per unit basis.

When and how the Commission moves forward with any policy review in this area of enforcement is certainly something that manufacturers, importers, distributors, brokers, and retailers should watch closely. In the interim, such entities may be well-served to review the processes they have in place to ensure that RF equipment which they import or market in any way adheres to the authorization procedures and information and labeling requirements that apply under the Commission’s rules. As the NAL makes clear, misunderstanding the requirements will likely not be an accepted excuse and rapid action to correct any discovered violations is essential to avoid the magnification of penalties should a complaint be made or an investigation commence.

This wave of KDB publications, which are effective immediately subject to certain conditions in some cases, comes only one week after the FCC announced that a draft Notice of Proposed Rulemaking (“NPRM”) is on circulation among the Commissioners that would consider (a) codification of and refinements to the FCC’s permit-but-ask (“PBA”) procedure, (b) further articulating the post-grant obligations of TCBs, (c) requiring labs that manufacturers and importers use to test radiofrequency equipment to be accredited, and (d) officially recognizing the latest industry testing standards. The text of the NPRM is not yet available and it is uncertain when the Commission will adopt the NPRM, which it is expected to do.

We cannot fully describe and summarize here the new and updated KDB entries. They are highly technical and require a close examination typically in tandem with other KDB releases. Moreover, the publications represent revised versions of previous KDB documents in most cases and cover myriad issues not modified by the current KDB publications. KDB entries are often updated at irregular periods by the FCC Lab as it deems necessary. However, key highlights of the recent publications are

• Class II Permissive Changes: Through changes to its Permissive Change Policy and SDR Application Guide, the FCC Lab provides that Class II permissive changes to non-SDR devices previously certificated no longer need be filed directly with the Commission. Instead, responsible parties (manufacturers and importers) may engage TCBs to handle such changes provided the TCBs use the PBA process as needed.
• Modified Operating Parameters of SDR and non-SDR Devices: The Commission reiterated that, except for devices approved as SDRs or in extremely limited circumstances otherwise (such as where equipment authorization grantees have received specific Commission approval), it is still not permissible for anyone except the grantee (such as end users, service providers, operating system providers, application developers,OEM integrators, professional installers or authorized service dealers) to modify the operating parameters of frequency range, modulation type, maximum output power or the circumstance under which device has been approved, and user accessible software must not allow any such operations. For non-SDR devices, the new KDB publications make clear that approval for such arrangements may be sought through TCBs subject to the PBA procedures.
• PBA List: The Lab made several changes to clarify those devices subject to the PBA process, which applies to equipment subject to Certification under Part 2 of the rules and for which the FCC has not yet established specific testing guidelines or where the Commission has determined a continuing need to provide case-by-case guidance. The Commission made the new PBA List effective immediately, but only if the revised RF Exposure procedures published by the Lab on October 24 are followed. Otherwise, the new PBA List may be used only as of January 1, 2013, when applicants and TCBs must use the new RF exposure procedures and comply with the new PBA List. Until then the old RF exposure procedures otherwise apply in conjunction with the pre-October 24 PBA List. In brief, through the updated PBA List (version 11), the Commission, among other things:

o removed the exclusion in the List applying to cellular base stations

o clarified that devices using IEEE 802.11ac standards have been removed from the List because the Commission has now provided specific guidance for these devices

o removed from the List devices operating under the WCS and SDARS rules

o removed from the List broadband devices operating under Part 27 (subpart N) and Part 90 (subpart AA) as part of the 700 MHz Public/Private Partnership

o added to the List certain equipment subject to Part 90 (subpart Z) governing operation of wireless broadband services in the 3650-3700 MHz band

o added devices to the List for which the applicants seek approval as SDRs under Section 2.944 of the FCC’s Rules

o added transmitters operating under the special provisions of spectral efficiency in sections 90.203(j)(4), (5), (7), and (8) of the FCC’s Rules and where there are specific waivers

o added unlicensed wideband vehicular radars operating under sections 15.252 and 15.253 in the 16.2-17.7 GHz, 23.12-29.0 GHz, 46.7-46.9 GHz and 76.0-77.0 GHz bands

o clarified exceptions to the applicability of PBA procedures to RF exposure evaluations in situations when a power reduction feature is used to reduce transmit power

o clarified that the PBA procedures apply to RF exposure evaluation, with certain exceptions, when device tilt and other sensing features are used to reduce transmit power in addition to proximity sensing features

o clarified that a Specific Absorption Rate (“SAR”) test report must fully explain if a PBA process was not required for power reduction based on the application of published RF exposure KDB procedures

o clarified that, in the case of tablets and similar devices, where the antenna is near the corner of the device, TCB approval is possible only following a KDB inquiry to determine if additional SAR tests are required

o clarified that the PBA process may be used for wireless charging applications in instances where test and approval guidance is available through RF exposure KDB procedures in specific scenarios

Again, this brief listing is not exhaustive and full details and understanding of what the FCC lab did in any respect requires examination of the new KDB publications. Some of these additions reflect guidance the Lab had already provided in other KDB publications which had not previously resulted in updates to the PBA List. The new PBA List also clarified the text applicable to other devices on the List without substantive change.

• PBA Procedures: The PBA procedures published in December 2011, and corrected for a typo in January 2012, remain in effect without further change.
• TCB Exclusion List: The Commission removed from the list of applications that TCBs cannot certify certain Class II permissive changes for non-SDR devices (as noted above); removed portable devices subject to certification operating according to occupational exposure requirements except certain push-to-talk configurations; removed from the exclusion list certification of certain portable transmitters with “hotspot” capabilities; removed portable transmitters operating between 100 and 300 MHz where SAR evaluation is required; and clarified certain requirements for devices subject to RF exposure evaluations, namely portable transmitters with source-based time averaged output power.
• Cross References: The FCC Lab added a number of welcome cross-references in the PBA List and Permissive Change Policy document to other KDB publications for extra clarity of its intent and meaning.
• Published RF Exposure KDB Procedures: The Lab published a new document covering SAR measurement procedures for 100 MHz to 6 GHz. The Commission also made major revisions both to its general RF exposure evaluation requirements and test guidance for mobile and portable devices that may be applicable to all the other RF exposure procedures in specific cases. Further, the FCC Lab adopted and or revised specific SAR considerations and procedures used to determine compliance with RF exposure limits for consumer wireless handsets such as cellphones, smart phones, and cordless phones; mobile and portable broadband devices; long term evaluation (“LTE”) devices; and laptops, notebooks, tablets, and netbook computers. The Lab provided that previous published RF exposure KDB procedures and specifically-applicable equipment authorization policies may be used through December 31, 2012, subject to other guidance attendant to those procedures, including inquiries required of the FCC through the PBA process. As of January 1, 2013, the new RF procedures and the associated PBA procedures, as applicable, will govern. Whichever published RF exposure KDB procedures are used between now and January 1, 2013, the Lab underscored that they must be used in their entirety.