We examine the First Report and Order and the principal changes in more detail in the referenced advisory.

Briefly, the FCC eliminated the verification and Declaration of Conformity (“DoC”) self-approval procedures from its rules, subject to a one-year transition. In their place, there will be a new procedure covering the same categories of devices now subject to one or the other of the existing procedures. The Supplier’s Declaration of Conformity (“SDoc”) process amalgamates certain pieces of the two existing procedures and implements some entirely new requirements. Among other things, testing by accredited laboratories will not be required for devices qualifying for SDoC treatment, although the Commission may ask for test records. And the FCC also makes clear that users must be apprised of the party responsible for compliance, be provided appropriate contact information, and the responsible party must have a U.S. presence. Any equipment self-approved using the verification or DoC process prior to the end of the one-year transition period will enjoy a valid authorization for marketing and operation purposes in perpetuity, provided the equipment is not modified so as to require a new authorization

In addition, the Commission codified and refined when e-labeling will be permitted to meet certain labeling and compliance statement requirement for RF devices that have integrated digital displays. This action implements certain portions of the Enhance Labeling, Accessing, and Branding of Electronic Licenses Act (“E-LABEL Act”). The FCC adopted a maximum “three step” access requirement when electronic labeling is permissible and utilized, noting that the FCC’s Office of Engineering and Technology (“OET”) will provide guidance in response to specific questions regarding compliance via the KDB inquiry process. (Electronic labeling is never mandatory.) Step one would be a user accessing the device settings menu on the digital display. As an example of one “characteristic sequence,” accessing a submenu of legal information in step two and then a further submenu of FCC compliance information in step three would qualify. However, recognizing that there may be a lack of clarity in specific situations, the FCC directed the Office of Engineering and Technology (“OET”) to continue to provide guidance in response to specific questions regarding compliance via the KDB inquiry process. The e-labeling rules address certain specific and general scenarios exceptions where e-labeling will not be permitted, caution that temporary labels must still be used where a manufacturer exercises the e-labeling option, and require that appropriate instruction be provided separately for accessing the electronic labeling and compliance information. E-labeling is never mandatory.

Further, the Commission streamlined some aspects its importation rules, including the elimination of the requirement to file FCC Form 740 customs declarations. Yet, certain obligations of the Commission’s importation rules remain, and the FCC clarified the obligations of the responsible party, for imported devices, to determine and to be able to demonstrate compliance. The FCC observed that it is not changing any regulations of Customs and Border Patrol (“CBP”) and will not be seeking any changes from CBP. The agency also modified its rules to increase the number of devices that could be imported for trade show purposes and retained (and clarified) an importation exemption that applies to unintentional radiators that operate only on low level battery power, such as greeting cards, calculators, and quartz watches.

Finally, the Commission modified its rules on measurement procedures to include more direct cross-references to guidance from the FCC Laboratory’s Knowledge Database (“KDB”) and made other rules changes to clean up and clarify rules regarding the applicability of and certain alternatives to certain measurement procedures referenced in the rules, including ANSI C63.4-2014, ANSI C63.10-2013, and ANSI C63.26-2015.

The communications industry and the “RF equipment ecosystem” has changed dramatically since the last Commission’s last comprehensive review of its equipment authorization rules in 1998. Recognizing that it is easier than ever to design, manufacture and bring new RF equipment to market, the Commission has attempted to respond to these trends by taking actions aimed at streamlining and simplifying the equipment authorization program. In a recent blog post, we reported that new rules took effect in early July 2015 to expand the role of Telecommunications Certifications Bodies (“TCBs”) in the certification process. In the current NPRM, the Commission issues proposals to further streamline equipment authorization procedures while being mindful of maintaining sufficient safeguards to ensure that these RF devices comply with FCC rules and do not cause harmful interference.

The NPRM includes several key proposals:

• Unify the self-approval procedures. The Declaration of Conformity (“DoC”) and verification procedures are currently independent requirements for authorization. The NPRM proposes to combine them into one self-approval program for all equipment currently subject to one of those two procedures. The proposed new process, tentatively called a Suppliers Declaration of Conformity (“SDoC”), would eliminate the current obligation to use accredited laboratories but would clarify that all devices currently subject to the DoC or verification procedures must be tested. The proposed process would incorporate some but not all elements of the SDoC processes used for Telephone Network Terminal Equipment under Part 68.
• Update Certification Procedures. The Commission proposes updates to the certification requirements to respond to the trend of authorizing components, including modular transmitters, that will be used as part of more complex designs or in third-party host devices. The proposals focus on the parties responsible for submitting applications. The Commission proposes to amend the basic certification rules to allows for the certification of a group of related devices under a single FCC ID. Additionally, the Commission proposes to relocate the rules for modular transmitters from Part 15 to Part 2 in light of the increasing use of modular transmitters in RF devices intended for operation within licensed radio services. The NPRM also proposed changes to the software defined radio (“SDR”) rules to increase flexibility in certifying devices where the RF elements are controlled by software.
• Updated Certification Modification Process. The NPRM proposes to eliminate the current “electrically identical” framework for determining whether a device requires a new certification. Instead, there would be two categories of changes, those that require a new FCC ID and those that do not. The proposed rule changes would require an evaluation of the modifications, and potentially testing, to determine the change category. Changes that do not substantially alter the overall function of the device will not require a new FCC ID, but in some cases may still require a new application for certification. Where a new FCC ID is required, due to substantial changes to design or layout, or replacement of components, a new certification would be a prerequisite.
• Clarification of Responsible Party. The NPRM proposes to clarify who the responsible party is for obtaining certification in a number of scenarios, including when end products incorporate modular transmitters, third parties modify equipment , parties intend to market repaired or refurbished devices, and importers bring products into the U.S.
• Streamlined Certification Application Requirements. The NPRM seeks comment on reducing the information that must be provided when applying for certification. The FCC proposes to reduce duplicative information requirements as well as only require applicants to submit specific information based on the type of device to be certified. The NPRM proposes to codify existing short-term confidentiality practices for certain types of information allowing for a standard 45 day period upon request and seeks comment on extending that period to 180 days. Further, long-term confidentiality would be provided automatically for certain information categories (such as exhibits of schematics or operational descriptions) in all certification applications.
• The E-LABEL ACT. The NPRM also seeks comment on a series of updates to the equipment labeling obligations to recognize and codify the requirements of the E-LABEL Act. For example, the proposed rules will generally allow an RF device with an integrated electronic display to electronically display the labels required by the FCC rules. However, even where devices have integrated displays, parties would still be required to place warning statements or other information on device packaging, within user manuals, or at the point of sale as otherwise required under FCC regulations.
• Importation Requirements. The NPRM questions the usefulness of the information provided on the current FCC Form 740 declaration for imported devices, particularly since much of the information is already collected by the U.S. Customs and Border Patrol and may also be available on the internet. The FCC seeks comment on the continued use of collecting Form 740 information. The NPRM also proposes changes, among other things, to the number of imported devices permitted for demonstrations at trade shows and in other instances prior to satisfaction of the relevant equipment authorization procedure.

There were three different areas that the Commission targeted in its investigation of Intel following the company’s voluntary disclosures of "possible violations of the rules" – importation, operation, and marketing – prior to equipment authorization. First, Intel acknowledged that, prior to 2013, it imported more than the limited quantities of units that the FCC’s rules allowed prior to equipment authorization for the purposes of "testing or evaluation of compliance with the rules or suitability for marketing," provided the devices are not offered for sale or marketed. That limit, for the type of devices in question and for the period in question, was 2000 devices. (The current limit for importation for such purposes prior to equipment authorization is 4000, subject to satisfying certain conditions, as the result of a May 2013 rule change.)

Second, the rules in effect at the time of the alleged violations permitted operation of radio frequency devices prior to receipt of equipment authorization for the purpose of evaluating product performance and determining customer acceptability provided the operation occurred at a manufacturer’s facilities during the developmental, design, or pre-production stages. Two other exceptions allowed for operation for demonstration or evaluation purposes either upon the grant of a special temporary authority or an experimental license or under the authority and with the consent of the licensed service provider on the frequencies and in the area of operation. The Consent Decree indicates that certain Intel prototype devices were operated outside the bounds of these then-applicable limited exceptions. (The FCC’s rules changes adopted in May 2013 set forth modified limits that now apply to operation of radio frequency devices prior to equipment authorization.)

Finally, Intel acknowledged that marketed devices that had not yet been properly authorized. Specifically, Intel displayed at a trade show a prototype digital device model with a notice that (Intel believes) simply stated that the device was confidential Intel property and not for sale. The FCC’s rules require a trade show display of an unauthorized device to state conspicuously and precisely that "This device has not been authorized as required by the rules of the Federal Communications Commission. This device is not, and may not be, offered for sale or lease, or sold or leased, until authorization is obtained."

Intel entered into a three-year Consent Decree with the Commission. Like most FCC consent decrees, it requires a compliance officer, training of "Covered Employees," and reporting on a regular schedule and intermittently should any violations occur. One aspect of the Intel Consent Decree that is of particular interest, and goes beyond most other similar decrees that we have seen, are Intel’s commitment to maintain its current structure of management and employees with compliance responsibility within its business units or, "if it makes changes, [it] shall ensure that it maintains equivalent oversight over compliance with all Communications laws that are applicable to its operations." The Consent Decree also spells out a number of specific rule provisions in the three areas of concern – importation, operation, and marketing activities prior to equipment authorization – which must be the subject of correlated compliance measures within the company’s operating procedures. Further, the Consent Decree especially targets the training of employees with certain job responsibilities within two specific Intel Group’s in addition to the usual consent decree commitments that apply to a broad definition of "Covered Employee." In short, the Intel Consent decree manifests a degree of tailoring and granularity of commitment that is atypical of many other consent decrees we have reviewed. Whether this was a quid pro quo for a smaller voluntary contribution or some other concession or potentially foreshadows a deeper level of Commission tailoring of compliance programs cannot be ascertained from the face of the consent decree. We will continue to monitor FCC releases in this area for developments that shed further light on this question.