52088 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

Agricultural commodities, Pesticides 

and pests, Reporting and recordkeeping 

requirements. 

Dated: September 13, 2021. 

Marietta Echeverria, 

Acting Director, Registration Division, Office 

of Pesticide Programs. 

Therefore, for the reasons stated in the 

preamble, EPA is amending 40 CFR 

chapter I as follows: 

PART 180—TOLERANCES AND 

EXEMPTIONS FOR PESTICIDE 

CHEMICAL RESIDUES IN FOOD 

■ 1. The authority citation for part 180 

continues to read as follows: 

Authority: 21 U.S.C. 321(q), 346a and 371. 

■ 2. In § 180.582, amend the table in 

paragraph (a)(1) by adding in 

alphabetical order the commodity 

‘‘Pomegranate’’ and a footnote 1 at the 

end of the table to read as follows: 

§ 180.582 Pyraclostrobin; tolerances for 

residues. 

(a) * * * 

(1) * * * 

Commodity Parts per 

million 

*****

Pomegranate .............................. 0.3 

*****

1There is no U.S. registration on coffee, 

bean, green as of September 30, 2009. 

* * * * * 

[FR Doc. 2021–20251 Filed 9–17–21; 8:45 am] 

BILLING CODE 6560–50–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 2 and 95 

[ET Docket No. 20–382; FCC 21–72; FR ID 

43219] 

Allowing Earlier Equipment Marketing 

and Importation Opportunities 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: The Federal Communications 

Commission (Commission) adopts 

targeted enhancements that will 

modernize the Commission’s marketing 

and importation rules to allow 

radiofrequency (RF) equipment 

manufacturers to better gauge consumer 

interest and prepare for new product 

launches. These steps will further the 

communications sector’s ability to drive 

innovation that will advance America’s 

global competitiveness and promote 

economic growth. As product 

development cycles have accelerated, 

new marketplace models and 

assessment tools have emerged that rely 

on individual interest to fund products, 

optimize production, and match imports 

to anticipated sales. The rules the 

Commission is adopting will allow 

manufacturers to better use these tools 

to quickly deploy new technologies and 

devices to consumers while ensuring 

that communications equipment subject 

to equipment authorization continues to 

meet the Commission’s stringent 

program requirements. 

DATES: Effective October 20, 2021, 

except for §§ 2.803(c)(2)(i) and 

2.1204(a)(11), which contain 

information collection requirements that 

are not effective until approved by the 

Office of Management and Budget. The 

Federal Communications Commission 

will publish a document in the Federal 

Register announcing the effective date 

for those sections. 

FOR FURTHER INFORMATION CONTACT: 

Jamie Coleman, Spectrum Policy Branch 

Chief, Policy and Rules Division, Office 

of Engineering and Technology, at (202) 

418–2705 or Jamie.Coleman@FCC.gov. 

For additional information concerning 

the Paperwork Reduction Act 

information collection requirements 

contained in this document, contact 

Nicole Ongele, Office of Managing 

Director, at (202) 418–2991 or 

Nicole.Ongele@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Report 

and Order, ET Docket No. 20–382, FCC 

21–72, adopted and released June 17, 

2021. The complete text of this 

document is available by downloading 

the text from the Commission’s website 

at https://www.fcc.gov/document/ 

allowing-earlier-equipment-marketingand-importation-opportunities-1. When 

the FCC Headquarters reopens to the 

public, the full text of this document 

also will be available for public 

inspection and copying during regular 

business hours in the FCC Reference 

Center, 45 L Street NE, Washington, DC 

20554. Alternative formats are available 

for people with disabilities (Braille, 

large print, electronic files, audio 

format) by sending an email to FCC504@

fcc.gov or calling the Commission’s 

Consumer and Governmental Affairs 

Bureau at (202) 418–0530 (voice), (202) 

418–0432 (TTY). 

Final Regulatory Flexibility Analyses 

The Regulatory Flexibility Act of 

1980, as amended (RFA) requires that an 

agency prepare a regulatory flexibility 

analysis for notice and comment 

rulemakings, unless the agency certifies 

that ‘‘the rule will not, if promulgated, 

have a significant economic impact on 

a substantial number of small entities.’’ 

As required by the RFA, an Initial 

Regulatory Flexibility Analysis (IRFA) 

was incorporated in the Notice of 

Proposed Rulemaking (NPRM) (86 FR 

2337, Jan. 12, 2021). The Commission 

sought written public comment on the 

proposals in the NPRM, including 

comments on the IRFA. No comments 

were filed addressing the IRFA. 

Accordingly, the Commission has 

prepared a Final Regulatory Flexibility 

Analysis (FRFA) concerning the 

possible impact of the rule changes 

contained in this document on small 

entities. This present FRFA conforms to 

the RFA. 

Paperwork Reduction Act 

This document contains modified 

information collection requirements. 

The Commission, as part of its 

continuing effort to reduce paperwork 

burdens will invite the general public to 

comment on the information collection 

requirements contained in this 

document as required by the Paperwork 

Reduction Act of 1995, Public Law 104– 

13. In addition, the Commission notes 

that pursuant to the Small Business 

Paperwork Relief Act of 2002, Public 

Law 107–198, see 44 U.S.C. 3506(c)(4), 

we previously sought specific comment 

on how the Commission might further 

reduce the information collection 

burden for small business concerns with 

fewer than 25 employees. 

In this present document, we have 

assessed the effects of requiring 

marketing disclosures on RF equipment 

manufacturers, some of which may be 

small entities, to market and import RF 

equipment, and find that the 

Commission’s rules are not unduly 

burdensome. We believe the regulatory 

burdens the Commission is 

implementing are necessary to ensure 

that the public receives the benefits of 

innovative products and technologies in 

a prompt and efficient manner, and 

those burdens apply equally to large and 

small entities without differential 

impact. 

Congressional Review Act 

The Commission has determined, and 

Administrator of the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

concurs, that this rule is ‘‘non-major’’ 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52089 

under the Congressional Review Act, 5 

U.S.C. 804(2). 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. 801(a)(1)(A). 

Synopsis 

I. Background 

The Commission’s 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 procedure—certification 

or supplier’s declaration of conformity 

(SDoC). These procedures require, 

among other things, that RF devices are 

tested to show compliance with the 

Commission’s rules and technical 

standards. Currently the Commission’s 

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, RM–11857 (filed June 2, 

2020) (CTA Petition). CTA asserted that 

the Commission’s 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 Commission’s 

equipment marketing and importation 

rules that were informed to a large 

extent by the CTA Petition. 

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 industry’s 

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 Commission’s 

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 Commission’s 

equipment authorization regime. As a 

result, the Commission’s 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 

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 Commission’s 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 device’s 

country of origin. 

In summary, the Commission is 

adopting a new condition under 

§ 2.1204 and a revised exception under 

§ 2.803 of the Commission’s 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 Commission’s 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 

52090 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

contracts between manufacturers and 

wholesalers or retailers provided that 

delivery is made contingent upon 

compliance with the applicable 

equipment authorization and technical 

requirements. The Commission’s 

revisions to this condition expand 

conditional sales, and advertisements 

for such sales, to include other entities, 

including consumers, provided that the 

prospective buyer is advised at the time 

of marketing that delivery of the device 

is conditional upon successful 

completion of the applicable equipment 

authorization process. All devices must 

remain under the legal ownership of the 

initiating party (i.e., the manufacturer or 

developer), but physical transfer may be 

permissible depending on the 

applicable device authorization 

requirement. Physical transfer is 

prohibited for devices subject to the 

Supplier’s Declaration of Conformity 

equipment authorization process. 

Devices subject to certification can be 

physically transferred to contracting 

parties, other than the end user, for presale activity if the devices include a 

temporary label and the initiating party 

has retrieval processes in place. The 

Commission also adopts the proposed 

revision to § 95.391, which prohibits the 

manufacturing, importation, and sales of 

non-certified equipment for the Personal 

Radio Services, to reflect the marketing 

exception the Commission adopts and 

adds an additional reference to reflect 

the import condition the Commission 

adopts. 

A. Importation of RF Devices Prior to 

Equipment Authorization 

The Commission is adopting the 

proposal to modernize its rules to allow 

a limited number of RF devices to be 

imported into the United States prior to 

equipment authorization for pre-sale 

activities, including packaging and 

transferring physical possession to retail 

locations, if those devices are subject to 

equipment authorization via the 

certification process. The rule the 

Commission adopt adds a new 

condition to § 2.1204 of the 

Commission’s rules to allow the 

importation of up to 12,000 RF devices 

for pre-sale activity before the 

equipment successfully completes 

certification. The imported devices must 

be subject to the equipment 

authorization certification process (i.e., 

excluding devices subject to Supplier’s 

Declaration of Conformity process) for 

which an application has been 

submitted to a TCB. As noted above, the 

imported devices must include an 

externally-visible temporary label 

noting the prohibition of display to 

consumers, operation, and delivery of 

the device prior to the issuance of 

certification. The devices must also 

remain under legal ownership of the 

device manufacturer, developer, 

importer or ultimate consignee, or their 

designated customs broker, who must 

have in place a device retrieval process 

to be implemented in the event that the 

certification process is not successfully 

completed. The Commission believes 

this action will allow device 

manufacturers to better prepare for new 

product launches while guarding 

against a proliferation of unauthorized 

and non-compliant devices that might 

increase the risk of causing harm to 

consumers or other radio operations. 

The rule proposed by the Commission 

in the NPRM largely reflected the 

proposal made by CTA in its petition. 

The Commission proposed to allow up 

to 4,000 RF devices to be imported for 

pre-sale activities prior to being 

certified. In this case, such pre-sale 

activities would include imaging, 

packaging, and delivery of devices to 

retail locations, but ‘‘exclude the 

displaying of the device to consumers 

prior to equipment authorization.’’ CTA 

Petition at 12, n. 44. Under the proposal, 

limited importation could occur if the 

manufacturer has a reasonable belief 

that the device would receive 

authorization within thirty days of 

importation. Additionally, the 

Commission proposed that the device 

include a temporary label regarding 

related compliance restrictions and the 

manufacturer would be required to 

maintain legal ownership of the devices, 

even after delivery to retail locations, 

until authorization is received, and have 

a process in place to retrieve the devices 

in the event that authorization is not 

obtained. 

While all comments received support 

the proposal’s intent, they include 

several requests to modify specific 

aspects, including the numerical 

limitation on the devices imported, the 

requirement that a manufacturer have a 

reasonable belief that authorization will 

be granted within 30 days of 

importation, and labeling requirements. 

The Commission addresses the various 

issues below and modifies the 

Commission’s proposed rules, as 

appropriate, based on the comments 

received. 

Numerical Limitation. The 

Commission is adopting rules that limit 

to 12,000 the number of RF devices that 

can be imported for pre-sale activities. 

While the Commission proposed to 

limit this new import condition to 4,000 

devices, it asked whether a higher level, 

such as 8,000, would be more 

appropriate, whether a smaller number 

of devices would provide less risk of 

unauthorized devices becoming 

available to the general public, and 

whether any safeguards beyond a simple 

numerical limit would be necessary in 

this regard. Only HP Enterprise supports 

the proposed 4,000 device limit. 

Otherwise, commenters generally 

suggest that the Commission increases 

the device limit. Suggestions ranged 

from a non-specific increase, to a 10,000 

device limit, and a more widely 

supported 12,000 device limit. 

Comments proposing 12,000 devices 

generally state the larger limit would 

account for the number of potential 

retailers throughout the country based 

upon the estimated numbers of ‘‘big 

box’’ stores and wireless provider 

locations, among others. Comments also 

note that a limit greater than 10,000 

devices would increase the likelihood of 

more even distribution to both urban 

and rural areas while still being small 

enough to mitigate the potential risk of 

unauthorized widescale distribution. 

Based on the record, the Commission 

finds that the proposed importation 

limit of 4,000 devices would not be 

sufficient to achieve the intended 

benefits. The Commission therefore 

adopts rules permitting up to 12,000 

units of a particular device to be 

imported for pre-sale activities prior to 

the equipment being certified. As 

proposed, the Commission also adopts a 

provision to allow the importation of 

devices in excess of 12,000 subject to 

prior written approval from the Chief of 

the Office of Engineering and 

Technology. Overall, the Commission 

finds that a device limit of 12,000 will 

meet manufacturer and importer needs 

while not compromising the integrity of 

the Commission’s equipment 

authorization program. The 12,000-unit 

limit is a maximum limit for a particular 

device across all ports of entry into the 

United States. Importation in excess of 

12,000 units without prior written 

approval of the FCC is prohibited and 

may subject the manufacturer or 

importer to enforcement action. 

The Commission’s proposal did not 

specifically address how to differentiate 

devices when determining compliance 

with the maximum import quantity. 

Garmin provided comments suggesting 

that, in defining the importation limit 

for a device, the Commission applies the 

permissible quantity based on SKU 

number rather than to general product 

names or model brands. The 

Commission notes that restricting the 

importation limit to product name or 

model brand would restrict 

manufacturers from importing the full 

range of a new product, such as 

different sizes and product options. The 

Commission agrees with Garmin that 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52091 

additional clarification is necessary to 

provide certainty to manufacturers and 

importers that take advantage of the 

additional flexibility the Commission is 

providing regarding importation for presale activity. As such, the Commission 

is adopting an additional provision to 

clarify that devices with different FCC 

IDs are considered to be separate 

devices; i.e., up to 12,000 devices with 

the same FCC ID number may be 

imported for pre-sale activities. The 

Commission adopts this requirement as 

opposed to a SKU number-based 

requirement as suggested by Garmin 

because FCC ID is the officially 

recognized method for identifying 

equipment, is required by FCC rules to 

be labelled on the device, and can be 

tracked through the FCC equipment 

authorization system database; SKU 

numbers, on the other hand, have no 

regulatory meaning under FCC rules. 

Moreover, use of FCC ID will not be 

burdensome for manufacturers and 

importers because, as discussed below, 

devices subject to the Commission’s 

new rules may not be imported until an 

application for certification has been 

submitted and therefore an FCC ID will 

already be associated with such 

equipment. 

Submission of Application for 

Certification. In the NPRM, the 

Commission proposed to require that 

manufacturers importing devices under 

the proposed exception have ‘‘a 

reasonable belief that authorization will 

be granted within 30 days of 

importation.’’ The Commission asked 

several questions related to how 

manufacturers could comply with this 

requirement. Most commenters stating 

that 30 days would not be sufficient 

suggest that 90 days would be more 

appropriate. Two filers, Information 

Technology Industry Council and the 

Joint Commenters (Telecommunications 

Industry Association, Association of 

Home Appliance Manufacturers, 

Engine, The internet Association, 

INCOMPAS, the Rural & Agriculture 

Council of America, and TechFreedom), 

suggest that 60–90 days would be 

generally sufficient and, for devices that 

require a TCB to coordinate with the 

OET Lab prior to taking action on the 

certification application, via the preapproval guidance procedure, 120–180 

days would be ‘‘reasonable.’’ One 

commenter, Information Technology 

and Innovation Foundation, states that 

the increased complexity of devices 

would make enforcing an expectation 

requirement difficult and suggests that 

the Commission allow manufacturers 

options for ‘‘demonstrating reasonable 

belief of imminent authorization,’’ such 

as relying on process milestones. 

Similarly, Samsung suggests that 

delivery to an accredited test lab or TCB 

for testing would be an appropriate 

basis for a reasonable expectation of 

authorization. R Street Institute (R 

Street) also notes that determining 

compliance with the criterion would be 

difficult and suggests that the 

Commission provides manufacturers 

flexibility in this regard, provided that 

they maintain documentation 

‘‘demonstrating their internal logic 

regarding authorization.’’ 

The Commission believes that parties 

who avail themselves of the new 

importation exception should be 

permitted to do so only if they 

reasonably believe that a certification 

will be issued as close to the 

importation date as is possible. 

However, based upon the record, the 

Commission declines to adopt the 30- 

day timeframe. As many commenters 

suggest that the timeframe needed for 

certification can be unpredictable 

depending on device complexity and 

other factors, the Commission is 

adopting a rule that does not include a 

specific timeframe but is instead based 

on the submission of the equipment 

certification application. As the 

commenters’ recommendations are 

informed by their experiences with the 

equipment authorization process, 

requiring a reasonable belief of 

completion of certification activities 

within a specific timeframe would not 

accurately reflect the ‘‘real world’’ 

process in many circumstances. 

Similarly, if the Commission were to 

specify multiple timeframes to cover 

different situations, there would still be 

numerous scenarios not covered, thus 

adding an unnecessary level of 

complexity to the rule that could limit 

its utility and result in confusion and 

inconsistent applicability. 

Accordingly, the Commission is 

adopting a requirement that importation 

for pre-sale activities prior to the device 

receiving certification can only occur 

after compliance testing is complete and 

an application for certification has been 

submitted, in good faith, to a TCB. At 

that point, an applicant will have 

expended considerable time, effort, and 

money to develop a product as well as 

entered into a testing and approval 

process that requires expending 

additional resources. The Commission 

finds that this specific milestone reflects 

a point in the certification process by 

which the applicant can reasonably 

expect a grant. Allowing importation 

prior to the completion of compliance 

testing would increase the risk 

associated with distributing the 

unauthorized devices because the 

testing could reveal compliance issues 

that require device modification. The 

Commission will not require any 

additional process milestones to be 

tracked to demonstrate compliance with 

the adopted rule. The Commission notes 

that some aviation and maritime devices 

subject to the equipment certification 

process require additional reviews and 

approvals, such as from the Federal 

Aviation Administration and the United 

States Coast Guard. In some cases those 

additional approvals from other 

agencies must be done prior to 

submitting an application for FCC 

equipment certification and in some 

instances approval may be obtained 

concurrently. The rule the Commission 

adopts here has no impact on those 

requirements, but entities intending to 

avail themselves of this new import 

condition should consider the 

processing time and technical 

requirements of those reviews and 

approvals in relation to the certification 

process to determine when to begin 

importation under the new condition. 

Further, the Commission notes that 

parties must satisfy all conditions 

required for their equipment and 

comply with all conditions imposed by 

all relevant agencies under which the 

equipment is regulated; permission to 

market devices under FCC rules does 

not provide similar approval from other 

relevant agencies and all requirements 

must be satisfied in accordance with 

those agencies’ rules. The Commission 

expects applications to be filed in good 

faith, with accurate data and as 

completely as possible, and applicants 

must be responsive to any TCB requests 

for additional data. 

B. Marketing of RF Devices Prior to 

Equipment Authorization 

The Commission is adopting its 

proposal to allow expanded conditional 

sales of RF devices prior to 

authorization, with appropriate 

clarifications regarding applicability 

and conditions. The internet provides 

today’s consumer with numerous 

opportunities to obtain innovative new 

products both directly—via crowdfunding platforms at the developmental 

stages, and through sales and 

distribution services offered by 

manufacturers and developers—and 

indirectly, through third party 

marketplaces, both online and in 

person. This new-found ability to more 

easily obtain the latest products has led 

to savvier consumers, who have a 

greater awareness of technological 

developments and expect to obtain the 

newest products as soon as possible. At 

the same time, the ability to deal 

directly with consumers at the earliest 

52092 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

stages of development has created new 

efficiencies and investment 

opportunities that provide smaller 

entities a chance to enter the 

competitive marketplace. The 

Commission’s new rule will allow 

innovators to take advantage of modern 

product development practices and 

better satisfy the expectations of today’s 

consumer without diminishing the 

protections that the Commission’s 

overall marketing rules provide. 

In the NPRM, the Commission 

proposed to modify its marketing rules 

in a manner that would allow 

consumers to participate in the 

conditional sales of devices that have 

not received authorization. The 

Commission did not receive any 

comments objecting to its overall 

marketing proposal. Commenters did 

note generally that, in addition to 

allowing consumers to receive new 

devices sooner, the proposal would 

provide benefits throughout the supply 

chain that would allow production to 

better match expected demand, thus 

providing efficiencies that would lower 

costs and reduce waste in raw materials 

and energy. One comment suggests that 

the new marketing exception apply to 

the broadest category of devices and no 

commenters suggest excluding any 

devices. 

The Commission remains mindful 

that it must continue to protect against 

the possibility of unauthorized RF 

devices making their way to consumers 

and adopt rules intended to prevent 

such occurrences while expanding 

marketing opportunities for innovators. 

Additionally, the rules the Commission 

proposed in the NPRM to allow pre-sale 

activities for imported devices would 

not have permitted similar flexibility for 

domestically-produced devices. Thus, 

in adopting rules to permit marketing 

activities prior to equipment 

certification, the Commission also 

provides flexibility in the Commission’s 

marketing provisions to allow for presale activities similar to those that the 

Commission is allowing for imported 

devices. This action implements more 

consistent measures for similarlysituated devices with similar safeguards 

to prevent unauthorized devices from 

getting to consumers. Further, the 

Commission’s action will also benefit 

consumers, who will be able to see and 

examine devices earlier so that they can 

make more timely purchase decisions, 

and retailers, who will gain the 

opportunity to become familiar with the 

features associated with new devices to 

better prepare those devices for display 

and sale once they are certified and may 

be operated. 

As proposed in the NPRM, the 

Commission is broadening the 

applicability of the prior conditional 

sales contract provision found in 

§ 2.803(c) of the Commission’s rules, 

which now will allow for conditional 

sales to consumers. Specifically, the 

Commission is modifying § 2.803(c)(2)(i) 

to allow conditional sales contracts and 

advertising for RF devices that have not 

yet received authorization, under 

particular delivery and physical transfer 

conditions and a requirement that the 

contracting party advises the buyer at 

the time of marketing that the 

equipment is subject to FCC rules and 

delivery is conditional upon successful 

completion of the applicable equipment 

authorization process. 

In the NPRM, the Commission 

proposed to allow conditional sales 

contracts between manufacturers and 

potential customers. The intent was to 

broaden the rule that originally limited 

conditional sales to contracts between 

manufacturers and wholesalers or 

retailers, which was based on a concern 

that unauthorized devices that made 

their way to consumers could cause 

harmful interference to radio 

communications. Ensuring that 

unauthorized RF devices do not cause 

harm remains among the Commission’s 

highest concerns. However, recognizing 

that product marketing and distribution 

methods have evolved due to the 

internet and new crowd-funding 

practices which bring the consumer into 

direct contact with the developer or 

manufacturer, and based on the 

comments received in response to the 

NPRM, the Commission is adopting a 

more flexible rule that does not limit 

conditional sales contracts to 

transactions only between 

manufacturers and potential customers. 

In the NPRM, the Commission 

declined to propose a rule that included 

the term ‘‘responsible party’’ in lieu of 

‘‘manufacturer’’ as suggested by CTA, 

and instead proposed conditional sales 

contracts between manufacturers and 

potential customers. The Commission 

explained its concerns that, given the 

specific meaning of the term, 

‘‘responsible party’’ would not be 

appropriate in this context. Further, the 

Commission asked for comment on this 

determination and asked questions 

about more suitable alternatives. While 

no commenter suggests replacing 

‘‘manufacturer’’ with ‘‘responsible 

party,’’ Samsung Electronics America 

(Samsung) suggests that the Commission 

clarifies that affiliates and related 

corporate entities should be considered 

acceptable in the context of 

‘‘manufacturer.’’ Additionally, while not 

providing specific rule changes, 

Samsung and CTA suggest the 

Commission clarifies that the rule 

would also cover contracts between 

manufacturers and retailers/ 

wholesalers. 

The Commission’s intent in proposing 

to expand conditional sales contract to 

‘‘manufacturers and potential 

customers’’ was to broaden the pool of 

parties allowed to enter into conditional 

sales contracts with manufacturers, 

specifically to include consumers. 

Considering the information in the 

record, the Commission finds that 

inclusion of the phrase ‘‘between 

manufacturers and potential customers’’ 

would raise confusion as to who may 

enter into conditional sales contracts. 

The Commission recognizes that 

modern product development and 

distribution systems can be complex 

and involve multiple entities in various 

roles. As discussed in the NPRM, the 

Commission understands that, with the 

proliferation of internet-based direct-toconsumer sales and e-commerce 

platforms, various entities can access 

multiple distribution models to reach 

consumers. To ensure that the language 

of the Commission’s revised marketing 

regulation does not hinder innovation or 

provide unfair advantage or 

disadvantage to particular entities, the 

Commission finds that it is not 

necessary to specify the permissible 

parties to the conditional sales 

contracts. Thus, manufacturers, 

developers, or other entities responsible 

for new device creation, development, 

or production will be able to define 

their own role in the distribution and 

supply chain of their devices. The 

Commission finds this to be particularly 

important for smaller or new device 

developers who may not manufacture 

their devices but wish to engage in the 

sale and distribution process so they can 

appropriately plan for manufacturing 

and distribution. By expanding the pool 

of parties to the conditional sales 

contracts, the Commission is 

implementing rules that encourage and 

expand opportunities for innovation 

and allow developers or other parties 

that are not themselves a manufacturer 

to participate in the sale and marketing 

of a device. At the same time, as noted 

below, the Commission continues to 

prohibit delivery to consumers prior to 

completion of the equipment 

authorization process. 

In this regard, the Commission 

modifies § 2.803(c)(2)(ii), a separate 

provision that allows limited marketing, 

in the form of sales, to a narrow class 

of specialized entities. As noted in the 

NPRM, CTA had asked that the 

provision be deleted or replaced with 

language specifically addressing 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52093 

manufacturers’ ability to engage in 

activities related to the Commission’s 

importation proposal. The Commission 

in the NPRM sought comment on 

whether a change to the provision was 

necessary to achieve the proposal’s 

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 

§ 2.803(c)(2)(ii), 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 § 2.803(c)(2)(i) by 

expanding applicability to all parties, 

the Commission finds that 

§ 2.803(c)(2)(ii) is no longer necessary 

and the Commission removes it. The 

language that the Commission is 

adopting in § 2.803(c)(2)(i) 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 

Commission’s technical requirements, 

but it more accurately reflects both of 

the Commission’s equipment 

authorization processes and the 

required milestone for delivery. This 

better conveys the Commission’s 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 

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 

NPRM’s 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 Commission’s 

equipment authorization requirements. 

While not adopting any specific device 

exclusions at this time, the Commission 

finds that requiring devices to complete 

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 Commission’s 

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 Commission’s 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 FCC’s 

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 

52094 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

Conformity prior to completion of that 

process. It also requires that the party 

initiating the first conditional sales 

contract maintain legal ownership of the 

relevant devices. 

The NPRM proposed to require 

manufacturers that engage in pre-sale 

activities to maintain legal ownership of 

imported RF devices that had not 

received equipment authorization, even 

after physically transferring them to 

retailers. When it made the proposal, 

the Commission asked whether the 

requirement would further the 

Commission’s goal of keeping 

unauthorized devices from causing 

harm to consumers or other radio 

operations, whether additional 

restrictions related to the delivery and 

location of devices after importation 

would be necessary, and about the 

manufacturer’s responsibility in the 

event of unauthorized operation. The 

Commission also asked several 

questions related to the specific process 

of complying with the requirement and 

whether the benefits of the rule would 

outweigh any burdens that it would 

place on those involved in the process, 

such as manufacturers and retailers. 

Samsung states that requiring 

manufacturers to retain legal ownership 

of imported RF devices will incentivize 

manufacturers to ensure that retailers 

and other partners abide by the labeling 

rules and other safeguards. Samsung 

recommends that the Commission 

clarify that agreements exercising the 

new importation condition to deliver 

devices to retail locations prior to 

authorization do not violate the § 2.803 

marketing rules. Samsung argues that 

the current text of § 2.803(c)(2) may 

constrain the ability of manufacturers 

and retailers (as well as others in the 

distribution chain) to exercise the new 

importation condition to deliver devices 

to retail locations while extracting 

representations and warranties to abide 

by the Commission’s safeguards. As an 

alternative to adding a new subsection 

to § 2.803, Samsung recommends that 

the Commission clarifies that contracts 

exercising the new condition, including 

physical transfer to retail partner 

locations, do not constitute marketing 

pursuant to § 2.803. Similarly, CTA 

recommends that the Commission 

clarifies that the proposed new 

importation condition does not violate 

the Commission’s marketing rules, but 

rather allows physical transfer of RF 

devices to retail locations with the 

safeguard of a manufacturer retaining 

legal ownership of those devices. CTA 

observes that manufacturers and 

retailers must have agreements in place 

to ensure that those devices are properly 

labeled, delivered, and stored until they 

are authorized for consumer use. 

The intent of the Commission’s 

proposed rule on ownership of imported 

RF devices was to protect consumers by 

ensuring that devices that have not yet 

been authorized are not operated. The 

Commission finds that it can achieve 

that important goal for both marketed 

and imported devices that have 

completed certification testing and been 

submitted to a TCB for approval by 

providing a process that allows for 

physical transfer of marketed devices 

while legal ownership is maintained by 

the first party to initiate a conditional 

sales contract (i.e., a developer or 

manufacturer, or similar party) or, in the 

case of imported devices, by the device 

manufacturer, developer, importer or 

ultimate consignee, or their designated 

customs broker. 

By permitting the physical transfer of 

devices, the Commission will allow 

entities to take full advantage of modern 

marketing and importation practices 

while still protecting against 

unauthorized use of devices that have 

not completed the equipment 

authorization process. The Commission 

is adding a new subsection to § 2.803 of 

the Commission’s rules establishing the 

requirements applicable to ownership 

and physical transfer of such devices. 

D. Disclosures and Labeling 

The Commission believes that most 

consumers today are generally familiar 

with conditional sales and delayed 

delivery of new devices. However, it 

needs to ensure that consumers 

purchasing devices that have not yet 

received authorization are aware of the 

conditions for delivery before entering 

into a conditional sales agreement. The 

Commission is therefore adopting, as 

proposed, a requirement that the 

prospective buyer be advised at the time 

of marketing, through a prominent 

disclosure, that the equipment is subject 

to FCC rules and delivery to the end 

user is conditional upon successful 

completion of the applicable equipment 

authorization process. 

In the NPRM, the Commission asked 

several questions regarding the 

implementation and scope of this 

disclosure requirement. For example, 

the Commission asked whether 

additional disclosures should be 

required throughout the equipment 

authorization process and, in the event 

that authorization is not obtained, how 

consumers would be notified, and 

whether the Commission should require 

refund information to be provided in the 

required disclosure. The Commission 

also asked about the responsibility of 

online retailers to ensure that all device 

advertisements involving conditional 

sales include the required disclosures, 

and whether unique identifying 

information (e.g., model numbers, 

expected FCC ID) that may be known at 

the time of marketing, should be 

required in online advertisements. 

Finally, the Commission asked whether 

it should require manufacturers to 

include a label on device packaging 

noting that it must not be delivered to 

consumers prior to obtaining equipment 

authorization and, if so, what additional 

information to require on the label. 

While two commenters suggest that 

the Commission provide specific 

disclosure language, most commenters 

suggest a more general requirement. 

However, INCOMPAS suggests that the 

Commission specifically require a 

refund for consumers when device 

authorization is not obtained. 

Information Technology Industry 

Council also argues in favor of a refund 

requirement and disclosures on how 

consumers can obtain refunds. The 

Public Interest Organizations (New 

America’s Open Technology Institute, 

Public Knowledge, Consumer Reports, 

and Access Humboldt) went further, 

requesting the Commission require 

companies utilizing the marketing 

exception to establish escrow funds for 

such refunds. On the other hand, 

regarding a consumer refund process, 

many commenters state the Commission 

should not adopt specific requirements 

or, generally, that no additional 

requirements beyond the proposal are 

necessary. 

The Commission finds that it is 

necessary and appropriate for parties 

initiating conditional sales contracts to 

advise buyers at the time of marketing, 

through a prominent disclosure, that the 

equipment is subject to FCC rules and 

delivery is conditional upon successful 

completion of the appropriate 

equipment authorization process. To 

ensure that the Commission’s new rules 

for conditional sales to consumers do 

not lead to unanticipated problems, the 

Commission will also require this 

disclosure to make clear that these rules 

do not address the applicability of 

consumer protection, contractual, or 

other provisions under federal or state 

law. The contractual nature of these 

conditional sales, along with the 

relevant contractual remedies available 

to the buyers, should provide sufficient 

incentive for the sellers to ensure that 

buyers are adequately informed of the 

conditions of sale, including a refund 

process, if device authorization is not 

successfully completed. Nevertheless, 

the Commission will require the 

initiating party to include in their 

disclosure notification of any 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52095 

responsibility of the initiating party to 

the buyer in the event that the 

applicable equipment authorization 

process is not successfully completed, 

including information regarding any 

applicable refund policy. While most 

consumers are familiar with conditional 

sales, the Commission finds that 

requiring this information will 

minimize potential confusion for 

consumers who are unfamiliar with 

conditional sales. Although CTA 

suggests that such disclosure could 

confuse consumers who are already 

aware of the applicable refund policy, 

the Commission finds such confusion 

unlikely, and finds on balance that the 

public interest is better served by 

making this information available to all 

consumers as part of the disclosure the 

Commission is requiring here. The 

Commission does not find that it is 

necessary to require standardized 

language for the disclosures nor does 

the Commission believes that it needs to 

take any additional measures to ensure 

that buyers are informed of the 

conditional nature of the sales contracts. 

However, the Commission does find 

that it is important to ensure that 

devices are not delivered to consumers 

and that distributers, retailers, 

consumers, and other relevant entities 

are aware that the devices must not be 

operated before equipment 

authorization is complete. In addition to 

disclosures, the Commission is adopting 

the temporary labeling requirement for 

RF devices when parties engage in presale activities that the Commission 

proposed for imported devices and 

extending that requirement to devices 

under the marketing provisions adopted 

by this document for those same presale activities. In the NPRM, the 

Commission requested comment about 

requiring a temporary label on device 

packaging and what information that 

label should include. The Commission 

went on to propose that devices 

imported prior to certification under the 

new exception include a temporary 

removable label that includes a specific 

warning against premature operation, 

display, offers for sale, marketing, or 

sales and asked whether additional 

information should be incorporated into 

such a label. Garmin, INCOMPAS, and 

Hewlett Packard Enterprise specifically 

opposed such a requirement, generally 

stating that it would not be worth the 

investment in time and material. While 

R Street agreed with the requirement, 

other supportive comments generally 

suggested that existing labeling 

requirements would be sufficient, or 

pointed to Commission guidance for 

temporary physical labels under the elabeling procedures for RF devices. No 

comments supported a temporary 

labeling requirement beyond that 

proposed by the Commission. 

The Commission continues to believe 

that a temporary label indicating the 

status of RF devices will provide a 

necessary safeguard against the 

inadvertent transfer of such devices to 

consumers and the Commission is 

adopting the rule in both the 

importation and marketing provisions 

with some modifications to the required 

language for consistency with other 

provisions in the new rules. 

Specifically, when parties engage in presale activities, the Commission clarifies 

that the device or its packaging must 

prominently display a visible temporary 

label. This will ensure that the 

temporary label is not hidden inside the 

device packaging where it would not be 

visible. The Commission also clarifies 

that the device cannot be displayed to 

consumers, operated, or delivered to 

end users until successful completion of 

the applicable FCC equipment 

authorization process. The Commission 

is not adopting the Commission’s 

proposal that the label on imported 

devices include language prohibiting 

offers of sale and marketing, thus 

ensuring consistency in labeling for 

both imported and domestic devices. 

The devices must not be available to 

consumers until after the successful 

completion of the certification process 

and the Commission expects that at the 

time of sale they will be in compliance 

with all pertinent information, 

technical, labeling, and other 

requirements within the Commission’s 

rules. Because the labels are temporary, 

the Commission finds that it would be 

unduly burdensome to require the 

inclusion of any additional information 

such as authorization status or specific 

contact information or otherwise 

include any specific compliance 

guidance with the rules. As to 

compliance via the Commission’s 

existing requirements for electronic 

labeling (e-labeling) of RF devices, it 

appears likely that commenters are 

referring to § 2.935(f) of the 

Commission’s rules which requires an 

external removable label that addresses 

compliance with any applicable 

Commission requirements. However, in 

this case, as the temporary label 

requirement is specifically codified in 

the Commission’s new rule, strict 

compliance with § 2.935(f) is not 

necessary and would likely not be 

desirable. 

Once authorization has been 

completed, the RF devices must comply 

with all pertinent Commission labeling 

and disclosure requirements. The 

Commission adopts its proposal to 

allow, but not require, the anticipated 

FCC ID to be included if obscured by a 

temporary label until equipment 

authorization is successfully completed. 

Otherwise, the Commission is not 

adopting requirements that specifically 

detail actions required to ensure 

compliance in this regard. 

E. Retrieval and Tracking of 

Unauthorized Devices 

As proposed in the importation 

provision of the NPRM, the Commission 

is requiring processes to retrieve 

equipment to be in place prior to the 

commencement of pre-sale activities, 

and clarifying that those processes must 

be implemented, in the event that 

authorization is not successfully 

completed. In this regard, the 

Commission also asked several 

questions about the level of detail of the 

process that should be codified and the 

requirements for records retention and 

submission. With the exception of R 

Street, commenters do not offer any 

specific suggestions regarding retrieving 

equipment if authorization were to be 

denied, but generally indicate that 

existing Commission processes are 

adequate, and advocate a ‘‘light touch’’ 

regulatory approach. R Street 

recommends that the Commission 

require RF device manufacturers to 

submit formal plans to retrieve devices 

to limit the ability for bad actors to let 

devices simply remain in the public 

sphere, rather than bear the cost of 

retrieving the devices. R Street suggests 

that these risks could be further limited 

by features such as a remote shutdown 

requirement on the devices, but notes 

that the benefits of such an approach 

may be limited by the costs of 

implementing it. The Commission had 

asked about this remote shutdown 

approach, noting some similarity to 

scenarios in which unauthorized 

devices operate under a part 5 

experimental authorization. 

In light of the expanded physical 

transfer provisions the Commission is 

adopting in its marketing rule, the 

Commission finds it necessary that the 

marketing provisions also require a 

process for retrieval of devices, and 

completion of that process, in the event 

that authorization is not successfully 

completed when parties engage in presale activities. Although the 

Commission is adopting this retrieval 

requirement in both the Commission’s 

importation and marketing rules, the 

language of the two provisions varies 

slightly to accurately designate the party 

responsible for the retrieval activities. 

For marketed devices, the burden is on 

the first party to initiate a conditional 

52096 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

sales contract or to physically transfer 

devices, while for imported devices, the 

burden is on the device manufacturer, 

developer, importer or ultimate 

consignee, or their designated customs 

broker. In both instances, this will 

ensure that the party in legal ownership 

of the devices, regardless of the devices’ 

physical location, will be responsible 

for maintaining and implementing a 

process for retrieval if the applicable 

equipment authorization cannot be 

successfully completed. The language 

the Commission adopts in the 

importation provision, which was 

limited to the manufacturer in the 

Commission’s proposal, is consistent 

with party designations referenced in 

the Commission’s other existing 

importation conditions. 

F. Recordkeeping 

In the NPRM, the Commission 

proposed a recordkeeping requirement 

for devices imported prior to equipment 

authorization that would require 

manufacturers to maintain, for a period 

of 5 years, records identifying the 

recipient of the devices along with 

information about the devices and the 

shipping. The Commission asked 

several questions related to the need for 

recordkeeping and related reporting and 

responsibility issues. The Commission’s 

recordkeeping questions were informed 

by its concerns about situations where 

pre-ordered devices are not ultimately 

authorized and enforcement actions 

may be required. Commenters generally 

recommend either no new 

recordkeeping or minimal requirements. 

No commenter supports additional 

reporting requirements. Samsung states 

that adopting new record retention 

requirements is not necessary because 

manufacturers regularly retain records 

related to equipment authorization that 

must be presented to the Commission 

upon request. Amazon states that an 

overly prescriptive approach or 

burdensome reporting and 

recordkeeping requirements are not 

necessary to protect consumers. 

The Commission finds that the 

recordkeeping requirement proposed in 

the NPRM is the minimal required to 

ensure that, should it become necessary, 

the Commission will have access, as 

needed for enforcement or other 

purposes, to information regarding 

devices imported prior to authorization. 

The Commission therefore adopts the 

recordkeeping requirement with a 

change to the party responsible for 

recordkeeping. Specifically, 

recordkeeping will be the responsibility 

of the device manufacturer, developer, 

importer or ultimate consignee, or their 

designated customs broker. In addition 

to being consistent with other 

importation recordkeeping requirements 

in the Commission’s rules, this change 

also acknowledges that entities other 

than a device manufacturer may be 

responsible for the importation of these 

devices. 

Because the new marketing exception 

the Commission adopts here expressly 

prohibits the delivery to end users any 

of the subject devices prior to 

authorization, it follows that compliant 

entities would maintain legal or 

physical possession, as appropriate, of 

the pre-ordered devices as provided in 

the Commission’s rules. Thus, the 

Commission does not see a benefit to 

imposing reporting requirements, as 

they would not directly further the 

Commission’s underlying goal of 

keeping unauthorized devices from 

becoming available to the general 

public. Further, the Commission 

believes that it is good business practice 

to maintain sales documentation and 

thoroughly track customers, particularly 

when, as with the Commission’s 

marketing exception, sales are 

conducted through conditional sales 

contracts. The Commission expects that 

sellers, through the normal course of 

business, will maintain records of the 

conditional sales contract permitted by 

the marketing rule the Commission is 

adopting through this Report and Order. 

So, the Commission is not adopting any 

new reporting requirements, but the it is 

adopting a recordkeeping requirement 

consistent with that adopted for devices 

imported prior to equipment 

authorization. The party initiating a 

conditional sales contract or physically 

transferring devices under the 

Commission’s new marketing exception 

must maintain, for a period of five years, 

records identifying each entity to whom 

a device is conditionally sold or 

physically transferred, the device name 

and product identifier, the quantity 

conditionally sold or physically 

transferred, the date on which the 

device authorization was submitted, and 

the expected FCC ID number. The party 

initiating the conditional sales contract 

or physically transferring devices must 

provide these records upon the request 

of Commission personnel. 

G. Enforcement 

In the NPRM, the Commission asked 

several questions about the appropriate 

enforcement actions that should be 

taken in the event of non-compliance 

with any of the new importation 

requirements and the effect the 

marketing proposal would have on 

enforcement activities. It specifically 

asked questions about appropriate 

sanctions for instances where 

unauthorized devices are delivered to 

consumers prior to receipt of the 

equipment authorization, including, for 

example, whether the base forfeiture for 

such violations should be based on the 

number of units delivered and whether 

the Commission should deny future 

equipment authorization applications 

from grantees who deliver unauthorized 

devices to consumers. Additionally, the 

Commission asked about how to hold 

online vendors accountable and what 

penalties would apply to any consumer 

who operates an unauthorized device 

that was obtained through a violation of 

the Commission’s conditional sale 

procedure. 

Commenters did not specifically 

address enforcement related to the 

importation proposal. While some 

commenters expressed concerns about 

risks to consumers in the event that 

equipment authorization is not 

ultimately obtained, none cited this 

concern as a reason to not adopt the 

proposed rule. No commenters provided 

specific recommendations regarding the 

consideration of violations or the 

determination of appropriate penalties. 

Any comments that addressed 

enforcement generally stated that 

existing enforcement tools would 

provide sufficient means to address 

compliance issues without any 

modification. 

Commenters generally concurred that 

the FTC and state agencies and courts 

would be appropriate venues for 

consumer contractual complaints. 

Information Technology and Innovation 

Foundation states that there is always a 

risk of bad actors knowingly flouting 

regulations or small, unsophisticated 

parties unknowingly failing to comply, 

but that the risk of non-compliant radios 

becoming publicly available does not 

seem to increase with the Commission’s 

proposed rule changes. However, 

Information Technology and Innovation 

Foundation recommends that the 

Commission should always view 

enforcement as a primary concern. 

Information Technology Industry 

Council notes existing safeguards that 

are currently in place via not only the 

Commission, but also the FTC and 

states’ attorneys general, and argues that 

new Commission enforcement 

mechanisms are not necessary. 

Similarly, CTA argues that consumer 

redress mechanisms are in place, if 

necessary, and that if a manufacturer 

does not deliver a device where a 

customer remitted some consideration, 

the FTC and state consumer protection 

agencies are experts in redressing such 

harms. 

The Commission finds that other 

agencies, including the Federal Trade 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52097 

Commission and the various states’ 

attorneys general, would be the 

appropriate venues for consumer 

complaints about these issues and the 

Commission will not implement 

additional enforcement measures at this 

time. The Commission’s rules already 

include exceptions for marketing prior 

to equipment authorization. Although 

the exception that the Commission 

adopts today provides for a greater scale 

of pre-authorization device marketing, 

the Commission believes that its 

existing enforcement measures will be 

sufficient to mitigate and address 

potential harm. 

H. Open Proceeding 

In the NPRM, the Commission 

acknowledged an open equipment 

authorization proceeding, ET Docket 

15–170, which also asked questions 

about importation, and tentatively 

concluded that the Commission’s new 

marketing and importation proposals 

may be acted upon separately. See 

Amendment of Parts 0, 1, 2, 15 and 18 

of the Commission’s Rules regarding 

Authorization of Radiofrequency 

Equipment, ET Docket No. 15–170, 

Notice of Proposed Rulemaking, 30 FCC 

Rcd 7725 (2015) (2015 Equipment 

Authorization Notice); and Amendment 

of Parts 0, 1, 2, 15 and 18 of the 

Commission’s Rules regarding 

Authorization of Radiofrequency 

Equipment, ET Docket No. 15–170, First 

Report and Order, 32 FCC Rcd 8746 

(2017) (2017 Equipment Authorization 

Order). Two commenters specifically 

requested that the Commission also take 

action on two proposals from ET Docket 

15–170. 

In the context of the Commission’s 

importation exception, Garmin suggests 

that the Commission revisit its 

outstanding proposal for ‘‘provisional 

certification.’’ In the 2015 Equipment 

Authorization Notice, the Commission 

discussed the idea of a ‘‘provisional 

certification’’ as a potential method for 

addressing the confidentiality concerns 

of applicants for certification in which 

granted certifications would not be 

included in the Commission’s public 

database before the RF device is made 

available for sale. The Commission also 

suggested that a provisionally certified 

device could also be imported prior to 

acknowledgement in the Commission’s 

database. Garmin submitted several 

filings in support of the proposal in ET 

Docket 15–170. As a provisional grant of 

certification procedure would affect all 

stakeholders in the equipment 

authorization process, it goes beyond 

the narrow focus of this proceeding, the 

marketing and importation rules. Thus, 

the Commission does not believe that 

this Report and Order provides an 

appropriate venue for the proposal’s 

consideration. Additionally, as an 

alternative to the provisional grant 

proposal, Garmin also includes an 

entirely new proposal for a ‘‘deferred 

grant eligibility confirmation letter’’ 

which would be issued by a TCB prior 

to the grant of certification. Such a letter 

would indicate the device has met the 

equipment authorization requirements 

and the grant would not occur until a 

date specified by the applicant. This 

proposal would similarly impact many 

aspects of the equipment authorization 

process, and the responsibilities of 

TCBs, in particular, so the Commission 

likewise believes it is beyond the scope 

of this proceeding. 

Additionally, one commenter, CTIA 

suggested that the Commission also act 

on outstanding proposals related to the 

certification of modular transmitters. A 

modular transmitter is a completely selfcontained RF transmitter device that 

typically is incorporated into another 

product and is subject to, among others, 

the requirements of § 15.212 of the 

Commission’s rules. The 2015 

Equipment Authorization Notice 

included proposed changes to these 

requirements and compliance with such 

requirements in the context of the 

certification process. These proposals 

relate to the certification process and it 

is not necessary for us to take action at 

this time to allow us to adopt the instant 

marketing and importation rules. 

III. Final Regulatory Flexibility 

Analysis 

A. Need for, and Objectives of, the 

Report and Order 

In June 2020, the Consumer 

Technology Association (CTA) filed a 

petition for rulemaking seeking 

modification of the Commission’s rules 

pertaining to the marketing and 

importation of radiofrequency (RF) 

devices. CTA argued that those rules 

were out-of-date and may hinder 

development and deployment of stateof-the-art RF products and services. In 

December 2020, after considering the 

petition, and the general support 

expressed in the associated record, the 

Commission initiated this proceeding, 

proposing changes to the Commission’s 

marketing and equipment rules that 

were informed to a large extent by the 

CTA Petition. 

In this Report and Order the 

Commission adopts targeted 

enhancements to the Commission’s 

marketing and importation rules that 

will allow equipment manufacturers to 

better gauge consumer interest and 

prepare for new product launches. 

Given the rapid and widespread 

deployment of the radiofrequency (RF) 

devices integral to nearly all aspects of 

modern life, these steps will further the 

communications sector’s ability to drive 

innovation and promote economic 

growth. As product development cycles 

have accelerated, new marketplace 

models and assessment tools have 

emerged that rely on individual interest 

to fund products and allow sellers to 

optimize the number of products they 

produce or import to match anticipated 

sales. The rules the Commission adopts 

will allow manufacturers to better 

utilize these tools to speed the newest 

technologies and must-have devices to 

consumers. The Commission has crafted 

these rules in a manner that will not 

harm the underlying goals of the 

Commission’s equipment authorization 

program: Ensuring that the 

communications equipment Americans 

rely on every day, such as their 

cellphones and Wi-Fi devices, comply 

with the Commission’s technical rules; 

and providing assurance to all spectrum 

users that their devices will work as 

intended and operate free from harmful 

interference. 

B. Summary of Significant Issues Raised 

by Public Comments in Response to the 

IRFA 

There were no comments filed that 

specifically addressed the rules and 

polices proposed in the IRFA. 

C. Response to Comments by the Chief 

Counsel for Advocacy of the Small 

Business Administration 

Pursuant to the Small Business Jobs 

Act of 2010, which amended the RFA, 

the Commission is required to respond 

to any comments filed by the Chief 

Counsel for Advocacy of the Small 

Business Administration (SBA), and to 

provide a detailed statement of any 

change made to the proposed rules as a 

result of those comments. The Chief 

Counsel did not file any comments in 

response to the proposed rules in this 

proceeding. 

D. Description and Estimate of the 

Number of Small Entities to Which 

Rules Will Apply 

The RFA directs agencies to provide 

a description of, and where feasible, an 

estimate of the number of small entities 

that may be affected by the proposed 

rules, if adopted. The RFA generally 

defines the term ‘‘small entity’’ as 

having the same meaning as the terms 

‘‘small business,’’ ‘‘small organization,’’ 

and ‘‘small governmental jurisdiction.’’ 

In addition, the term ‘‘small business’’ 

has the same meaning as the term 

‘‘small business concern’’ under the 

52098 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

Small Business Act. A ‘‘small business 

concern’’ is one which: (1) Is 

independently owned and operated; (2) 

is not dominant in its field of operation; 

and (3) satisfies any additional criteria 

established by the Small Business 

Administration (SBA). 

Small Businesses, Small 

Organizations, Small Governmental 

Jurisdictions. The Commission’s actions, 

over time, may affect small entities that 

are not easily categorized at present. 

The Commission therefore describes 

here, at the outset, three broad groups of 

small entities that could be directly 

affected herein. First, while there are 

industry specific size standards for 

small businesses that are used in the 

regulatory flexibility analysis, according 

to data from the Small Business 

Administration’s (SBA) Office of 

Advocacy, in general a small business is 

an independent business having fewer 

than 500 employees. These types of 

small businesses represent 99.9% of all 

businesses in the United States, which 

translates to 30.7 million businesses. 

Next, the type of small entity 

described as a ‘‘small organization’’ is 

generally ‘‘any not-for-profit enterprise 

which is independently owned and 

operated and is not dominant in its 

field.’’ The Internal Revenue Service 

(IRS) uses a revenue benchmark of 

$50,000 or less to delineate its annual 

electronic filing requirements for small 

exempt organizations. Nationwide, for 

tax year 2018, there were approximately 

571,709 small exempt organizations in 

the U.S. reporting revenues of $50,000 

or less according to the registration and 

tax data for exempt organizations 

available from the IRS. 

Finally, the small entity described as 

a ‘‘small governmental jurisdiction’’ is 

defined generally as ‘‘governments of 

cities, counties, towns, townships, 

villages, school districts, or special 

districts, with a population of less than 

fifty thousand.’’ U.S. Census Bureau 

data from the 2017 Census of 

Governments indicate that there were 

90,075 local governmental jurisdictions 

consisting of general purpose 

governments and special purpose 

governments in the United States. Of 

this number there were 36,931 general 

purpose governments (county, 

municipal and town or township) with 

populations of less than 50,000 and 

12,040 special purpose governments— 

independent school districts with 

enrollment populations of less than 

50,000. Accordingly, based on the 2017 

U.S. Census of Governments data, the 

Commission estimates that at least 

48,971 entities fall into the category of 

‘‘small governmental jurisdictions.’’ 

Radio Frequency Equipment 

Manufacturers (RF Manufacturers). 

Neither the Commission nor the SBA 

has developed a small business size 

standard applicable to Radio Frequency 

Equipment Manufacturers (RF 

Manufacturers). There are several 

analogous SBA small entity categories 

applicable to RF Manufacturers—Fixed 

Microwave Services, Other 

Communications Equipment 

Manufacturing, and Radio and 

Television Broadcasting and Wireless 

Communications Equipment 

Manufacturing. A description of these 

small entity categories and the small 

business size standards under the SBA 

rules are detailed below. 

Fixed Microwave Services. Microwave 

services include common carrier, 

private-operational fixed, and broadcast 

auxiliary radio services. They also 

include the Upper Microwave Flexible 

Use Service, Millimeter Wave Service, 

Local Multipoint Distribution Service 

(LMDS), the Digital Electronic Message 

Service (DEMS), and the 24 GHz 

Service, where licensees can choose 

between common carrier and noncommon carrier status. There are 

approximately 66,680 common carrier 

fixed licensees, 69,360 private and 

public safety operational-fixed 

licensees, 20,150 broadcast auxiliary 

radio licensees, 411 LMDS licenses, 33 

24 GHz DEMS licenses, 777 39 GHz 

licenses, and five 24 GHz licenses, and 

467 Millimeter Wave licenses in the 

microwave services. The Commission 

has not yet defined a small business 

with respect to microwave services. The 

closest applicable SBA category is 

Wireless Telecommunications Carriers 

(except Satellite) and the appropriate 

size standard for this category under 

SBA rules is that such a business is 

small if it has 1,500 or fewer employees. 

For this industry, U.S. Census Bureau 

data for 2012 show that there were 967 

firms that operated for the entire year. 

Of this total, 955 firms had employment 

of 999 or fewer employees and 12 had 

employment of 1,000 employees or 

more. Thus under this SBA category and 

the associated size standard, the 

Commission estimates that a majority of 

fixed microwave service licensees can 

be considered small. 

The Commission does not have data 

specifying the number of these licensees 

that have more than 1,500 employees, 

and thus is unable at this time to 

estimate with greater precision the 

number of fixed microwave service 

licensees that would qualify as small 

business concerns under the SBA’s 

small business size standard. 

Consequently, the Commission 

estimates that there are up to 36,708 

common carrier fixed licensees and up 

to 59,291 private operational-fixed 

licensees and broadcast auxiliary radio 

licensees in the microwave services that 

may be small and may be affected by the 

rules and policies discussed herein. The 

Commission notes, however, that the 

microwave fixed licensee category 

includes some large entities. 

Other Communications Equipment 

Manufacturing. This industry comprises 

establishments primarily engaged in 

manufacturing communications 

equipment (except telephone apparatus, 

and radio and television broadcast, and 

wireless communications equipment). 

Examples of such manufacturing 

include fire detection and alarm systems 

manufacturing, Intercom systems and 

equipment manufacturing, and signals 

(e.g., highway, pedestrian, railway, 

traffic) manufacturing. The SBA has 

established a size standard for this 

industry as all such firms having 750 or 

fewer employees. U.S. Census Bureau 

data for 2012 shows that 383 

establishments operated in that year. Of 

that number, 379 operated with fewer 

than 500 employees and 4 had 500 to 

999 employees. Based on this data, the 

Commission concludes that the majority 

of Other Communications Equipment 

Manufacturers are small. 

Radio and Television Broadcasting 

and Wireless Communications 

Equipment Manufacturing. This 

industry comprises establishments 

primarily engaged in manufacturing 

radio and television broadcast and 

wireless communications equipment. 

Examples of products made by these 

establishments are: Transmitting and 

receiving antennas, cable television 

equipment, GPS equipment, pagers, 

cellular phones, mobile 

communications equipment, and radio 

and television studio and broadcasting 

equipment. The SBA has established a 

small business size standard for this 

industry of 1,250 employees or less. 

U.S. Census Bureau data for 2012 show 

that 841 establishments operated in this 

industry in that year. Of that number, 

828 establishments operated with fewer 

than 1,000 employees, 7 establishments 

operated with between 1,000 and 2,499 

employees and 6 establishments 

operated with 2,500 or more employees. 

Based on this data, the Commission 

concludes that a majority of 

manufacturers in this industry are 

small. 

E. Description of Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements for Small Entities 

In the Report and Order, the 

Commission adopts rules that affect 

reporting, recordkeeping, and other 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52099 

compliance requirements for small 

entities. Regarding marketing of RF 

devices, the Report and Order will 

require that the seller of a conditionallypurchased RF device advise the 

conditional purchaser that the device is 

subject to FCC rules, and that delivery 

of the device to the purchaser is 

contingent upon device compliance 

with applicable FCC equipment 

authorization and technical 

requirements. Regarding importation of 

RF devices into the United States prior 

to equipment authorization for pre-sale 

activities—including imaging, 

packaging, and delivery to retail 

locations—the Report and Order will 

require that each imported RF device 

display a temporary removable label 

stating that it cannot be displayed, 

operated, offered for sale, marketed to 

consumers, or sold prior to proper FCC 

equipment authorization has been 

granted, and will further require that 

importing manufacturers have processes 

in place to retrieve any equipment 

transferred to a conditional purchaser, 

in the event that such authorization is 

denied by the FCC. Moreover, importing 

manufacturers will be required to 

maintain, for a period of 60 months, 

records identifying the recipients of RF 

devices imported for pre-sale activities. 

Such records must identify several 

factors such as the device name and 

product identifier, the quantity shipped, 

the date on which the device 

authorization was sought, the expected 

FCC ID number, and the identity of the 

recipient, including address and 

telephone number. 

The Report and Order also particular 

recordkeeping requirements that will be 

imposed on RF manufacturers so that 

RF equipment that is conditionally sold 

can be accounted for if equipment 

authorization is ultimately not granted 

or enforcement action needs to be taken, 

and the period of time that 

manufacturers should be required to 

retain those records and provide them to 

the FCC upon request. Additionally, the 

Report and Order requests that a 

manufacturer that imports an RF device 

should be required to document (and 

provide such documentation to the FCC 

upon request) the basis for its belief that 

the FCC will authorize that device. 

F. Steps Taken To Minimize the 

Significant Economic Impact on Small 

Entities, and Significant Alternatives 

Considered 

The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

proposed approach, which may include 

the following four alternatives (among 

others): (1) The establishment of 

differing compliance or reporting 

requirements or timetables that take into 

account the resources available to small 

entities; (2) the clarification, 

consolidation, or simplification of 

compliance or reporting requirements 

under the rule for small entities; (3) the 

use of performance, rather than design, 

standards; and (4) an exemption from 

coverage of the rule, or any part thereof, 

for small entities. 

The Report and Order rules set forth 

are minimal, and the Commission 

believes would significantly assist RF 

equipment manufacturers, some of 

which may be small entities, to market 

and import RF equipment. Although the 

Commission believe that the 

Commission’s rules are not unduly 

burdensome, the Commission sought 

comment on a number of alternatives or 

supplements to those rules and 

procedures, such as whether the 

Commission should require marketing 

disclosures at all or just some points of 

the pre-authorization process, whether 

the Commission should require specific 

language or instead permit parties to 

choose how they word their disclosures, 

and whether all or only certain 

importation safeguards are needed. 

The Commission believes that the 

regulatory burdens that the Commission 

is implementing are necessary in order 

to ensure that the public receives the 

benefits of innovative products and 

technologies in a prompt and efficient 

manner, and those burdens apply 

equally to large and small entities, thus 

without differential impact. The 

Commission will continue to examine 

alternatives in the future with the 

objectives of eliminating unnecessary 

regulations and minimizing any 

significant impact on small entities. 

IV. Ordering Clauses 

It is ordered that, pursuant to sections 

4(i), 301, 302, 303(c), 303(f), and 303(r) 

of the Communications Act of 1934, as 

amended, 47 U.S.C. 154(i), 301, 302a, 

303(c), 303(f), and 303(r), this Report 

and Order is adopted as set forth above. 

It is further ordered that the 

amendments of the Commission’s rules 

as set forth in Appendix A are adopted, 

effective thirty days from the date of 

publication in the Federal Register, 

except for §§ 2.803(c)(2) and 

2.1204(a)(11), which contain new or 

modified information collection 

requirements that require approval by 

the Office of Management and Budget 

under the Paperwork Reduction Act and 

will become effective after the 

Commission publishes a notice in the 

Federal Register announcing such 

approval and the relevant effective date. 

It is further ordered that the 

Commission’s Consumer & 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

this Report and Order, including the 

Final Regulatory Flexibility Analysis, to 

the Chief Counsel for Advocacy of the 

Small Business Administration. 

It is further ordered that the 

Commission shall send a copy of this 

Report and Order in a report to be sent 

to Congress and the Government 

Accountability Office pursuant to the 

Congressional Review Act, see 5 U.S.C. 

801(a)(1)(A). 

List of Subjects in 47 CFR Parts 2 and 

95 

Communications equipment, Radio, 

Telecommunications. 

Federal Communications Commission. 

Marlene Dortch, 

Secretary. 

Final Rules 

For the reasons discussed in the 

preamble, the Federal Communications 

Commission amends 47 CFR parts 2 and 

95 as follows: 

PART 2—FREQUENCY ALLOCATIONS 

AND RADIO TREATY MATTERS; 

GENERAL RULES AND REGULATIONS 

■ 1. The authority citation for part 2 

continues to read as follows: 

Authority: 47 U.S.C. 154, 302a, 303, and 

336, unless otherwise noted. 

■ 2. Amend § 2.803 by revising 

paragraph (c)(2)(i) and removing and 

reserving paragraph (c)(2)(ii) to read as 

follows: 

§ 2.803 Marketing of radio frequency 

devices prior to equipment authorization. 

* * * * * 

(c) * * * 

(2) * * * 

(i) Conditional sales contracts 

(including agreements to produce new 

devices manufactured in accordance 

with designated specifications), and 

advertisements for such sales, are 

permitted under the following 

conditions: 

(A) The initiating party must provide 

to the prospective buyer at the time of 

marketing, through a prominent 

disclosure: 

(1) Notification that the equipment is 

subject to the FCC rules and delivery to 

the end user is conditional upon 

successful completion of the applicable 

equipment authorization process; 

(2) Notification that FCC rules do not 

address the applicability of consumer 

protection, contractual, or other 

provisions under federal or state law; 

and 

52100 Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 

(3) Notification of any responsibility 

of the initiating party to the buyer in the 

event that the applicable equipment 

authorization process is not successfully 

completed, including information 

regarding any applicable refund policy. 

(B) For devices subject to Supplier 

Declaration of Conformity procedures 

under subpart J of this chapter, physical 

transfer of equipment from the initiating 

party to other entities, including 

delivery to the end user, prior to 

successful completion of the equipment 

authorization process is prohibited. 

(C) For devices subject to Certification 

procedures under subpart J of this 

chapter, delivery to the end user prior 

to successful completion of the 

equipment authorization process is 

prohibited; transfer of physical 

possession of devices to other entities 

for the sole purpose of pre-sale activity 

is permitted only after compliance 

testing by an FCC-recognized accredited 

testing laboratory is completed and an 

application for Certification is 

submitted to an FCC-recognized 

Telecommunication Certification Body 

pursuant to § 2.911. Pre-sale activity 

includes packaging and transferring 

physical possession of devices to 

distribution centers and retailers. Presale activity does not include display or 

demonstration of devices. 

(1) Each device, or its packaging, 

physically transferred for the purpose of 

pre-sale activity must prominently 

display a visible temporary removable 

label stating: ‘‘This device cannot be 

delivered to end users, displayed, or 

operated until the device receives 

certification from the FCC. Under 

penalty of law, this label must not be 

removed prior to receiving an FCC 

certification grant.’’ 

(2) The first party to initiate a 

conditional sales contract under 

paragraph (c)(2)(i) of this section or to 

physically transfer devices must have 

processes in place to retrieve the 

equipment in the event that the 

equipment is not successfully certified 

and must complete such retrieval 

immediately after a determination is 

made that the equipment certification 

cannot be successfully completed. 

(D) Notwithstanding § 2.926, 

radiofrequency devices marketed 

pursuant to paragraph (c)(2)(i) of this 

section may include the expected FCC 

ID if obscured by the temporary label 

described in paragraph (c)(2)(i)(B)(1) of 

this section or, in the case of electronic 

labeling, if the expected FCC ID cannot 

be viewed prior to authorization. 

(E) All radiofrequency devices 

marketed under paragraph (c)(2)(i) of 

this section must remain under legal 

ownership of the first party to initiate a 

conditional sales contract. 

(F) The first party to initiate a 

conditional sales contract or any party 

that physically transfers devices under 

paragraph (c)(2)(i) of this section must 

maintain, for a period of sixty (60) 

months, records of each conditional sale 

contract. Such records must identify the 

device name and product identifier, the 

quantity conditionally sold, the date on 

which the device authorization was 

sought, the expected FCC ID number, 

and the identity of the conditional 

buyer, including contact information. 

The first party to initiate a conditional 

sales contract or any party that 

physically transfers devices under 

paragraph (c)(2)(i) of this section must 

provide these records upon the request 

of Commission personnel. 

* * * * * 

■ 3. Amend § 2.1204 by adding 

paragraph (a)(11) to read as follows: 

§ 2.1204 Import conditions. 

(a) * * * 

(11) The radio frequency device is 

subject to Certification under § 2.907 

and is being imported in quantities of 

12,000 or fewer units for pre-sale 

activity. For purposes of this paragraph, 

quantities are determined by the 

number of devices with the same FCC 

ID. 

(i) The Chief, Office of Engineering 

and Technology, may approve 

importation of a greater number of units 

in a manner otherwise consistent with 

paragraph (a)(11) of this section in 

response to a specific request. 

(ii) Pre-sale activity includes 

packaging and transferring physical 

possession of devices to distribution 

centers and retailers. Pre-sale activity 

does not include display or 

demonstration of devices. Except as 

provided in § 2.803(c)(2)(i), the devices 

must not be delivered to end users, 

displayed, operated, or sold until 

equipment Certification under § 2.907 

has been obtained. 

(iii) Radiofrequency devices can only 

be imported under the exception of 

paragraph (a)(11) of this section after 

compliance testing by an FCCrecognized accredited testing laboratory 

is completed and an application for 

certification is submitted to an FCCrecognized Telecommunication 

Certification Body pursuant to § 2.911 of 

this part; 

(iv) Each device, or its packaging, 

imported under this exception must 

prominently display a visible temporary 

removable label stating: ‘‘This device 

cannot be delivered to end users, 

displayed, or operated until the device 

receives certification from the FCC. 

Under penalty of law, this label must 

not be removed prior to receiving an 

FCC certification grant.’’ 

(v) Notwithstanding § 2.926, 

radiofrequency devices imported 

pursuant to paragraph (a)(11) of this 

section may include the expected FCC 

ID if obscured by the temporary label 

described in paragraph (a)(11)(iv) this 

section or, in the case of electronic 

labeling, if it cannot be viewed prior to 

authorization. 

(vi) The radiofrequency devices must 

remain under legal ownership of the 

device manufacturer, developer, 

importer or ultimate consignee, or their 

designated customs broker, and only 

transferring physical possession of the 

devices for pre-sale activity as defined 

in paragraph (a)(11) of this section is 

permitted prior to Grant of Certification 

under § 2.907. The device manufacturer, 

developer, importer or ultimate 

consignee, or their designated customs 

broker must have processes in place to 

retrieve the equipment in the event that 

the equipment is not successfully 

certified and must complete such 

retrieval immediately after a 

determination is made that certification 

cannot be successfully completed. 

(vii) The device manufacturer, 

developer, importer or ultimate 

consignee, or their designated customs 

broker must maintain, for a period of 

sixty (60) months, records identifying 

the recipient of devices imported for 

pre-sale activities. Such records must 

identify the device name and product 

identifier, the quantity shipped, the date 

on which the device authorization was 

sought, the expected FCC ID number, 

and the identity of the recipient, 

including contact information. The 

device manufacturer, developer, 

importer or ultimate consignee, or their 

designated customs broker must provide 

records maintained under this provision 

upon the request of Commission 

personnel. 

* * * * * 

PART 95—PERSONAL RADIO 

SERVICES 

■ 4. The authority citation for part 95 

continues to read as follows: 

Authority: 47 U.S.C. 154, 303, 307. 

■ 5. Revise § 95.391 to read as follows: 

§ 95.391 Manufacturing, importation, and 

sales of non-certified equipment prohibited. 

No person shall manufacture, import, 

sell, or offer for sale non-certified 

equipment for the Personal Radio 

Services except as provided for in 

§§ 2.803(c)(2)(i) and 2.1204(a)(11) of this 

Federal Register / Vol. 86, No. 179 / Monday, September 20, 2021 / Rules and Regulations 52101 

chapter. See § 302(b) of the 

Communications Act (47 U.S.C. 

302a(b)). See also part 2, subpart I 

(§ 2.801 et seq.) of this chapter for rules 

governing marketing of radiofrequency 

devices; part 2, subpart K (§ 2.1201 et 

seq.) of this chapter for rules governing 

import conditions. 

[FR Doc. 2021–19385 Filed 9–17–21; 8:45 am] 

BILLING CODE 6712–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 5 and 97 

[IB Docket No. 18–313, FCC 20–54; FR ID 

48757] 

Mitigation of Orbital Debris in the New 

Space Age 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule; announcement of 

effective date. 

SUMMARY: In this document, the 

Commission announces that the Office 

of Management and Budget (OMB) has 

approved, for a period of three years, the 

information collections associated with 

certain rules adopted in the Report and 

Order, Mitigation of Orbital Debris in 

the New Space Age, which stated that 

the Commission would publish a 

document in the Federal Register 

announcing the effective date of those 

rules. 

DATES: The amendments to 47 CFR 

5.64(b) and 97.207(g)(1), published at 85 

FR 52422 on August 25, 2020, are 

effective October 20, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Merissa Velez, International Bureau, 

Satellite Division, at (202) 418–0751. 

For information regarding the PRA 

information collection requirements 

contained in the PRA, contact Cathy 

Williams, Office of Managing Director, 

at (202) 418–2918 or Cathy.Williams@

fcc.gov. 

SUPPLEMENTARY INFORMATION: This 

document announces that OMB 

approved the information collection 

requirements in 47 CFR 5.64(b) and 

97.207(g)(1), on July 21, 2021. These 

rules were modified in the Report and 

Order in IB Docket No. 18–313, FCC 20– 

54, Mitigation of Orbital Debris in the 

New Space Age, published at 85 FR 

52422 on August 25, 2020. The 

Commission publishes this document as 

an announcement of the compliance 

date of the rules. The Report and Order 

also modified rules in part 25 and there 

is a separate PRA information collection 

review for the part 25 rules. Rule 

amendments adopted in the Report and 

Order which did not require OMB 

approval became effective on September 

24, 2020. 

If you have any comments on the 

burden estimates listed below, or how 

the Commission can improve the 

collections and reduce any burdens 

caused thereby, please contact Cathy 

Williams at Cathy.Williams@fcc.gov or 

Office of Managing Director, Federal 

Communications Commission, 45 L 

Street NE, Washington, DC 20554, 

regarding OMB Control Number 3060– 

1013. Please include the applicable 

OMB Control Number(s) in your 

correspondence. The Commission will 

also accept your comments via email at 

PRA@fcc.gov. 

To request materials in accessible 

formats for people with disabilities 

(Braille, large print, electronic files, 

audio format), send an email to fcc504@

fcc.gov or call the Consumer and 

Governmental Affairs Bureau at (202) 

418–0530 (voice), (202) 418–0432 

(TTY). 

Synopsis 

As required by the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3507), 

the FCC is notifying the public that it 

received final OMB approval on July 21, 

2021, for the information collection 

requirements contained in 47 CFR 

5.64(b) and 97.207(g)(1). Under 5 CFR 

part 1320, an agency may not conduct 

or sponsor a collection of information 

unless it displays a current, valid OMB 

Control Number. 

No person shall be subject to any 

penalty for failing to comply with a 

collection of information subject to the 

Paperwork Reduction Act that does not 

display a current, valid OMB Control 

Number. The OMB Control Number for 

the information collection requirements 

in these rules is 3060–1013. 

The foregoing notice is required by 

the Paperwork Reduction Act of 1995, 

Public Law 104–13, October 1, 1995, 

and 44 U.S.C. 3507. 

The total annual reporting burdens 

and costs for the respondents are as 

follows: 

OMB Control Number: 3060–1013. 

OMB Approval Date: July 21, 2021. 

OMB Expiration Date: July 31, 2024. 

Title: Mitigation of Orbital Debris. 

Form Number: N/A. 

Respondents: Business or other forprofit, not-for-profit institutions. 

Number of Respondents: 46 

respondents; 46 responses. 

Estimated Time per Response: 8 

hours. 

Frequency of Response: On occasion 

reporting requirement. 

Obligation to Respond: Required to 

obtain or retain benefits. The statutory 

authority for this information collection 

is contained in 47 U.S.C. 151, 154(i), 

301, 303, 307, 308, 309, and 310. 

Total Annual Burden: 368 hours. 

Annual Cost Burden: $88,550. 

Privacy Act Impact Assessment: No 

impact(s). 

Nature and Extent of Confidentiality: 

In general, there is no need for 

confidentiality with this collection of 

information. 

Needs and Uses: On April 24, 2020, 

the Commission released a Report and 

Order in IB Docket No. 18–313, FCC 20– 

54, Mitigation of Orbital Debris in the 

New Space Age, (Orbital Debris Report 

and Order). In this Orbital Debris Report 

and Order, the Commission updated its 

rules related to orbital debris mitigation, 

including application requirements. The 

new rules are designed to ensure that 

the Commission’s actions concerning 

radio communications, including 

licensing U.S. spacecraft and granting 

access to the U.S. market for non-U.S. 

spacecraft, mitigate the growth of orbital 

debris, while at the same time not 

creating undue regulatory obstacles to 

new satellite ventures. The action will 

help to ensure that Commission 

decisions are consistent with the public 

interest in space remaining viable for 

future satellites and systems and the 

many services that those systems 

provide to the public. The rule revisions 

also provide additional detail to 

applicants on what information is 

expected under the Commission’s rules, 

which can help to increase certainty in 

the application filing process. While 

this information collection represents an 

overall increase in the burden hours, the 

information collection serves the public 

interest by ensuring that the 

Commission and public have necessary 

information about satellite applicants’ 

plans for mitigation of orbital debris. 

Specifically, FCC 20–54 contains the 

new or modified information collection 

requirements listed below, applicable to 

applicants seeking experimental 

licenses for satellite operations under 

part 5 of the Commission’s rules, as well 

as to license grantees under part 97 

submitting notifications to the 

Commission prior to launch of a 

satellite amateur station: 

(1) Existing disclosure requirements 

have been revised to include specific 

metrics in several areas, including: 

Probability that the space stations will 

become a source of debris by collision 

with small debris and meteoroids that 

would cause loss of control and prevent 

disposal; probability of collision 

between any non-geostationary orbit 

(NGSO) space station and other large 

objects; and casualty risk associated