CommLaw Monitor

FCC Proposes Maximum Penalties for “Egregious” Marketing Recreational RF Devices Able To Operate In Restricted Radio Bands

Chip Yorkgitis — Mon, 11 Jun 2018 19:26:53 -0400

On June 5, 2018, the Federal Communications Commission’s (“FCC’s” or the “Commission’s”) Enforcement Bureau (“Bureau”) issued a Notice of Apparent Liability against a manufacturer and retailer for marketing non-compliant RF devices, a dozen models of which were capable of operating in restricted spectrum bands. The FCC proposes to assess a total fine of $2,861,128.00 against ABC Fulfillment Services LLC and Indubitably, Inc. (collectively, “HobbyKing”) for equipment authorization rule violations involving 65 models of recreational audio/video transmitters (“AV Transmitters”) used with model airplanes drones. But more than $2.2 million of that resulted from the fact that twelve models apparently operates in restricted radio bands and three at higher powers than authorized in other bands. The restricted bands are those in which unlicensed transmitters are not allowed to operate because of potential interference to sensitive radio communications. In the case of HobbyKing’s the Commission found that its AV transmitters operated in bands where important government and public safety operations, such as those of the Federal Aviation Administration managing commercial and passenger flight traffic, doppler weather radar, flight testing, and other activities the FCC has determined are particularly worthy of heightened interference protection take place. In other words, the moral is that marketing devices that do not have proper equipment authorization is bad, but doing so when the devices operate within restricted bands is quite simply “egregious,” as the NAL put it.

HobbyKing markets its devices on its website, HobbyKing.com. The devices in question operate in various amateur bands between 12450 and 5925 MHz, but the troubles for HobbyKing emerged because the devices also operate on other bands, including several restricted bands, and some models operate at higher powers than permitted under the FCC rules. In 2015, the Bureau received several complaints against HobbyKing, which resulted in a Marketing Citation for violations of Section 302 of the Communications Act as well as Sections 2.803 and 2.925 of the FCC Rules for illegal marketing of two noncompliant AV transmitters. Further complaints surfaced in 2017, which led to a Bureau Letter of Inquiry (“LOI”). Apparently, HobbyKing received the LOI, but failed to respond fully, which led to another Citation – this time for failure to respond to the LOI (the “LOI Citation”) – and the Bureau ordered a response, but the company did not respond fully, according to the NAL. But the response was enough for the Bureau to determine that HobbyKing continued to market transmitters that required, but did not have, equipment authorization. The devices operated on both amateur as well as non-amateur frequencies, which negated HobbyKing’s ability to rely on an exemption from equipment authorization that operate only on amateur frequencies (and adhere to otherwise applicable technical requirements). Three of the 65 models in question also operated at power level that exceeded the limits the Commission established for amateur commend of model aircraft.

(The Commission explained in the NAL: “The Commission generally has not required amateur equipment to be certified, but such equipment must be designed to operate only in frequency bands allocated for amateur use. If such equipment can operate in amateur and non-amateur frequencies, it must be certified prior to marketing and operation.” To reinforce these points, on the day of the NAL, the Bureau issued an Enforcement Advisory, which we covered in an earlier blog post.)

In addition to erroneously thinking (at one time, at least) that its devices qualified for the exemption applicable to devices that operate only on amateur frequencies, the company also claimed that it does not market its devices to U.S. customers. But apparently there is substantial evidence to the contrary, including the fact that their website says they ship worldwide and HobbyKing has a New York office and customer service operations in the United States. Also worthy of note, on July 3, 2017, they posted on their Instagram account, “Wishing our US customers a very happy Independence Day!”

Taking into account the totality of the circumstances, the Bureau proposed a forfeiture of almost $2.9 million. Providing a window into its thinking, the Bureau started with a base penalty amount of $7,000 for 65 models, a total of $455,000. For the fifty models that were operated without equipment authorization, the Bureau adjusted each penalty by $5,250 for repeated and continuous violations, namely engaging in the same type of marketing misconduct that led to the Marketing Citation HobbyKing after that Citation was issued. For those fifty models, the total proposed penalty is $612,500.

For the remaining fifteen models, the Bureau proposes the Commission issue the statutory maximum penalty of $147,290. Twelve of these devices, as noted above, operate in restricted bands in addition to amateur bands, and three of the AV transmitters exceed the power limits in the amateur bands in which they operate. Consequently, none of these fifteen devices could have received an equipment authorization. Under any circumstances, they could not be marketed in the United States. For these, the Commission issued a proposed penalty of $2,209,350.

Finally, the Commission tacked on an additional penalty of $39,278 for HobbyKing’s failure to respond to the LOI in the first instance and then to the LOI Citation, despite repeated opportunities to answer. The Bureau’s NAL treated HobbyKing’s failure to respond to the LOI and LOI Citation as individual, non-continuing violations and proposes to apply the statutory maximum of $19,639 for such violations in each case.

This NAL and the reasons for the aggravation of the penalty from base amounts reflects a number of lessons. Several of the key ones are: One, parties receiving inquiries or follow-up from the Commission should respond. Two, when parties don’t respond at first and are reminded of their obligation to respond to Commission inquiries or LOIs, they should respond. Three, companies marketing devices under their own brand name (or not), even if they do not manufacture them, are responsible for ensuring that they are marketing complaint devices. Four, parties should understand the rules that apply to the devices they market to ensure whether they have the proper authorization or are even eligible for authorization. Five, if companies think the devices they manufacture or market qualify for an exemption from the FCC’s equipment authorization rules, they should double check to be sure they meet all of the conditions for the exemption. Six, unlicensed devices that operate in one or more restricted bands cannot be authorized (absent an affirmative FCC waiver) and therefore cannot imported, marketed, or operated in the United States. Seven, companies that market RF devices only over the web must be mindful of what countries they are marketing to and what the regulatory requirements are in those countries.

The two significant equipment authorization enforcement actions in recent days – we direct you also to our post on the Pure Enrichment NAL released in late May -- rightfully makes one wonder if there are more to come in short order.

FCC Authorizes First LTE-U Devices

Chip Yorkgitis — Thu, 02 Mar 2017 13:25:12 -0500

Wireless carriers are a major step closer to using unlicensed spectrum to ease network congestion and boost speeds following the FCC's authorization of the first LTE-Unlicensed (“LTE-U”) devices on February 22, 2017. LTE-U technology allows carriers to deliver mobile traffic over unlicensed spectrum in the 5 GHz band already occupied by Wi-Fi, Bluetooth, and other technologies. The recipients of the equipment authorizations are Ericsson and Nokia. The certifications by the FCC's Office of Engineering and Technology (“OET”) mean that the devices in question satisfy the technical criteria of the FCC designed to prevent harmful interference to radio communications services. Those rules stipulate that unlicensed devices must accept any harmful interference they receive from any source. Unlicensed devices have been certified for decades. The announcement of the certifications of the LTE-U devices represents an important milestone in the FCC's recent focus on spectrum sharing and broadband deployment because these devices are specifically designed to support broadband and work in an integrated fashion with commercial mobile broadband providers’ networks. In short, this is not just a pumped up version of Wi-Fi offload, which carriers have used for years to relieve congestion on mobile networks. These devices mean that the hundreds of megahertz of 5 GHz spectrum that the cable and unlicensed communities fought for years to gain access to – the so-called Unlicensed National Information Infrastructure (“U-NII”) bands – will now be available for LTE technologies.

Wireless carriers generally hold exclusive licenses to operate in certain spectrum, while Wi-Fi, Bluetooth, and many other devices operate without radio licenses provided they can show adherence to certain emissions and other technical requirements designed to protect licensed services. The LTE-U authorization follows years of wireless industry pressure to open up unlicensed frequencies to offload mobile traffic and ease network congestion. The ability to offload traffic to Wi-Fi has become increasingly important as the demand for streaming video continues to grow. LTE-U only works over short distances, but its supporters highlighted its potential to improve over Wi-Fi capabilities using the U-NII spectrum to deliver gigabits of data at LTE speeds while improving capacity in buildings and city centers. However, LTE-U faced opposition from cable and internet service providers concerned that increased traffic would degrade the performance of Wi-Fi, Bluetooth, and other technologies operating in the same spectrum. Opponents noted that Wi-Fi networks already carry the bulk of mobile device traffic and asked the FCC for more time to evaluate LTE-U technology.

The Wi-Fi Alliance developed co-existence guidelines for Wi-Fi and LTE-U and released an evaluation test plan in late 2016. Tests have been conducted under the plan and, while the head of OET stated last week that he understood the LTE-U devices were evaluated successfully under that test plan, he emphasized that the certifications, as is the case with all equipment authorizations, merely demonstrated that the LTE-U devices in question met the FCC’s unlicensed device technical requirements for operation in certain bands. The devices have not been certified to not cause interference to or receive interference from Wi-Fi devices.

Following the authorization, multiple carriers announced their plans to deploy LTE-U devices in the next few months, with other wireless providers expected to follow suit. The LTE-U devices will complement existing LTE service, using compatible base stations located across the country that also serve as base stations to licensed LTE devices.

These certifications and the carriers’ related announcements of their intent to deploy the devices raise two important questions. First, will the deployment of these devices at scale lead to congestion and interference concerns in the U-NII bands? Cable operators, wireless internet service providers, and other Wi-Fi proponents will be watching closely. Second, will access by carriers using LTE-U devices in the hundreds of megahertz in the 5 GHz band reduce pressure for more licensed spectrum for commercial mobile carriers? The amount of U-NII spectrum available to mobile carriers deploying LTE-U devices is approximately the same, if not slightly more, than all of the spectrum licensed to commercial mobile carriers, and increasingly more and more usage is characterized by subscribers that are effectively stationary, in and near buildings and in public spaces and venues. It will be most interesting whether these certifications, in retrospect, end up being transformational in terms of how the spectrum is managed in years to come.

FCC Signals Intent to Take Strong Action against Unlicensed Broadband Operations That Interfere with FAA Weather Radar Systems

Chip Yorkgitis — Thu, 08 Aug 2013 16:19:42 -0400

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On Tuesday, the FCC stepped up its enforcement efforts against unlicensed wireless broadband devices causing interference by releasing a Notice of Apparent Liability (“NAL”) against Florida’s Towerstream Corporation in the amount of $202,000 for unauthorized operation of, and interference caused by, Wi-Fi and rooftop tower devices in New York City and Miami. The devices operated in or near the 5 GHz spectrum set aside for operation of Unlicensed National Information Infrastructure (“U-NII”) transmission systems on a non-interference basis that many providers of broadband internet access, including mobile operators and cable service providers, among others, reply upon to give customers Internet access over extended areas. The Bureau concluded that Towerstream operated six U-NII devices without authorization and in a manner that caused interference to the Federal Aviation Administration’s (“FAA’s) Terminal Doppler Weather Radar (“TDWR”) systems that were within line-of-sight, and that another U-NII device operated on frequencies where such devices are not permitted. The Commission concluded that Towerstream operated the devices without authorization because Towerstream knew that “operations within 30 MHz of the TDWR operating frequencies within line-of-sight of the airports could cause harmful interference to those TDWR systems” and “[b]ecause Towerstream caused harmful interference to TDWR systems after being directed to cease operations” by Bureau staff.

This matter represents a new chapter in the FCC’s efforts to manage through enforcement activity the shared use of the 5.6-5.65 GHz band by the primary TDWR systems and unlicensed broadband devices. As we reported earlier in our blog, the Commission has taken a variety of actions, including both advisories and enforcement proceedings against AT&T, among others, to protect the federal systems. TDWR systems are used at forty-five major U.S. airports to assist air traffic controllers in detecting low-altitude wind shear that poses potential risks to aircraft. In the FCC earlier actions involving U-NII devices at 5 GHz, the principal focus was the failure of equipment used by unlicensed broadband providers to comply with the requirement that the devices possess and have activated Dynamic Frequency Selection (“DFS”) radar detection functionality. In the Towerstream situation, as reported in the NAL, the infractions did not implicate DFS functionality. Instead, Towerstream, after being the subject of Enforcement Bureau inquiries and warnings in 2009 when Towerstream devices in three cities were found to cause interference to TDWR systems and after agreeing with the Bureau to avoid “frequencies around TDWR frequencies,” was found by Enforcement Bureau field personnel at various times between August and October 2012 to operate six U-NII devices on frequencies near those used by the TDWR in such a way that they caused actual interference to the federal safety operations. A seventh broadband transceiver was found to operate without authorization at 4.965 GHz, a channel not available for U-NII devices. The NAL underscores that the Commission’s authorization to operate “unlicensed” devices under its rules “does not extend to devices that are not operated in accordance with Part 15 regulations, and that such operations must be licensed (or otherwise be exempted from licensing despite such non-compliance).”

Based on three factors, the Commission concluded that the proposed forfeiture should be assessed on a per device basis and almost doubled from a base amount of $112,000 for the thirteen violations (seven instances of operating without authorization and six instances of actual interference) to $202,000. By inflating the penalties, with the exception of the device operating at 4.965 GHz, to the maximum per diem forfeiture per violation, the Commission cited the public safety impact of the interference to TDWR operations, Towerstream’s prior history of causing interference to such operations, and “the seriousness of the violations.” Towerstream may well challenge the NAL and possibly succeed in reducing the forfeiture, but this matter both underscores the Commission’s level of penalizing those that interfere with TDWR systems and the importance of parties’ subject to adhere to their commitments to follow a compliance plan, even one voluntarily assumed, especially if subject to prior enforcement action. (There was no reference in the NAL to a consent decree as a result of the earlier enforcement activity.) As the Commission considers additional spectrum bands in which to permit unlicensed operations to support greater wireless broadband access, cases like Towerstream’s bear close watching by providers that seek to develop and implement best practices. There is no doubt that incumbent operators being asked to share with unlicensed operators are giving situations like that presented in the NAL a good look as well.