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Regulation - What is it Good For?

Updating FCC Device Rules

The general public probably doesn’t realize that all telecom devices must be approved by the FCC before the devices can be announced, marketed, or sold to the public. These requirements were put in place many years ago at the FCC to make certain that devices were safe, that radio devices don’t exceed legal power limits, and that radio devices use only the radio frequencies that are authorized.

Once a manufacturer has devices that are of a finished quality ready to sell to customers, the devices are sent to the FCC testing labs for approval. It’s rare for devices to fail the FCC approval process, but it does happen – and one has to suppose a manufacturer of a failed devices was hoping for a miracle by sending devices for testing.

This testing is still a vitally needed step, particularly in the wireless world. Devices that go inside central offices, huts, and cellular sites must also pass inspection by Underwriters Laboratories to makes sure the devices are safe. But wireless devices have two big concerns that must be addressed. The first is that devices stay within the spectrum bands they are supposed to use. Now that devices have software-defined antennas it would not be hard for cheap devices to stray out of the authorized band, which would cause havoc in the real world as devices interfered with licensed uses of spectrum – including uses by the military, satellites, and other key users of spectrum. Without testing it’s not hard to imagine cheap foreign cellphones that would blast out signals out of the authorized band.

The other big issue with wireless devices is the power level. We care about the power level for a bunch of reasons. First is user safety, and one of the reasons that cellphones have been declared safe over time is that they transmit at relatively low power levels. Power also defines how far a signal can propagate. If wireless devices were allowed to transmit at high power levels the signal might carry to the horizon and interfere with other uses of the frequency. Limiting the power of devices is one of the key ways that allows the FCC to define license areas for selling or awarding spectrum. The ability to limit power is probably the main reason that the FCC has been allowing rural WISPs to use some of the frequency in rural areas that sits idle. If WISPs used too much power they could be interfering with urban use of the spectrum.

The FCC rules are rigid in the process that a device manufacturer must follow. One key aspect of the FCC rules is that manufacturers are prohibited from doing pre-sales or conditional sales of wireless devices – except at the wholesale level. Apple can pre-sale a new iPhone to Verizon, but neither Apple nor Verizon can take preorders from the public. That means that the marketing effort for a new device can’t start until the device passes the FCC tests, and the devices can’t be sent for FCC testing until the devices are retail-ready.

Manufacturers are also prohibited from sending display versions of their devices to retail outlets. People want to see and touch a new cellphone before they order it, but the devices can’t be displayed in a Verizon store until they are approved for retail sales.

Manufacturers have been asking for the FCC to relax these rules so that they can market in the way that we market most things today. The testing delays may have made sense decades ago, but today it adds significant time in bringing new cellphones and other devices to market.

Cellphones are huge business today and it’s a major marketing event when Samsung or Apple announces the next generation cellphones. I have a hard time thinking why Verizon and other wireless carriers couldn’t take pre-orders for the latest phone months before the phones are ready. We now do that with a lot of big-ticket items like the Tesla Cybertruck – people are willing to get on waiting lists long before they can ever buy a new truck. We also now live in the world of Kickstarter where cool new ideas of all kinds are pre-marketed to see if there is enough marketing demand to go to manufacturing.

The big manufacturers like Samsung and Apple are never going to send a phone for FCC testing that doesn’t pass the tests – and they aren’t going to deliver phones to customers until they pass the FCC tests. It’s hard to think of any reason why the cellular carriers can’t take preorders for the latest phone. It’s hard to see what harm would come through taking orders early when customers are fully aware that they have to wait until the new phone is released.

It no longer makes sense to treat FCC-approved devices differently than other electronics. Manufacturers have asked the FCC to allow for waivers from the rules. It’s probably not a good idea to let cheap foreign cellphones be marketed until they have passed FCC muster. But it’s hard to think of any reason why the FCC should delay commerce by not allowing presales of iPhones. It’s time for the FCC rules to catch up to the realities of the marketplace.

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