FCC

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Federal Communications Commission (FCC)

The following is just one area where the FCC strikes fear into the hearts of business owners, over something that is actually nothing.  If you have a story of FCC or other government agency overreach, please email us so we can include it on this site.

Problem – Current policy requires manufacturers of digital products (that is, most electronic gadgets) to place a disclaimer statement on their product or external packaging, and another statement in the owners manual or in the package box. These statements were written by the FCC long ago and must be copied verbatim. The statements are not up-to-date (eg. “Consult the dealer or an experienced radio/TV technician for help.”), not helpful, and generally, nobody reads them. (see attached page, “FCC Required Notices for Digital Equipment”)

The regulation requiring these statements was intended to inform consumers that the manufacturer had done the product testing necessary to ensure that the device would not cause radio frequency interference with other devices in the same vicinity. However, actual compliance with the law is not routinely checked by the FCC. (FCC definition of Verification)

Despite the dated and mostly ignored nature of these required statements, the FCC has been granted power to enforce their use by companies who manufacture and sell digital products. The enforcement can entail months of legal battles, followed by the eventual capitulation of the company by paying thousands, or sometimes millions of dollars to the FCC. These punitive actions are almost always as a result of a company forgetting to put the required statements on their products and/or in the packaging and have nothing to do with the offending product actually causing any interference. (See FCC ruling against Peavey Electronics Corp.  Note the “Voluntary Contribution” in item 1 of the Consent Decree. Nothing about it is voluntary.)

As an example of how the FCC has become an illegitimate profit center for the US Government, take a look at just some of the companies in the music products industry who have been unjustly fined for simply not having the required statement printed on their products and/or in manuals.  Here is a partial list of those music gear companies:

Music Companies Sued by the FCC for Lack of Labeling (a sampling):

AMS (American Music & Sound) - Penalty: $72,000

Behringer - Penalty: $1,000,000

Gallien-Krueger - Penalty: $18,500

Hanser Music Group - Penalty: $14,500

LOUD Technologies - Penalty: $85,000

Marshall - Penalty: $7,200

New Sensor/EHX - Penalty: $450,000

Peavey - Penalty: $225,000

PreSonus - Penalty: $125,000

Rane - Penalty: $61,500

Samson - Penalty: $26,500

If you would like to read the FCC judgments against these companies for yourself, they are available here.  Bear in mind that these are companies in a small niche industry, and that most of these companies are quite small.  You can imagine how widespread the government abuses of power must be if they’ve reached this far into the music products industry.  And this is just one of many government agencies who regularly put American businesses out of business. Think of how many people companies like these could hire, if the government would stop confiscating their cash over petty regulations.

The House Committee on Oversight & Government Reform released a report in November 2016, which “surveyed 34 agencies and found they collected over $83 billion in fines and penalties between 2010 and 2015, which were used to fund operations and unappropriated programs.”  This “did not include the fines and penalties collected by the IRS”, but was probably comprised of the sort of business-crippling penalties that the FCC imposes.  Amazingly, “the government’s accounting system to monitor and track the funds collected appears inadequate.”  So, we don’t even know what they’re doing with all the confiscated funds from victim companies, other than growing the bureaucracy.

Tell your elected representatives that if they really want to create jobs, they need to prevent government agencies like the FCC from taking away jobs.

Spirit of the Regulation – The original reason for the required statements was to simply inform consumers regarding potential radio interference and what to do about it.  Implied in the regulation was actual protection from radio frequency interference, designed into products by the manufacturer and tested by the FCC.  (The testing, however, is almost never actually done.)

Solution – First, remove the requirement to have the disclaimer statements and take away the FCC's ability to fine companies for not having those statements.  Second, return the funds confiscated from companies who have been sued by the FCC.

For a far more effective solution that is in line with the original spirit of the regulation, require all digital products to be certified by a Nationally Recognized Testing Laboratory (NRTL) . The test procedures and certifications already exist and would not even need to be modified for implementation. UL, MET, Intertek and all other NRTL’s already do this type of testing every day. They also would include product safety testing, which many other countries require in addition to electro-magnetic interference (EMI) testing.

Surprisingly, the United States does not require product safety testing for electrical or electronic products. Although all serious companies get their products tested, in order to prove safety and provide a stronger defense if sued by users, it is strictly voluntary. And smaller companies often do not bother paying for certification, giving them a cost advantage at the risk of public safety.

The solution is simple: 1) Utilize the NRTL system and make product certification mandatory. 2) Enforce it by penalizing companies who do not certify their electrical or electronic products, and especially those who put false certification marks on their products. 3) Drop the requirement to use the previously mentioned disclaimer statements. The certification mark would provide the evidence that the products will not cause EMI. 4) Permanently eliminate the Form 740 requirement for importing digital electronics. The certification mark should suffice as evidence the product is fit for import, with US companies being willing and able to report counterfeit marks to the FCC for enforcement action.

Products that should be certified for both safety and EMI:

  • Anything that plugs into a wall outlet, using mains voltage, even if the power cable can be detached from the product (like an IEC cable).
  • Any product that uses an external power supply with an output voltage of greater than 30Vac or 42Vdc.

Products that should be certified for EMI only:

  • Any product that uses any form of digital technology, and is powered by battery or an external power supply having an output voltage that is less than or equal to 30Vac or 42Vdc.

For products which require only EMI testing, certification from an NRTL should cost only about $1000 per product. MET Labs, for example, quoted $2100 for the first product tested for EMI, and only $1050 for each additional product tested. Even very small companies could afford to have EMI certification for their products, based on those quotes.

Requiring certification for electrical and electronic devices in America would provide a secondary benefit as well.  Currently, there are many Chinese companies and individuals selling anonymously on Amazon via their Fulfillment by Amazon program, or on eBay with fly-by-night eBay stores.  Some of these stores do have someone in America (presumably not a US citizen) to help with their US sales.  Others sell and ship directly from China.  In any case, the products often have counterfeit certification marks (typically UL), or no marks at all.  There is no guarantee that these products are safe for consumer use or that they will not cause radio frequency interference.

Instituting a mandatory certification for basic safety and EMI compliance, which is already done by all serious companies, would help to diminish Chinese dumping of questionable electrical and electronic products on US soil.  This would increase sales of products by US-based companies and thus, create more jobs for Americans.