E-Labeling IoT Devices: Cutting Corners Costs You, Triggers Market Exclusion

In furthering its efforts to modernize radiofrequency (RF) equipment regulations, the Federal Communications Commission (FCC) recently codified rules that permit electronic labeling (e-labeling) of RF devices, including Internet of Things (IoT) devices, as long as they have the capacity to digitally display the required regulatory information.[1]

While e-labeling can save IoT and other RF equipment suppliers money by, among other things, eliminating the cost of purchasing and affixing permanent labels to all their devices, the FCC will impose substantial fines and strict sanctions on suppliers that incorrectly implement e-labeling or otherwise violate its rules.

The FCC’s Labeling Rules

The FCC requires that parties responsible for FCC compliance (typically the manufacturer or importer), with limited exceptions, test and label RF devices before marketing or operating them in the U.S.[2] Transmitting RF devices that require FCC certification (“intentional radiators”) and non-transmitting RF devices that require self-authorization by the FCC’s new Supplier’s Declaration of Conformity procedures (“unintentional radiators”), must display labels containing company identification information, as well as regulatory compliance statements.[3]

Historically, the FCC has required that RF devices have “permanently affixed” labels prominently displayed on them.[4] If the devices were too small to accommodate a proper label, the FCC permitted the information to be listed in the user’s manual or on the box in which the device is contained.[5] The FCC also permitted e-labeling under certain limited circumstances.[6]

New E-Labeling Rules

The new rules codify the procedures that RF suppliers must follow if they wish to utilize e-labeling for their products. E-labeling is optional; suppliers may still use physical labels if they wish. The key provisions of the new rules are:

Information as to how to retrieve the compliance information & company identification via the e-labeling must be provided to the user, either in the instruction manual, packaging material, or the company’s website. If the website is used, the packaging material must provide instructions as to how to access the website.[7]

No codes or special permission to access the e-labeling information may be used, and accessing that information may not require more than three steps from the device-setting menu.[8]

The e-labeling information must be programmed by the responsible party and secured so that third parties cannot modify it.[9]

The company's "unique identifier" and information about the website that contains the relevant information must be printed on the device or its packaging.[10]

Sanctions for Improper Labeling Can Include Losing Marketing Authority

The FCC strictly enforces its RF equipment labeling rules. Historically, the FCC would levy fines on non-compliant suppliers and require them to implement compliance programs. Lately, the FCC has, in addition to imposing fines and sanctions, implemented a policy wherein RF equipment suppliers that violate the rules may lose their authorizations to market their products in the U.S.

Accordingly, it is more critical than ever for RF equipment suppliers to fully understand and comply with all of the FCC’s equipment authorization, marketing, and importation rules, as well as its labeling requirements.

FCC Surveillance of RF Equipment

The FCC’s Enforcement Bureau routinely scours the Internet and utilizes other methods to search for non-compliant RF equipment. When the FCC finds equipment that does not comply with its rules, it opens an investigation that subjects the responsible party to public exposure of rule violations and, as described above, often results in the imposition of fines and severe sanctions.

Moreover, the FCC’s rules require Telecommunications Certification Bodies (“TCBs”) to conduct post-market surveillance on at least five percent of the RF equipment they have certified.[11] This surveillance is intended to ensure that marketed RF equipment conforms to the technical parameters of equipment that was tested and certified.

TCBs conduct surveillance by obtaining samples of suspicious RF devices on the market, measuring the characteristics, and comparing them to the characteristics of the prototypes that were authorized.

Responsible parties whose RF devices are under surveillance must, upon request, provide the investigating TCB with a sample RF device or vouchers to purchase any sample device the TCB wishes in order to conduct its surveillance.

Adopt Best Practices to Mitigate Chances of Rule Violations

With the FCC now threatening “lifetime bans” on delinquent RF equipment suppliers, compliance is now more important than ever before. RF equipment suppliers, including IoT providers, are well advised to work with experienced professionals who understand the FCC rules in order to evaluate the risks of FCC rule violations and what they could mean to the company.

While many IoT manufacturers are understandably anxious to get their products to market, it is becoming increasingly unwise to cut corners on regulatory compliance. Savvy RF device suppliers not only understand the rules, they implement internal best practice procedures in order to mitigate the risk of FCC rule violations.

[1] See 47 C.F.R. § 2.935(a).

[2] See 47 C.F.R. § 15.19.

[3] See 47 C.F.R. §§ 2.1074, 2.1077, 15.19.

[4] See 47 C.F.R. § 15.19(a)(3), (b)(4).

[5] See 47 C.F.R. § 15.19(a)(5).

[6] See Amendment of Parts 0, 1, 2, and 15 of the Commission’s Rules Regarding Authorization of Radiofrequency Equipment, Notice of Proposed Rulemaking, 30 FCC Rcd. 7725 (2015) at ¶ 101.

[7] See 47 C.F.R. § 2.935(b). A copy of these instructions must also be provided in an application for equipment certification

[8] See 47 C.F.R. § 2.935(c). For example, step one would be a user accessing the device setting menu; step two would be accessing a sub-menu of legal information; and step three would be accessing a further sub-menu of FCC compliance information. See In the Matter of Parts 0, 1, 2, 15, and 18 of the Commission’s Rules Regarding Authorization of Radiofrequency Equipment, FCC 17-93 (Rel. July 14, 2017) at ¶ 31.

[9] See 47 C.F.R. § 2.935(e).

[10] See 47 C.F.R. § 2.935(f).

[11] See 47 C.F.R. § 2.962(g).