Just weeks after President Biden and Chinese leader Xi Jinping met face-to-face to restore dialogue between the two countries, the Federal Communications Commission adopted new rules that could limit national security threats posed by Chinese-made communications and electronic devices. The FCC said last week it adopted the new rules “to further secure our communications networks and supply chains from equipment that poses an unacceptable risk to national security.”

The rules will prohibit market access of certain equipment in the United States by banning the authorization of items the FCC believes pose national security concerns. The agency said it will do this by expanding the devices, communications equipment, and entities placed on its “Covered List” and require those seeking equipment authorization to state that they are not putting those items into the market.

Continue Reading U.S.-China Relationship: Assessing the Risk of Marketing Electronics Made Outside the United States

Regulatory certainty is a key component in investing in the wireless space. Whether you’re evaluating a wireless network or an infrastructure play, a product that relies on wireless devices, or an emergent wireless technology, a potential acquisition or investment requires a comprehensive understanding of the venture. That includes the impact of the regulatory environment on the likelihood of success of the business plan and potential liabilities and risks.

Traditional due diligence may no longer be enough, given the quickly changing regulatory environment. When doing analysis and diligence, how can you ensure that it’s comprehensive enough for today’s regulatory environment?

Continue Reading Finding Alpha in the Wireless Space: Regulatory Changes That Could Impact Investment

The Federal Communications Commission has concluded its official comment cycle for the Notice of Inquiry “Promoting Efficient Use of Spectrum through Improved Receiver Interference Immunity Performance.” As expected, most industry comments support a hands-off, industry-led approach to governing receiver performance, while academics and policy doyens argue for more comprehensive and stringent policies, including the adoption of actual rules, such as to establish harms claims thresholds for receivers.

We expect that under current leadership especially, the commission will pursue a middle-of-the-road solution that would not involve the adoption of new rules but would likely include the issuance of a policy statement on receiver performance. While a policy statement may not be on the top of the FCC’s agenda, this is certainly something that the staff can be working on during the fall, and while the comment period has closed, parties still have the opportunity to meet with the commission to influence any potential action. We expect that many will do so.

What could a Receiver Policy Statement look like? We believe that it could contain the following elements.

Continue Reading The Aftermath of the FCC Receiver Proceeding: Our Expectations

On March 10, Atrium Hospitality LP entered into a consent decree with the Federal Communications Commission. The agreement included a burdensome compliance plan and a $35,000 penalty for the hotel and asset management company. Atrium is just the most recent organization whose primary area of work extends beyond telecommunications to be investigated and ultimately penalized by the FCC.

In many industries, cell phones still have not replaced hand-held radios, which are often used for internal communications by security services, cleaning staff, and maintenance teams. These radios are used at manufacturing and industrial facilities, hotels, golf courses, athletic stadiums, and many other facilities that rely on private radios for staff communication.

Continue Reading Use of Private Radios by Industry Increases Risk of FCC Non-Compliance

As the world moves toward the rollout of fifth-generation, or 5G, wireless technology, the numbers of devices operating in many locations have grown exponentially. The Federal Communications Commission manages the commercial use of the radiofrequency spectrum – those invisible airways on which consumer and commercial wireless devices and networks operate. More wireless devices demand more use of the radio spectrum, leading the FCC to consider how to manage the spectrum more efficiently.

To that end, for the first time in two decades the agency may consider whether and how it may regulate receivers, which is the part of a wireless system that takes in transmissions of communications (e.g., voice, data). Poorly performing receivers make for inefficient spectrum use, limiting the FCC’s ability to cram more users into existing spectrum bands (a finite resource).

Late last year, the design of receivers made national news as the airline industry publicized concerns with possible interference to aircraft altimeters. An FCC decision to auction spectrum on an adjacent band to cellular carriers created concern that some altimeters could suffer performance degradation because these devices “listened” in to the adjacent band. The issue prompted the involvement of various parts of the Biden administration to step in and work out a short-term solution (for now) to modify the rollout of 5G services near airports.

Continue Reading Managing Wireless Technologies from Both Ends: FCC Considers Receiver Regulation

The proliferation of wireless and other electronic devices brings not only great opportunities but also compliance risk. This is demonstrated by a recent Federal Communications Commission (FCC) consent decree with Rexing, Inc., a retailer of aftermarket vehicle dash cameras.

Most devices that radiate radiofrequency, or RF, energy, either intentionally or unintentionally, must be tested for compliance prior to marketing in the United States. Some also must receive grants of equipment authorization from the FCC. Many are subject to labeling requirements. These requirements apply not just to manufacturers, but also to parties that import and market electronic and wireless devices in the U.S.

Examples of products that are subject to these FCC requirements, and which can unintentionally create regulatory problems for manufacturers, distributors, and retailers, include lightbulbs, ultrasonic humidifiers, and anything with a chip in it, such as computers, video games, and similar consumer products.

Continue Reading FCC Fine Is a Warning to Retailers of Electronic Devices