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Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations manufacturers ability to engage in activities related to the Commissions importation proposal. The Commission in the NPRM sought comment on whether a change to the provision was necessary to achieve the proposals discrete objective and whether doing so could eliminate an important avenue for limited marketing that exists outside the conditional sales contract context. In response to the NPRM, CTIA requests that the Commission deletes 2.803c2ii, as it believes the new rule would eliminate the need for this section and retaining it in the rules would be confusing.
In light of the information in the record and the changes the Commission is making to 2.803c2i by expanding applicability to all parties, the Commission finds that 2.803c2ii is no longer necessary and the Commission removes it. The language that the Commission is adopting in 2.803c2i encompasses conditional sales to all parties, including business, commercial, industrial, scientific, or medical users, thereby negating the need for a separate exception targeted at those users.
The Commission also clarifies the conditions under which conditional sales contracts may be made. The proposed rule would have provided that delivery of devices subject to conditional sales contracts would be conditional upon a determination that the equipment complies with the applicable equipment authorization and technical requirements. To clarify the requirement, the rule the Commission is adopting instead states that delivery is conditional upon successful completion of the equipment authorization process. This change does not eliminate the need for determining compliance with the Commissions technical requirements, but it more accurately reflects both of the Commissions equipment authorization processes and the required milestone for delivery. This better conveys the Commissions intent by removing the ambiguity of a subjective condition referenced only to a determination that the equipment complies with the applicable equipment authorization and technical requirements rather than the actual completion of the equipment authorization process.
C. Device Delivery and Possession While the Commission now will permit conditional sales of RF devices prior to equipment authorization, the Commission reiterates the importance of continuing to ensure that unauthorized RF devices do not reach consumers. No
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commenter suggests otherwise and several explicitly express support for retaining the prohibition. Thus, the rule the Commission is adopting continues to prohibit delivery of RF devices to consumers prior to completion of the equipment authorization process. The Commission expects that the disclosure requirements discussed below will ensure that there is no consumer expectation of early delivery. Likewise, the other process safeguards the Commission discusses below should ensure that sellers take all necessary steps to prevent operation of unauthorized devices and delivery to consumers. These safeguards include provisions, previously introduced in the NPRMs proposed importation provision, to allow devices subject to certification to physically move through the supply chain as far as the retailer, stopping short of the consumer.
In the NPRM, the Commission noted that the proposed rule could be seen as lessening the barriers between device developers, manufacturers, distributers, and consumers and asked whether any additional safeguards would be warranted to protect against harmful interference. Specifically, the Commission asked, with regard to both marketing and importation, whether there are certain types of devices for which conditional sales to consumers would not be appropriate, citing as examples devices that would operate in bands that are subject to rigorous coordination or installation requirements and devices that operate to ensure safety of life onboard ships and aircraft. The Commission also asked whether there are ways to prevent devices from being marketed that have no likelihood of being approved due to compliance issues and whether equipment that could operate only under a Commission waiver should be prohibited from marketing prior to the Commission granting a waiver. One comment suggests that the new rule permitting conditional sales apply to the broadest category of devices and no commenters suggest excluding any devices.
Equipment authorization of RF
devices can be completed by one of two processes. Certification involves rigorous testing by an FCC-recognized accredited testing laboratory and listing in a Commission database. By contrast, SDoC is a self-certification process that gives the manufacturer substantially greater control over determining when a product meets the Commissions equipment authorization requirements.
While not adopting any specific device exclusions at this time, the Commission finds that requiring devices to complete
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the existing equipment authorization processes will facilitate movement of devices through the supply chain while maintaining controls to ensure against unauthorized use and delivery to consumers. Specifically, the Commission sees the two equipment authorization processes as providing a means by which to distinguish between types of devices in implementing various controls to limit physical access to unauthorized RF devices.
Upon further analysis of its proposals, the Commission observes that the proposal to permit conditional sales prior to completion of the applicable equipment authorization process applied to all devices whether they originated from domestic or foreign sources. However, the Commissions new importation rules as adopted herein allow for pre-sale activities where certain imported devices can be physically transferred to retail locations, but the same flexibility was not specifically proposed for other devices.
Allowing transfer of physical possession of certain imported devices to retailers, but not other devices, would result in a disparity in the treatment of similar devices based on whether they are imported or manufactured or developed in the U.S. To ensure consistent measures between similarly situated devices regardless of their origin, the Commission will permit devices subject to the equipment authorization certification process to engage in the same pre-sale activities and under similar conditions the Commission adopts for imported devices.
Specifically, the Commission will allow the physical possession of devices subject to certification to be transferred to distributers and retailers. Neither in the Commissions import nor marketing provision does it extend this flexibility to devices subject to SDoC because, unlike the more rigorous requirements associated with the certification process, the SDoC process provides manufacturers more flexibility in determining compliance with the FCCs technical requirements.
The marketing rule provision the Commission is adopting will permit physical transfer of devices subject to certification procedures, and for which an application has been submitted to a TCB and compliance testing is complete, for the sole purpose of presale activity, which includes packaging and transferring physical possession of devices to distribution centers and retailers. Pre-sale activity does not include display or demonstration of devices to consumers. This provision prohibits physical transfer of RF devices subject to Supplier Declaration of
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