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.

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.