By Lisa Johnston
New products on display at the American International Toy Fair, held in N
The FCC's recent ruling concerning certain radar detectors that interfere with credit card terminals, such as those in gas stations, disappointed industry members. The ruling granted only a minor extension for retailers to sell through old detectors, and could impact fourth quarter sales.
The FCC recently extended the deadline for when retailers must stop selling certain radar detectors by 30 days, or until Oct. 27, although the industry had asked for an extension until July 2003. In addition it offered no relief to suppliers who are required to adhere to the original Aug. 28 deadline, although the industry asked for a deadline of Dec. 31, 2002.
Some radar detector companies said they are left without product to sell at present. Uniden is adjusting its entire radar detector line and said it is currently not shipping product, although it expects to "have plenty of inventory" in 45 days, according to product marketing director Rex Holoway.
The Whistler Group is currently shipping some compliant product, but other products may not be available until approximately late October, according to product development director Steve Boyle.
Cobra and Beltronics said they have already received FCC approval on new lines.
On July 19 the FCC ruled that certain radar detectors were interfering with credit card and other terminals known as VSAT (Very Small Aperture Terminals). The FCC required radar detector suppliers to reduce emissions in the 11.7 GHz to 12.2 GHz band and gave suppliers only 30 and 60 days, respectively, from the publication of the FCC ruling in the Federal Register to comply. Industry members did not dispute the nature of the ruling, only the very short deadlines. As a result, the Radio Association Defending Airwave Rights (RADAR), a trade group, filed a petition for partial reconsideration and a motion to stay the ruling asking for the above-mentioned extensions. On Aug. 28, the FCC responded with the 30-day extension.
RadioShack is particularly hard hit. According to the FCC's response, the retailer filed a waiver request claiming that "it will face significant economic losses because it has over 100,000 units worth several million dollars that it would not be able to sell, and there will be another several million dollars in lost sales because it will not have compliant units available for sale during the fourth quarter of this year."
RadioShack recently told TWICE, however, that it will comply with the ruling, and is currently selling off inventory at sale prices. "Our plan is to try to sell through the inventory we have. We will respect and honor the deadline the FCC has put forth," said Don Carroll, RadioShack senior VP/GM for the Connecting Things strategic business unit, noting that the company may also sell off product offshore. He added that RadioShack expects to have compliant detectors for sale in the fourth quarter.
RADAR president Janice Lee said of the FCC's response, "Of course, I do not think [the grace period] is long enough [considering] the history of other products that the FCC has responded to for interference — like CB radios and PCs."
The FCC, however, claims that the interference from radar detectors was more serious than that of other products in the past. "We did look at prior actions and the past cases posed more of a potential for interference vs. the actual demonstrated interference in this case," said Alan Scrime, policy and rules division chief in the Office of Engineering and Technology for the FCC.
However, Lee and other industry members claim that there were only six documented cases of interference by radar detectors with VSATs.
Scrime also stated that suppliers had plenty of warning as the FCC alerted them that they needed to take action more than a year ago. Last October, the FCC issued a notice of proposed rule making that said "we were not happy with the progress and then in July we made our ruling," he said.
Suppliers however, said they had no concrete guidelines by which to change their products until the formal ruling in July. Cobra noted that while it made a decision to redesign its detectors early on, it still was at risk. "We didn't know ultimately what the ruling from the FCC would be," said senior VP Tony Mirabelli. "They might have put other restrictions on the detectors that were at the time unknown to us. It's very dangerous to engineer something that you feel would be in concert with an unknown ruling."
Both Mirabelli and Lee noted that the interference issue might be due in part to the fact that the satellite companies simply need to adjust the aim of the satellites, away from the highways.
"Normally when an issue like this surfaces, the party that feels it has been offended goes to the offender and they make arrangements. Then they go to the FCC and say we've solved our differences but it's going to require a regulatory change and this is what we'd like. What occurred is we heard a rumor that something was going on. The FCC wouldn't disclose who the offending parities were," said Mirabelli.
Suppliers also noted that the VSAT industry has a very strong lobby, which may have impacted the FCC's decision. The FCC's Scrime denied that, saying the FCC "is an unbiased body and Part 15 devices have an obligation to operate within practical limits or cease operation."
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.