HQ 085661

February 15, 1990

CLA-2 CO:R:C:G 085661 AJS

CATEGORY: CLASSIFICATION

TARIFF NO: 8471.99.15; 8471.99.60; 8471.92.80; 8473.30.40;

8517.90.40

Mark K. Neville, Jr., Esq.

Lamb and Lerch

601 California Street

San Francisco, CA 94108

RE: Channel units

Dear Mr. Neville:

Your letter of August 18, 1989, requesting a tariff

classification under the Harmonized Tariff Schedule of the United

States Annotated (HTSUSA) of channel units imported by your

client Telco Systems-Network Access Corporation has been referred

to this office for reply.

FACTS:

The articles in question are channel units which are

inserted, along with a power supply, into a chassis in order to

form channel banks. The channel unit\'s basic function is to

convert analog and/or digital data signal inputs into a series of

digital signal outputs onto the channel bank line interface unit.

In the reverse direction, the channel unit receives the digital

signal output from the line interface unit and converts it into

the appropriate analog and/or digital channel output signal. In

short, the channel unit acts very much like a language translator

in that it takes electromagnetic signals and redefines them into

a form usable by other parts of a system. Basically, The channel

units perform this function by either translating signals,

transmitting signals or translating and transmitting signals.

The channel bank itself is a digital Pulse-Code-Modulated

(PCM) multiplexer designed to multiplex up to 24 analog and/or

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digital data circuits onto a PCM digital signal output. A

multiplexer is a system by which several individual information

carrying channels are combined for transmission over one bearer

(line, fiber or radio), using frequency division for analog

signals or time techniques for digital signals. This PCM signal

output is received by the far end channel bank and demultiplexed

into the original twenty-four digital signals originating from

the other end. This arrangement provides for channel to channel

connectivity between the local channel unit adapter circuit and

the far-end channel unit adapter circuit. The channel bank

consists of a line interface unit, power supply unit, chassis and

up to 24 channel units.

You state that there are basically two types of channel

banks. The so-called \"DCB 24\" is the basic channel bank which is

manually operated by use of dip switches. The \"Route 24\" channel

bank is a so-called intelligent channel bank. It is controlled

by software which permits remote programming and changes by means

of the software. The Route 24 technology would be linked to

either a VT 100 terminal or personal computer to allow for

network terminal management. However, your client has received a

ruling (NY 835316) on a Muxview channel bank which you claim does

not apply to this merchandise.

The channel units in question consist of four models which

are all based on the model 2440-00. This model is a device that

connects customer provided terminal analog equipment (CPE or

customer premises equipment) to transmission and switching

equipment. Data analog signals transmitted from the CPE are

converted to Pulse-Code-Modulation for multiplexing onto a

digital system. Received digital data signals are converted to

analog signals for transmission to the CPE. The PCM codec

performs the analog-to-digital and digital-to-analog conversion.

The 2440-00 provides the 6-wire interface toward the CPE for

signaling and data transmission toward the digital data

processing center via an interface unit. Basically, this model

and the other models at issue translate and transmit electro-

magnetic signals

The first model is the 2443-20 which is identical to the

2440-00, except that it provides a 2-wire interface towards the

CPE for signaling and data transmission. In a point-to-point

network application it interfaces one end of the network.

The second model is the 2443-10 which is identical to the

model 2443-20, except that it provides dedicated network

signalling features for signaling purposes toward the digital

data center.

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The third model is the 2443-40 which is almost identical to

the 2443-20. However, it is different in that it can be remotely

optioned and tested by using a terminal via specific software and

an interface unit.

The final model is the 2443-41, which is a cost reduced

version of the model 2443-40.

ISSUE:

Whether the channel units in question are properly

classifiable within heading 8471, HTSUSA, which provides for

automatic data processing machines and units thereof; or within

heading 8517, HTSUSA, which provides for electrical apparatus for

line telephony or telegraphy.

LAW AND ANALYSIS:

Classification of merchandise under the HTSUSA is governed

by the General Rules of Interpretation (GRI\'s). GRI 1 provides

that classification is determined first in accordance with the

terms of the headings of the tariff and any relative section or

chapter notes.

Heading 8471 provides for automatic data processing (ADP)

machines and units thereof. The article in question clearly does

not satisfy the description of an ADP machine within the meaning

of Chapter 84, Note 5(A). However, ADP machines may be in the

form of a system consisting of a variable number of separately

housed units. A unit is to be regarded as part of the complete

system if:

\(a\) It is connectable to the central processing unit either

directly or through one or more other units; and

\(b\) It is specifically designed as part of such a system (it

must, in particular, unless it is a power supply unit,

be able to accept or deliver data in a form (code or

signals) which can be used by the system). Chapter 84,

Note 5(B).

A channel bank does not satisfy this description of a

separate unit of an ADP system. It is not specifically designed

as a part of an ADP system. Instead, the channel bank is

designed to translate and/or transmit signals between two points.

This function could be for a telephone system or a telegraph

system. An article which has a function outside the scope of

heading 8471 cannot be considered specifically designed as part

of an ADP system. Furthermore, the fact that the customer may

adapt a channel bank to meet their particular needs does not mean

that the article is specifically designed as part of an ADP

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system. Instead, the article in question is designed for special

configuration by the customer for uses which could involve an ADP

system, a voice communication system or a data communication

system, or both.

Explanatory Note (EN) 84.71 I(A), states that digital data

processing systems \"may also include peripheral units . . . de-

signed to increase the capacity of the system, for instance, by

expanding one or more of the functions of the central unit (see

Part (D) below).\" Part I(D) states that this heading covers

separately presented constituent units of data processing

systems. (D)(4) lists as an example of a constituent unit,

\"\[c\]ontrol and adapter units such as those to effect inter-

connection of the central processing unit to other digital data

processing machines, or to groups of input units or output units

which may comprise visual display units, remote terminals etc.

This category includes channel to channel adapters used to

connect two digital systems to each other.\"

You claim that EN 84.71 (I)(D)(4) has a twofold application.

First, it describes the function of the channel bank, of which

the imported channel unit will be one of four constituent parts.

Second, compatibility for channel to channel linkage is the

specific function of the imported channel units themselves. In

addition, you claim that channel banks are used to connect two

digital systems to each other as shown in the submitted point-

to-point diagram. Therefore, you claim that channel banks are

specifically provided for as channel to channel adapters by the

ENs to heading 84.71. We do not agree with this application of

EN 84.71.

Tariff terms are construed in accordance with their common

and commercial meaning. Nippon Kogasku (USA), Inc. v. United

States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial

meaning may be determined by consulting dictionaries, lexicons,

scientific authorities and other reliable sources. C.J. Tower &

Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982).

Channel adapters are devices which permit connections between

various data channels of differing equipment. C.J. and R.J.

Sippl, Computer Dictionary and Handbook (3rd ed. 1980), p. 65. A

data channel is a bidirectional data path between the input/

output devices and the main memory in a digital computer that

permits one or more input/output operations to take place

concurrently with computation. Id. Data channels are synonymous

with channels which are described as \"\[a\] physical path along

which data may be transferred or transmitted; or a physical path

along which data may be stored serially for subsequent recovery.

Martin H. Weik, Standard Dictionary of Computers and Information

Processing (2nd ed. 1977), at 60. Furthermore, a channel is also

described as that portion of the central processing unit (CPU) of

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a computer which connects input and output devices to the CPU.

Van Nostrand\'s Scientific Encyclopedia, (VN) (7th ed. 1988),

p\. 565.

The channel bank and constituent channel units do not

satisfy the above description of channel adapters. They are not

related to data channels or channels. Instead, they translate

and/or transmit signals via a line interface apparatus. This

function is not related to that of the channel adapters as

described within EN 8471. Based on the fact that the channel

bank and constituent units are not an ADP machine or unit

thereof, they are thus excluded from classification within

heading 8471.

You state that channel units are used in both telephonic and

telegraphic applications. Heading 8517 provides for \"\[e\]lectri-

cal apparatus for line telephony or line telegraphy.\" The ENs

to heading 85.17 state that this phrase \"means apparatus for the

transmission between two points of speech or sound (or symbols

representing written messages, images or other data), by

variation of an electric current or of an optical wave flowing in

a metallic or dielectric (copper, optical fibers, combination

cable, etc.) circuit connecting the transmission station to the

receiving station.\" Channel banks are used for telephonic and

telegraphic purposes and are apparatus for the transmission

between two points of electromagnetic signals in the manner

described above. Thus, channel banks and their units are

classifiable by the terms of heading 8517 as electrical apparatus

for line telephony or line telegraphy.

There are three basic groupings of equipment used in modern

telecommunications: Customer premises equipment or \"end point\"

apparatus,such as telephones and other types of terminals,

transmission equipment such as certain multiplexers or repeaters,

and switching equipment. VN p. 2773. This equipment is linked

together as a network by an assortment of computers and software

programs. Telephony itself is defined as \"\[t\]he technology of

communicating speech and other information between telephones and

other terminals, using analog or digital signals transmitted via

electrical or lightwave circuits. The information may be in the

form of speech, music, data, facsimile, or video communications.\"

VN p. 2772. Telephony is also defined as \"\[t\]he transmission of

speech, data, graphics, or video signals to a distant point by

means of electric waves, digital pulses, and increasingly, by

light pulses sent through ultrapure, hair thin glass fibers.\"

McGraw-Hill Encyclopedia of Science &

Technology, (McG-H) (6th ed. 1987), vol. 17, p. 172. Telephonic

communications consist of three elements: \"(1) telephone sets

that convert sound energy to electric waves and back again; (2)

transmission systems that carry signals over distance without

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distortion and attenuation; and (3) switching systems that

connect one caller to another.\" Id. Channel banks involve the

use of CPE and transmit and translate signals between points in

the manner described by the term \"telephony\".

Heading 8517 provides for telephonic switching apparatus.

Switching equipment involves the use of wires connected from

telephones to a central point, called an exchange or central

office, where individual connections to other telephones are made

by switches. VN p. 2781. Customs has previously stated that

switching apparatus permit the connection of two or more

terminals. (HQ 554295, 1/15/87). Switching systems act to

direct messages toward their ultimate destination or address.

McGraw-Hill Encyclopedia of Electronics and Computers (McG-Hill

E & C), (2nd ed. 1988), p. 892. In addition, switching apparatus

provide one of three functions: signalling, controlling, and

switching of electromagnetic signals. Id p. 5. This equipment

performs traffic management and measurement, maintenance,

routing, trouble shooting, and the like. Id. The channel banks

and their constituent units do not satisfy these descriptions of

switching apparatus. They perform a translation and transmission

function, not a switching function.

The ENs state that heading 8517 covers all electrical

apparatus for line telephony or line telegraphy, including the

special apparatus used for carrier-current line systems (CCLS).

EN 85.17. CCLS, used in both telephony and telegraphy, are

\"based on the modulation of an optical source or of an electrical

frequency by impulses representing speech, messages or other

data. The apparatus of this group consists, in the transmitting

section, of oscillators, modulators, etc., and in the receiving

station, of filters, demodulators, etc. This group includes

combined modulators-demodulators (modems).\" EN 85.17(III).

Channel banks are used in both telephony and telegraphy. They

are also based on the modulation of an electromagnetic signal by

impulses which can represent speech, messages or other data.

Thus, channel banks satisfy the description of CCLS apparatus

within this heading.

You state that the channel bank is a Pulse-Code-Modulated

multiplexer. Pulse code modulation (PCM) was invented in 1939

and is a method of transmitting continuously varying message

waves. McG-Hill E & C, (2nd ed. 1988), p. 729. PCM is the

method employed to convert analog signals into digital form for

transmission or binary storage. Telecommunications Systems and

Service Directory, (3rd ed. 1988), p. 759. PCM systems are

widely used in many ways and for many purposes by private and

public communications companies. MG-Hill E & C, p. 729. CCLS

apparatus involve the modulation of both analog and digital

signals for transmission, and are used in both line telephony and

line telegraphy.

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Multiplexing involves the various techniques used to enable

the transmission of multiple messages through a common channel.

McGraw-Hill, p. 434. The two techniques used for multiplexing

are frequency division and time division. Id. You state that

the channel unit\'s basic function is to convert analog and

digital signals into digital signal outputs. In addition, you

state that the channel bank is a multiplexer which uses frequency

division or time techniques to convert several channels into one

for transmission. CCLS multiplexes analog and digital signals

for transmission and reception for both telephony and telegraphy.

Section XVI, Note 2(a), states that \"\[p\]arts which are goods

included in any of the headings of chapters 84 and 85 . . . are

in all cases to be classified in their respective headings.\"

Section XVI, General EN (II), states that parts which are

suitable for use solely or principally with particular machines

or apparatus are classified in the same heading as those machines

or apparatus. Channel units are solely used with channel banks

and therefore are classifiable as a part of a channel bank within

heading 8517. Parts for the apparatus of heading 8517 are

classifiable within subheading 8517.90. The channel units are

specifically provided for within subheading 8517.90.40 as other

parts of telephonic apparatus.

The articles in question are classifiable as parts of

telephonic apparatus and not telegraphic apparatus because they

involve the transmission of voice and data signals. As stated

previously, \"telephony\" can involve the transmission of both

speech and data signals. While telegraphic apparatus involve the

transmission of impulses representing texts or images. EN

85.17(II). The channel units at issue clearly fall within the

subheading for parts of telephonic apparatus because they involve

the transmission of both voice and data signals.

HOLDING:

The channel units in question are classifiable within

subheading 8517.90.40, HTSUSA, which provides for other parts of

telephonic apparatus dutiable at 8.5 percent ad valorem.

Sincerely,

John Durant, Director

Commercial Rulings Division