**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * |                              |
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| Rath Microtech Complaint         | ) |                              |
| Regarding                        | * |                              |
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| Electronic Micro Systems, Inc.   |   |                              |
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| Elevator Emergency Telephones    | * |                              |
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| Electronic Micro Systems, Inc.   | * |                              |
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| Petition for Waiver              |   |                              |
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**MEMORANDUM OPINION AND ORDER**

**Adopted: September 14, 2001 Released: September 17, 2001**

By the Acting Chief, Network Services Division:

# introduction

1.  Before us is a request by Electronic Micro Systems, Inc. (EMS) for a
    limited waiver of labeling requirements and on-hook impedance
    limitations specified in Federal Communications Commission
    (Commission or FCC) rules.[^1] EMS's waiver request is made in
    response to the above-captioned complaint by Rath Microtech.[^2] In
    its complaint, Rath Microtech argues that EMS's emergency elevator
    telephones are not properly registered or labeled and that they fail
    to comply with on-hook impedance limitations as required by Part 68
    of the Commission's rules. Specifically, the complaint alleges
    potential violations by EMS of sections 68.2, 68.102, 68.214,
    68.300, 68.312 of the Commission\'s rules[^3] in connection with
    EMS's sale of equipment that did not meet impedance limitations, its
    failure to properly register modifications to its elevator
    telephone, and its sale of a single telephone to Rath Microtech that
    did not meet labeling requirements.

2.  With regard to the complaint, we conclude that EMS did violate
    certain Commission rules. We therefore grant the complaint, in part.
    Because, however, the violations have been corrected and there is no
    evidence to indicate that the violations were willful or repeated,
    we decline to take any enforcement action against EMS. We therefore
    also deny the complaint, in part. In addition, we conclude that it
    is in the public interest to conditionally grant EMS's waiver
    request.

# background

3.  Sections 68.2 and 68.102 of the Commission's rules require that
    terminal equipment connected to the public switched telephone
    network (PSTN) meet the technical requirements for protection of the
    PSTN and be registered under Part 68 of the Commission's rules (or
    connected through protective circuitry).[^4] If information provided
    about terminal equipment in an original application changes, as in
    the case of a new model, another application must be filed for a new
    registration number.[^5] Section 68.300 of the Commission's rules
    requires that the registration number and certain other information
    be displayed on the exterior surface of the terminal equipment.[^6]

4.  Section 68.312 of the Commission's rules specifies the limitations
    for on-hook impedance.[^7] It restricts the permissible limit for
    direct current flowing between the tip and ring conductors within a
    telephone or other terminal equipment, and the limit for direct
    current flowing between the tip and ring conductors and the earth
    round, when the telephone is in the on-hook condition.
    Non-compliance with on-hook impedance limitations can interfere with
    loop integrity testing, and can lead to false trouble reporting and
    extra service calls.

# Rath Microtech's complaint

5.  *Background*. EMS is a manufacturer of elevator emergency
    telephones. Rath Microtech, also a manufacturer of elevator
    emergency telephones, has three primary areas of complaint against
    EMS arising from Rath Microtech's purchase of one of EMS's elevator
    emergency telephones. First, Rath Microtech charges that EMS has
    been selling telephones that it has modified but for which it has
    not sought a new registration number. In particular, Rath Microtech
    argues that EMS sells a number of models, including PBX-DV, under
    one registration number (HCMUSA-74085-SP-N) that was originally
    issued for model HFP1 (HF1 Series). Second, Rath Microtech argues
    that EMS's telephone does not comply with section 68.312 limitations
    for on-hook impedance. Independent laboratory tests commissioned by
    Rath Microtech showed that the EMS telephone exceeded on-hook
    impedance limitations. Third, Rath Microtech argues that EMS does
    not label its equipment, in violation of section 68.300. Rath
    Microtech asks that EMS be made to comply with all of the
    requirements of Part 68 regulations.

6.  *Discussion*. In analyzing Rath Microtech's complaint, we first
    consider whether the Commission's rules have been violated. If so,
    we next consider whether any enforcement action, such as issuance of
    a notice of apparent liability, is warranted. In doing so, we also
    consider whether any demonstrated violation is willful or
    repeated.[^8] The Commission may also impose conditions on a
    regulatory license as a result of rule violations. Here, we find
    that EMS violated certain of the Commission's regulations in Part
    68, but the violations were not of a willful or repeated nature. We
    therefore decline to take enforcement action against EMS.

7.  *Equipment Registration*. Commission rules require that terminal
    equipment be registered.[^9] EMS acknowledges that it did not
    re-register modifications to the electronics board of its elevator
    telephone made in a ten month period prior to September 29, 1997.
    EMS indicates that it uses only one type of electronics board that
    it puts into all its telephones, and that this board has undergone
    modifications that EMS now realizes should have been registered. EMS
    argues that this failure was not the result of lack of care or
    negligence, however, because it relied on the expertise of Rockford
    Engineering Services (Rockford) to ensure that its telephone
    continued to comply with Part 68 regulations.[^10] EMS acted
    promptly to apply for a new registration once the error was brought
    to its attention, and states that it is now fully compliant.

8.  We conclude that EMS failed to properly register its emergency
    elevator telephone. We find, however, no evidence to indicate that
    EMS's violation was willful or repeated. EMS's telephones were
    promptly registered correctly when the violation was brought to its
    attention. Accordingly, we find no enforcement action on this issue
    is warranted.

9.  *On-hook Impedance Limits.* Commission rules require that the amount
    of direct current flowing between the tip and ring conductors within
    a telephone or other terminal equipment, and the amount of direct
    current flowing between the tip and ring conductors and the earth
    round, when the telephone is in the on-hook condition, may not
    exceed certain levels.[^11] Tests by CCL requested by Rath
    Microtech, by U.S. Tech requested by EMS, and by the Commission,
    confirmed that EMS's telephone did not achieve the required results.

10. EMS employed Rockford[^12] to test its Hand Free Phone series HF1
    telephone prior to applying for certification with the Commission.
    Rockford provided EMS with a Continuing Compliance notice in
    January 1997. On February 27, 1997, the Commission issued a
    registration (number HCMUSA-74085-SP-N) based on the Rockford test
    results provided by EMS. EMS states that it has never received any
    complaint regarding on-hook impedance limits of its telephones and
    that it was first notified of Rath Microtech's complaint on July 21,
    1997, through an EMS customer who had received a facsimile
    transmission of the complaint from Rath Microtech. Upon receiving
    this complaint, EMS immediately sent its telephone to Rockford for
    retesting.[^13] On July 31, Rockford confirmed its original
    assessment that the telephone complied with Part 68 standards. On
    July 26, EMS sent the telephone to a different laboratory, U.S.
    Tech, for retesting. U.S. Tech found that the telephone failed Part
    68 on-hook impedance limitations. Thereafter EMS worked with its
    contractors to redesign and modify the telephone. EMS states that
    the use of a 180-volt Transient Volt Suppressor (TVS) caused the
    non-complaint condition. EMS resubmitted the telephone, modified to
    remove the TVS, to U.S. Tech for retesting and received notification
    on August 19, 1997 that the modified telephone met the Part 68
    on-hook impedance criteria. EMS states that it replaced the TVS in
    its telephones beginning September 1, 1997. EMS filed a new
    registration application with the Commission for the modified
    telephone, which was granted on September 29, 1997.

11. We conclude that EMS's telephones manufactured between March 1, 1997
    and September 1, 1997 failed to comply with section 68.312 on-hook
    impedance limitations. We further conclude that there is no evidence
    to indicate that EMS's violation was willful or repeated, based on
    the actions that were taken by EMS before and after this violation
    was discovered. Accordingly, we decline to impose any enforcement
    action against EMS. We note that EMS requests a waiver, discussed
    *infra*, to allow the non-compliant telephones sold between March 1,
    1997 and September 1, 1997 to remain in use by the purchasers. As
    discussed below, we conclude that a conditional waiver of section
    68.312 is warranted.[^14]

12. *Labeling Terminal Equipment*. Commission rules require that
    specific identifying information must be prominently displayed on an
    outside surface of all terminal equipment.[^15] Rath Microtech
    ordered a single telephone from EMS that was not labeled as required
    by section 68.300. EMS admits that that telephone was not properly
    labeled, but explains that it was a single occurrence. EMS states
    that Rath Microtech's order came at the end of a working day, after
    the regular staff had left, and was presented as a rush order that
    could not wait until the following day.[^16] In an effort to satisfy
    a supposed customer, the president of EMS shipped the telephone
    himself, but was unaware that it did not include the correct
    labeling.[^17] Under these unique circumstances of this single
    incident, and due to EMS's correction of this matter, we find that
    this violation was not willful or repeated. Accordingly, we find no
    enforcement action is warranted.

**IV. EMS WAIVER REQUEST**

13. EMS requests a waiver[^18] of the requirements in section 68.312 for
    10,326 non-compliant telephones that were sold between March 1, 1997
    and September 1, 1997.[^19] EMS states that 8,633 telephones were
    sold directly to elevator companies or to a manufacturer of elevator
    cabs, 1,380 telephones were sold to distributors of elevator
    equipment, and the remaining 313 telephones were sold to various
    other users. EMS believes that a significant number of the
    telephones are connected to a private branch exchange (PBX) or to
    stand-alone intercom systems, and hence would not impact the PSTN.
    EMS says, however, that it has no way of ascertaining how many of
    its units are connected directly to the PSTN.

14. EMS also requests a waiver of sections 68.2 and 68.102, which
    require *inter alia* that terminal equipment must be registered. EMS
    states that it misunderstood the Commission's rules and failed to
    amend its registration number each time modifications were made to
    the telephone. EMS indicates that it is aware of the importance of
    complying with FCC rules and that it is now aware of the requirement
    to change its registration number each time a new model is
    developed. In support of its waiver, EMS argues that no harm is
    being caused to the public interest because these telephones are not
    sold to the general public, but typically are purchased and
    installed by elevator companies. Moreover, EMS argues, upon
    realizing its mistake, it immediately took steps to correct its
    compliance by changing the FCC labels and its FCC customer
    information letter.

15. *Waiver Standard.* In analyzing EMS's waiver request, we consider
    established legal standards for waiver of the Commission\'s rules.
    The Commission will adhere strictly to its rules unless a party can
    demonstrate that \"in the public interest the rule should be
    waived.\"[^20] Furthermore, the Commission may only waive a
    provision of its rules for "good cause shown."[^21] The Commission
    must take a \"hard look\" at applications for waiver[^22] and must
    consider all relevant factors when determining if good cause
    exists.[^23] The party petitioning the Commission for a waiver bears
    the heavy burden of showing good cause: \"\[a\]n applicant \[for a
    waiver\] faces a high hurdle even at the starting gate.\"[^24] In
    addition, \"\[t\]he agency must explain why deviation better serves
    the public interest, and articulate the nature of the special
    circumstances, to prevent discriminatory application and to put
    future parties on notice as to its operation.\"[^25] Finally, a
    waiver of one or more portions of the Commission's rules does not
    excuse an applicant from compliance with the Commission's other
    requirements.[^26]

16. The test for a waiver of Part 68 rules is well established.[^27] We
    have formulated and applied a two-part test, the *Nortel Test*, to
    determine whether a request for waiver of Part 68 rules to permit
    registration of non-compliant customer premises or terminal
    equipment is warranted. The first prong of the test is an evaluation
    of the terminal equipment's benefit to the public interest, with an
    emphasis on the potential gain in consumer choice and value. The
    second prong of the test is an evaluation of the terminal
    equipment's potential for causing network harm.[^28]

17. *Discussion.* We find that a conditional waiver of section 68.312
    the Commission's rules is warranted. Regarding the first prong of
    the *Nortel Test*, we conclude that there is a benefit to the public
    interest provided by the elevator telephones at issue. Elevator
    telephones permit emergency calls from the elevator in the event of
    a mechanical or power failure, or in the event of the personal
    emergency of a passenger. Clearly, their existence is in the public
    interest. Moreover, if a waiver is not granted, the purchasers of
    the more than ten thousand elevator telephones would have to remove
    their existing telephones and install new ones, or demonstrate that
    their telephones are connected to a PBX rather than to the PSTN, and
    thus will not cause harm to the PSTN. We conclude that the magnitude
    of this inconvenience to the telephone purchasers would be
    unjustified, and the benefit of allowing the telephones to remain in
    place outweighs any likely harm that their continued use might cause
    to the PSTN.

18. Further, regarding the second prong of the *Nortel Test,* we
    conclude that no harm to the PSTN is likely to occur by continued
    use of these telephones. The non-compliant telephones have been in
    use for several years. No report of any complaints about harm to the
    PSTN caused by these telephones has been made to EMS or to this
    Commission. We also note that, unlike most customer premises
    equipment regulated under Part 68, elevator telephones are routinely
    and frequently tested in the normal course of business. Local
    telephone companies tests elevator telephones from its central
    office using computerized testing equipment on almost a daily
    basis.[^29] In addition, elevator companies normally have
    maintenance contracts with building management companies that
    require testing of elevator telephones. EMS verifies that testing
    the operation of the telephone at least once a month is a common
    industry practice.[^30]

19. EMS has stated that many of its customers connect the elevator
    telephones to a PBX system. Non-compliant telephones that are
    connected to a PBX rather than directly to the PSTN will not cause
    harm to the PSTN. Non-complaint telephones connected directly to the
    PSTN could, however, potentially cause false on-hook readings, which
    can interfere with loop integrity testing, and can lead to false
    trouble reporting and extra service calls. Such occurrences would be
    discovered through central office or engineer testing. No complaints
    from telephone companies or consumers have been reported thus far.

20. We also find that a conditional waiver of sections 68.2 and 68.102
    of the Commission's rules is warranted. In addition to finding, as
    we found above under the first prong of the *Nortel Test,* that
    there is a benefit to the public interest despite the failure to
    properly label the telephones at issue, we also find that no harm
    has occurred or is likely to occur to the PSTN under the second
    prong due to improper labeling. Although terminal equipment owners
    and telephone companies need to be able to identify the manufacturer
    of non-compliant equipment, the purchasers in this instance, which
    are not members of the general public, have actual knowledge of the
    manufacturer's identity, and thus have not been harmed by the
    improper labeling.

21. We therefore grant EMS a waiver of sections 68.2, 68.201, and 68.312
    of the Commission's rules, conditioned as follows. EMS need not
    recall or replace any of the non-compliant telephones. EMS shall,
    however, as a condition of this waiver, replace with a comparable
    compliant telephone, at no charge to its customers, any telephone
    returned to EMS containing the TVS component that is shown by the
    customers' telephone company to have caused harm to the PSTN.

# ORDERiNG CLAUSES

22. Accordingly, pursuant to the authority delegated in sections 0.91
    and 0.291 of the Commission's rules, 47 C.F.R. 0.91, 0.291, and
    section 1.3 of the Commission's rules, 47 C.F.R. 1.3, IT IS HEREBY
    ORDERED that the complaint filed by Rath Microtech is GRANTED IN
    PART, and DENIED IN PART.

23. IT IS FURTHER ORDERED that the request filed by Electronic
    Microsystems, Inc. for waiver of sections 68.2, 68.102, and 68.312
    of the Commission's rules, 47 C.F.R. §§ 68.2, 68.102, 68.312, by
    Electronic Microsystems, Inc., IS GRANTED subject to the following
    condition: Electronic Microsystems, Inc. must replace with a
    comparable compliant telephone, at no charge to its customers, any
    non-compliant telephone containing the TVS component sold between
    March 1, 1997 and September 1, 1997 and returned to Electronic
    Microsystems, Inc. that is shown by the customers' telephone company
    to have caused harm to the public switched telephone network.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Diane Griffin Harmon
>
> Acting Chief, Network Services Division
>
> Common Carrier Bureau

[^1]: Letter to Ms. Geraldine A. Matise, Chief, Network Services
    Division, from Richard D. Marks and Robert A. Mazer, Attorneys for
    Electronic Micro Systems, Inc., Re: Electronic Micro Systems, Inc.
    Request for Limited Waiver of Sections 68.312, 68.2 and 68.102 of
    the Commission\'s Rules, September 3, 1997 (*EMS Waiver Request*).

[^2]: Letter to Mr. William von Alven, Federal Communications
    Commission, from Jessica L. Bulgrin, Marketing/Product Manager, Rath
    Microtech, July 18, 1997 (*Rath Microtech Complaint*).

[^3]: 47 C.F.R. §§ 68.2, 68.102, 68.214, 68.300, 68.312 (1997).

[^4]: 47 C.F.R. §§ 68.2, 68.102 (1997).

[^5]: 47 C.F.R. § 68.214 (1997).

[^6]: 47 C.F.R. § 68.300 (1997).

[^7]: 47 C.F.R. § 68.312 (1997).

[^8]: *See generally* 47 U.S.C. §§ 501 - 502. *See also* *Complaints by
    Verilink Corporation*, 1986 WL 291578 (CCB 1986).

[^9]: 47 C.F.R. § 68.102 (1997).

[^10]: *EMS Waiver Request* at 2.

[^11]: 47 C.F.R. § 68.312 (1997).

[^12]: Rockford is an EN 45001 accredited laboratory; this accreditation
    is the European equivalent of ISO/IEC Guide 25.

[^13]: Letter from Dan Gilbert, President of EMS, to William von Alven,
    Federal Communications Commission, (undated, references Mr. von
    Alven's letter of 22 July 1997)(*EMS August 1997 Letter*).

[^14]: *See* section IV, *infra*.

[^15]: 47 C.F.R. § 68.300 (1997).

[^16]: Electronic Micro Systems, Inc., Request for Limited Waiver,
    September 3, 1997, at 4.

[^17]: *Id.*

[^18]: This waiver request seeks retroactive authority to permit
    connection to the PSTN of equipment that EMS has already sold, and
    that already has been connected to the PSTN for some years.

[^19]: EMS states that up to 400 volts of induced voltage caused by the
    mechanical operations of an elevator can enter the telephone line
    and cause damage to the telephone's circuitry, and the TVS used in
    the non-compliant telephones was intended to protect the telephones
    from such damage.

[^20]: *FPC v. Texaco Inc*., 377 U.S. 33, 39 (1964).

[^21]: 47 C.F.R. §1.3.

[^22]: *Id.*

[^23]: *Citizens to Preserve Overton Park, Inc. v. Volpe*, 401 U.S. 402,
    416 (1971).

[^24]: *WAIT Radio v. FCC*, 418 F.2d 1153, 1157 (D.C. Cir. 1969).

[^25]: *Northeast Cellular Telephone Company, L.P. v. FCC*, 897 F.2d
    1164, 1166 (D.C. Cir. 1990).

[^26]: *See* 47 C.F.R. § 1.3; *Alameda Order* at 12139.

[^27]: Alcatel USA, Inc. Petition for Waiver of the Signal Power
    Limitations Contained in Section 68.308(e) of the Commission\'s
    Rules, File No. NSD 00-37, *Memorandum Opinion and Order*, DA
    00-388, \-- FCC Rcd \-\-- (Com. Car. Bur. Network Svcs. Div. 2000)
    ("*Alcatel Order*").

[^28]: ^?^ *Id.*

[^29]: ^?^ EMS Request for Limited Waiver, *supra*, at 2-3.

[^30]: ^?^ Electronic Micro Systems, Inc., letter to Ms. Geraldine A.
    Matise, Chief, Network Services Division, October 27, 1997, at 2.