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Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations under the Congressional Review Act, 5
U.S.C. 8042. The Commission will send a copy of the First Report and Order and Order of Proposed Modification to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801a1A.
Synopsis I. Background The Commissions rules generally require that RF devices may be marketed within or imported to the United States only after they have been subjected to the appropriate equipment authorization procedurecertification or suppliers declaration of conformity SDoC. These procedures require, among other things, that RF devices are tested to show compliance with the Commissions rules and technical standards. Currently the Commissions rules include some exceptions that provide for limited marketing and importation of RF devices that have not yet been subject to a complete equipment authorization process. For example, some marketing prior to equipment authorization is permitted in the form of conditional sales contracts between manufacturers and retailers of RF devices; and, in the early stages of the production process, such devices may be marketed to business, commercial, industrial, scientific, or medical users. In both instances, marketing to the general public is not permitted and the devices may not be delivered prior to equipment authorization. Similarly, limited quantities of unauthorized devices may be imported, but not marketed, for testing, demonstration, or personal use.
In June 2020, the Consumer Technology Association CTA filed a petition seeking to modify the rules pertaining to RF device marketing and importation. See Petition of Consumer Technology Association to Expand Marketing Opportunities for Innovative Technologies, RM11857 filed June 2, 2020 CTA Petition. CTA asserted that the Commissions current equipment authorization rules can slow the process of developing and deploying new products and services, and it proposed rule revisions targeting the prohibition on conditional sales to consumers and the limited ability to import devices prior to authorization. In December 2020, after considering the petition, and the general support expressed in the associated record, the Commission initiated this proceeding, in which it proposed changes to the Commissions equipment marketing and importation rules that were informed to a large extent by the CTA Petition.

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In the NPRM, the Commission proposed to broaden the existing conditional sales contract marketing exception beyond the limitation of retailers and wholesalers. The Commission acknowledged that new sales models increasingly involve online marketplaces that provide product developers and manufacturers direct access to consumers, thus involving customers in the product development process to a greater extent than before.
As a result, device developers are provided with investment and incentive to produce innovative products and consumers benefit by seeing new products and features rolled out in a much shorter timeframe. While the Commission proposed the new marketing rule to allow manufacturers to better leverage this new development paradigm, it nonetheless recognized the continued importance of keeping unauthorized RF devices from becoming available, and it proposed that, even under the new rule, delivery or physical transfer of devices to consumers prior to equipment authorization would still be prohibited.
In addition, acknowledging industrys desire to speed the launch of new products to keep pace with the increasingly compressed innovation cycle, the Commission also proposed to broaden the conditions under which RF
devices can be imported prior to equipment authorization. The Commission proposed to allow up to 4,000 RF devices to be imported prior to equipment authorization for the purposes of certain pre-sale activities, such as packaging and physical transfer to retail locations. Under this proposal, the RF devices could not be displayed to consumers prior to equipment authorization and the party responsible for importation would be required to take steps to ensure that appropriate device control is maintained until authorization is obtained.
Sixteen comments and one reply comment were filed in response to the NPRM. While some commenters suggest modifications to the Commissions proposals, all filers are generally supportive of the overall marketing and importation proposals.
II. Discussion The Commission recognizes that, in some instances, developments in the modern device marketplace have outpaced those in the Commissions equipment authorization regime. As a result, the Commissions rules may limit the ability to market and import RF
devices in new efficient and costeffective ways. The Commission therefore takes this opportunity to adopt
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the rule changes proposed in the NPRM, with clarifying revisions, which will provide additional options for taking advantage of modern product development practices while ensuring against the use of unauthorized RF
devices. Accordingly, the Commission modifies its rules to include an additional option that will allow for more importation of RF devices prior to equipment authorization. Further, the Commission modifies its rules to allow conditional sales of RF devices prior to authorization, subject to certain requirements. In both instances, the Commission is adopting rules that are crafted in a manner to not undermine the Commissions equipment authorization program by continuing to prevent end users from having access to unauthorized RF devices. The Commission also makes targeted changes to its proposals to clarify its intent regarding the interaction between the revised marketing and importation rules. These changes eliminate a potential conflict between the proposed importation and marketing provisions, whereby imported and domesticallyproduced devices could be subject to disparate requirements. The rules the Commission are adopting remove this disparity and provide more consistent treatment by permitting similar opportunities prior to equipment authorization regardless of the devices country of origin.
In summary, the Commission is adopting a new condition under 2.1204 and a revised exception under 2.803 of the Commissions rules to allow the importation and marketing of certain RF devices, under specified constraints, prior to equipment authorization. In general, the Commission is allowing the importation of a maximum of 12,000 RF devices for pre-sale activity if those devices: 1 Are subject to a certification application that has been submitted to a Telecommunication Certification Body TCB; 2 include an externally-visible temporary label prohibiting display to consumers, operation, and delivery of the device prior to the grant of certification; and, 3 remain under legal ownership of the device manufacturer, developer, importer or ultimate consignee, or their designated customs broker who has a device retrieval process in place. Further, the Commission is revising an existing exception in the Commissions rules to expand to consumers the limited marketing and conditional sales of certain RF devices prior to equipment authorization. The existing exception generally allows conditional sales
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