Cheng-yi Liu, Esq.
Dealers and distributors of wireless equipment and accessories should be aware that the products they carry may be subject to regulatory requirements, and selling the wrong devices could potentially subject them to investigations, penalties or other enforcement actions by federal regulators. In the U.S., any “radio frequency devices” that can generate or emit a radio signal (including devices such as wireless handsets, Bluetooth headsets, etc.) are subject to various federal laws and requirements administered by the Federal Communications Commission (“FCC” or “Commission”). These types of devices must comply with various technical standards (among other things), and certain types of devices may even require specific authorizations or licenses from the FCC.
More significantly for dealers and distributors, the FCC’s regulations also make it unlawful to market or sell any radio frequency devices that are not in compliance with applicable requirements. This means that simply advertising or selling an unauthorized radio frequency device could bring potential enforcement actions and penalties. For example, on April 20, 2010, the FCC’s Enforcement Bureau released a Notice of Apparent Liability for Forfeiture (“NAL”) which proposed a $25,000 penalty against a company, Phonejammer.com (“Phonejammer”), for marketing cell phone jammers in the U.S. via the company’s website. Despite Phonejammer’s denial of the allegations, the FCC’s Enforcement Bureau found enough evidence (which included information posted on the company’s website) to conclude that the company was in violation of applicable FCC regulations. While the Phonejammer NAL deals specifically with cell phone jammers, it also illustrates that marketing or selling any radio frequency device that is not in compliance with FCC requirements is a potential violation of the FCC’s rules.
Radio Frequency Devices
The FCC’s rules prohibit, among other things, the sale, marketing, advertising, importation, or distribution of any radio frequency device unless it has been specifically authorized by the FCC (if required), or the device complies with all applicable technical standards and administrative requirements (e.g., declarations, labeling, identification, etc.) under the FCC’s rules. If a radio frequency device does not or cannot comply with these requirements, or is otherwise specifically prohibited by applicable law (such as in the case of cell phone jammers), then it is generally unlawful to operate, market or sell such a device in the U.S. For example, federal law specifically prohibits interfering with or jamming licensed radio communications such as cellular or PCS phone services. Consequently, any device that is designed specifically to interfere with licensed radio communications (such as a cell phone jammer) could not be operated lawfully without specific FCC authorization, and companies would be prohibited from marketing or selling any such device in the U.S.
Phonejammer Background
Phonejammer’s website indicates that it is headquartered in the United Kingdom, and it makes no attempt to disguise the fact that Phonejammer is selling equipment designed specifically to interfere with or jam cell phone signals. The company advertises its products in both U.S. dollars and European euros, and its online order form apparently allows customers to enter shipping addresses located in the U.S. According to the NAL, Phonejammer’s website also contained various testimonials providing feedback from U.S. customers that had purchased products from the company. All of these factors led the FCC’s Enforcement Bureau to its initial conclusion that Phonejammer was unlawfully marketing cell phone jammers in the U.S.
Normally, the FCC’s Enforcement Bureau only has authority to issue monetary forfeitures against companies that hold licenses, permits, certificates, or other authorizations issued by the FCC. For a person or company without such authorizations, the FCC must first issue a citation that provides notice of the alleged violations, and provides the person or company with an opportunity to meet with an official at the Commission. However, if the person or company subsequently commits the same violations described in the citation, the FCC then has authority to assess monetary penalties or pursue other enforcement actions.
Based upon its observations on Phonejammer’s website, the FCC’s Enforcement Bureau issued an initial citation to the company in May 2008. The citation warned Phonejammer that its marketing of cell phone jammers in the U.S. was in apparent violation of applicable FCC regulations, and offered the company an opportunity to meet with FCC officials. Phonejammer apparently ignored the citation, and no response was provided to the FCC. Subsequently in 2009 and 2010, the FCC’s Enforcement Bureau discovered two specific instances where Phonejammer’s cell phone jammers were being utilized by customers in the U.S. after investigating reports of interference to wireless phone services. Upon further inquiry, both customers admitted that the devices were purchased on Phonejammer’s website and shipped to their addresses in the U.S.
Despite this evidence, Phonejammer continued to deny the allegations and pointed specifically to the company’s website where it had disclosed that its products were not authorized for use in the U.S. However, the NAL discredited Phonejammer’s claims due, in part, to the fact that the company failed to attest to the truth and accuracy of its responses by submitting, under penalty of perjury, an accompanying affidavit or declaration. Notwithstanding the company’s assertions, the FCC had specific evidence that two different models of cell phone jammers were actually shipped to U.S. customers, and the Enforcement Bureau assessed a proposed forfeiture of $7,000 for each of the two violations. In addition to this $14,000 forfeiture, the Enforcement Bureau determined that the company’s actions also warranted an upward adjustment in the amount of $11,000. The upward adjustment was based upon Phonejammer’s intentional non-compliance with applicable laws after it was put on notice of its violations by the FCC’s citation, as well as the fact that the cell phone jammers sold by the company had caused actual interference to licensed radio communications in the U.S., including interfering with specific frequencies used by public safety entities.
Lessons Learned
Phonejammer serves as an unfortunate example that the FCC’s regulatory and enforcement reach can go well beyond traditional regulated telecommunications service providers to encompass non-regulated businesses that simply market or sell wireless devices. Wireless devices or radio frequency devices are potentially subject to various FCC requirements, and marketing or selling devices that are not authorized by the FCC may subject dealers and distributors to potential enforcement actions and penalties. Finally, the NAL against Phonejammer also serves as a warning that: (a) the FCC’s Enforcement Bureau is actively policing the industry and could be monitoring the types of wireless devices being sold through websites and other venues; (b) citations and other inquiries from the FCC’s Enforcement Bureau should be taken seriously and significant efforts should be made to ensure a proper response; and (c) intentional non-compliance or egregious violations may subject violators to additional penalties or upward adjustments.
This article is provided for informational purposes only, and is intended neither to provide nor to substitute for legal advice.
May 13, 2010
| This article was authored by the Law Offices of Thomas K. Crowe, P.C., a Washington D.C.-based specialty law firm serving the communications industry. Specialty services cover agreements with distributors and providers, FCC licenses, USF reporting and disputes, FCC Enforcement Bureau matters, CPNI, CALEA, state licensing, and more. Contact the firm by phone at 202-263-3640, by email at .(JavaScript must be enabled to view this email address), or via the firm’s website, www.tkcrowe.com. |