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Before the

Federal Communications Commission

Washington, D.C. 20554

)

)
In the Matter of
) File No.: EB-08-SE-696
New Generation Hobbies
)

)

CITATION

ILLEGAL MARKETING OF UNAUTHORIZED FREQUENCY DEVICES CAPABLE OF OPERATING
ON RESTRICTED FREQUENCIES

Adopted: July 1, 2011 Released: July 6, 2011

By the Acting Chief, Spectrum Enforcement Division, Enforcement Bureau:

I. INTRODUCTION

1. This is an official CITATION issued pursuant to section 503(b)(5) of
the Communications Act of 1934, as amended ("Communications Act"), to
New Generation Hobbies ("New Generation") for marketing in the United
States unauthorized radio frequency devices that operate on restricted
frequencies in violation of section 302(b) of the Communications Act,
and sections 2.803 and 15.205(a) of the rules ("Rules") of the Federal
Communications Commission ("Commission" or "FCC").

2. New Generation should take immediate steps to come into compliance and
to avoid any recurrence of this misconduct. As explained below and as
provided in the Communications Act, future violations of the Rules in
this regard may subject your company to substantial monetary
penalties, seizure of equipment, and criminal sanctions.

II. background

3. In response to a complaint alleging that New Generation was marketing
certain video transmitters that operate on restricted frequencies in
the 2.4 GHz band, the Spectrum Enforcement Division ("Division") of
the Commission's Enforcement Bureau issued a letter of inquiry ("LOI")
to New Generation on September 28, 2009. At the time of the LOI,
Division staff observed that New Generation was marketing the
following two 2.4 GHz transmitters on its web site, www.nghobbies.com:
LawMate 500 mW 2.4 GHz transmitter and LawMate 1 W 2.4 GHz
transmitter.

4. In its October 27, 2009 response to the LOI, New Generation states
that it began marketing these devices on its web site in 2008, and has
sold 25 units of the LawMate 500 mW 2.4 GHz transmitter and 25 units
of the LawMate 1 W 2.4 GHz transmitter to customers in the United
States. It states that both devices are capable of operating on each
of the following frequencies: 2410 MHz, 2430 MHz, 2450 MHz, 2470 MHz,
2370 MHz, 2390 MHz, 2490 MHz, and 2510 MHz. New Generation indicates
that it purchases these two devices from a manufacturer in Taiwan, and
that it does not export to the United States; rather, New Generation
claims that it sells the devices in question online via its web site,
and maintains that "the customer who makes the purchase is the
importer."

5. In addition, New Generation claims that it does not target United
States customers with any of its products. In this regard, it states
that it does not advertise or promote any of its products in the
United States and that its web site is "located in Canada and not in
the United States." Further, it asserts that "[a]s a Canadian company
that does not have any affiliates, agents, distributors or resellers
in the United States," it is "not required to be aware of or follow
United States and FCC regulations when listing products" on its web
site. Nevertheless, New Generation states that "at the beginning of
2009," it placed "notes and warnings next to product descriptions
informing customers to be aware of the legality of their respective
purchases and importing such products to the United States." New
Generation also indicates that there is a warning next to the two
devices in question that a U.S. amateur radio license is required to
operate the devices due to their power output. Finally, New Generation
states that it has "placed additional warnings for the channel numbers
which are outside of the allowed U.S. frequency spectrum."

III. applicable law and violations

6. Section 302(b) of the Communications Act provides that "[n]o person
shall manufacture, import, sell, offer for sale, or ship devices or
home electronic equipment and systems, or use devices, which fail to
comply with regulations promulgated pursuant to this section." Section
2.803(a)(1) of the Commission's implementing regulations provides
that:

no person shall sell or lease, or offer for sale or lease (including
advertising for sale or lease), or import, ship, or distribute for the
purpose of selling or leasing or offering for sale or lease, any radio
frequency device unless: [i]n the case of a device subject to
certification, such device has been authorized by the Commission in
accordance with the rules in this chapter and is properly identified and
labeled as required by S: 2.925 and other relevant sections in this
chapter.

Additionally, section 2.803(g) of the Rules provides in pertinent part
that:

[R]adio frequency devices that could not be authorized or legally operated
under the current rules ... shall not be operated, advertised, displayed,
offered for sale or lease, sold or leased, or otherwise marketed absent a
license issued under part 5 of this chapter or a special temporary
authorization issued by the Commission.

Pursuant to section 15.201(b) of the Rules, intentional radiators, such as
video transmitters, must be authorized in accordance with the Commission's
certification procedures prior to the initiation of marketing in the
United States. Section 2.803(e)(4) of the Rules defines "marketing" as the
"sale or lease, or offering for sale or lease, including advertising for
sale or lease, or importation, shipment or distribution for the purpose of
selling or leasing or offering for sale or lease."

7. Based on the information provided in New Generation's LOI Response,
the LawMate 500 mW 2.4 GHz transmitter and the LawMate 1 W 2.4 GHz
transmitter are both ineligible for a grant of certification. New
Generation's response confirms that both transmitters operate within
restricted frequency bands listed in section 15.205(a) of the Rules.
As such, these devices cannot comply with the FCC's technical
standards and therefore cannot be certified as required by Commission
Rules or marketed in the United States.

8. New Generation claims that it is not targeting its marketing to
customers in the United States and that, as a Canadian company that
does not have any affiliates, agents, distributors or resellers in the
United States, it is not required to be familiar with or follow FCC
regulations. We disagree. Section 302(b) of the Communications Act and
section 2.803 of the Rules apply to radio frequency devices marketed
in the United States regardless of whether the devices are marketed by
a domestic or foreign company. As noted above, "marketing" includes
"sale or lease, or offering for sale or lease, including advertising
for sale or lease, or importation, shipment or distribution for the
purpose of selling or leasing or offering for sale or lease." New
Generation admits that it offered for sale (via its website), sold,
and shipped the devices at issue to customers located in the United
States. While New Generation claims that it included warnings on its
web site informing customers that it may not be legal to operate these
devices in the United States, these warnings do not negate New
Generation's violations of the Communications Act and the Commission's
Rules.

9. Furthermore, we emphasize that it is insufficient and misleading for
manufacturers and retailers, like New Generation, to include a
disclaimer on their websites stating or implying that U.S. consumers
bear sole responsibility for complying with the applicable legal
obligations. Such disclaimers are misleading because they fail to
disclose that entities offering unauthorized devices are also
violating the Communications Act and the Rules. In this regard, we
note that section 2.803 of the Rules is specifically directed at, and
enforceable against, persons selling, leasing, offering for sale or
lease, importing, shipping, or distributing for the purpose of sale or
lease, noncompliant radio devices in the United States. Consequently,
New Generation violated the Rules both by offering the device for sale
to U.S. customers and completing the sale transaction, and its use of
a disclaimer does not absolve it of liability.

10. Accordingly, we find that New Generation has violated section 302(b)
of the Communications Act and sections 2.803 and 15.205(a) of the
Rules by marketing in the Unites States radio frequency devices that
are not certified and are not eligible for a grant of certification.
We therefore issue this Citation to New Generation for violating the
Communications Act and the Rules as discussed above, and we direct New
Generation to take prompt action to ensure that it does not continue
to violate the Communications Act or the Rules.

IV. FUTURE COMPLIANCE

11. If, after receipt of this Citation, New Generation violates the
Communications Act or the Rules by engaging in conduct of the type
described herein, the Commission may impose monetary forfeitures of up
to $16,000 for each such violation or each day of a continuing
violation and up to $112,500 for any single act or failure to act. In
addition, violations of the Communications Act or the Rules can result
in seizure of equipment through in rem forfeiture actions, as well as
criminal sanctions, including imprisonment.

12. New Generation may respond to this Citation within thirty (30) days
after the release date of this Citation either through (1) a personal
interview at the closest FCC office, or (2) a written statement. Any
written statements should specify what actions have been taken by New
Generation to ensure that it does not violate the Rules governing the
marketing of radio frequency equipment in the future. Please reference
file number EB-08-SE-696 when corresponding with the Commission.

13. Under the Privacy Act of 1974, any statement or information provided
by New Generation may be used by the Commission to determine if
further enforcement action is required. Any knowingly or willfully
false statement, or concealment of any material fact, made in reply to
this Citation is punishable by fine or imprisonment. Please also note
that section 1.17 of the Rules requires that New Generation provide
truthful and accurate statements to the Commission.

V. CONTACT INFORMATION

14. The closest FCC Office is the Detroit Office in Farmington Hills,
Michigan. Please contact Celia Lewis by telephone, 202-418-7456, if
New Generation wishes to schedule a personal interview. The interview
should take place within thirty (30) days after the release date of
this Citation. Send any written statement within thirty (30) days
after the release date of this Citation to:

John D. Poutasse

Acting Chief, Spectrum Enforcement Division

Enforcement Bureau

Federal Communications Commission

445 12th Street, S.W., Rm. 3-C366

Washington, D.C. 20554

Re: EB File No. EB-08-SE-696

15. Reasonable accommodations for people with disabilities are available
upon request. Include a description of the accommodations needed. Also
include a way we can contact New Generation if we need more
information. Please allow at least five (5) days advance notice; last
minute requests will be accepted, but may be impossible to fill. Send
an e-mail to fcc504@fcc.gov or call the Consumer & Governmental
Affairs Bureau:

For sign language interpreters, CART, and other reasonable accommodations:

202-418-0530 (voice), 202-418-0432 (tty);

For accessible format materials (braille, large print, electronic files,
and audio format):

202-418-0531 (voice), 202-418-7365 (tty).

VI. ORDERING CLAUSES

16. IT IS ORDERED that a copy of this Citation shall be sent both by First
Class U.S.

Mail and Certified Mail, Return Receipt Requested to New Generation
Hobbies, 91 Ashburn Crescent, L4L 1G8, Woodbridge, Ontario, Canada.

FEDERAL COMMUNICATIONS COMMISSION

John D. Poutasse

Acting Chief, Spectrum Enforcement Division

Enforcement Bureau

47 U.S.C. S: 503(b)(5).

47 U.S.C. S: 302a(b), 47 C.F.R. S:S: 2.803, 15.205(a).

See Letter from Kathryn S. Berthot, Chief, Spectrum Enforcement Division,
Enforcement Bureau, Federal Communications Commission, to New Generation
Hobbies (September 28, 2009).

See www.nghobbies.com (visited April 10, 2009; June 1, 2009; and September
28, 2009).

See Letter from Zoltan Pittner, New Generation Hobbies, to Celia Lewis,
Paralegal Specialist, Spectrum Enforcement Division, Enforcement Bureau,
Federal Communications Commission (October 27, 2009) ("LOI Response").

Id. at 1.

Id.

Id. at 2.

Id.

Id. Division staff did not observe any notices or warnings on or adjacent
to the product descriptions for the two transmitters at issue when
visiting New Generation's web site prior to the issuance of the LOI. While
New Generation is apparently no longer marketing the LawMate 1 W 2.4 GHz
transmitter on its web site, it continues to market the LawMate 500 mW 2.4
GHz transmitter on its web site,
http://www.nghobbies.com/cart/index.php?main_page=product_info&cPath=1_50&products_id=102
(visited July 1, August 2, and December 17, 2010, and May 26, 2011). In
2010, the following statements were posted on New Generation's web site
under the product description for the LawMate 500 mW 2.4 GHz transmitter:

Note: The use and operation of this product in most states, countries may
require a HAM or Amateur radio license. New Generation Hobbies cannot be
held responsible for your actions if you use this product without proper
licensing.

Warning!

Important note for US and Canada customers:

Please note, chanels [sic] 4,5,6,7 and 8 of this transmitter are outside
of the allowed frequency spectrum for US and Canada. These channels cannot
be legally used even if you have a Radio Amaterur [sic] or HAM license.
Please make sure that you obey your countries rules and regulations around
use of these devices and use them only on channels 1, 2 and 3. New
Generation Hobbies cannot be held responsible for using these transmitters
on channels which are outside of the legal allowed frequency ranges.

To date, the following statements are posted on the New Generation's
website for the LawMate 500mW 2.4 GHz transmitter:

Disclaimer:

* The frequency band or some of the frequency bands used by this
transmitter may be illegal in some countries including Canada and USA.
Please make sure you are up to date with the regulations in your country
before ordering this product.

** The power level of this transmitter may be illegal in your country.
Please check your local regulations and make sure you order this device
only if you have the required licensing to use this product.

*** New Generation Hobbies cannot be held responsible for illegal use of
this product.

See
http://www.nghobbies.com/cart/index.php?main_page=product_info&cPath=1_50&products_id=102
(visited July 1, August 2, and December 17, 2010, and May 26, 2011).

LOI Response at 2.

Id.

47 C.F.R. S: 2.803(g).

47 C.F.R. S: 15.201(b).

Section 15.3(o) of the Rules defines an "intentional radiator" as a
"device that intentionally generates and emits radio frequency energy by
radiation or induction." 47 C.F.R. S: 15.3(o).

47 C.F.R. S: 2.803(e)(4).

Id.

Section 15.205(a) allows intentional radiators to transmit only spurious
emissions in the restricted frequency bands. 47 C.F.R. S: 2.1 defines
spurious emissions as "[e]mission[s] on a frequency or frequencies which
are outside the necessary bandwidth and the level of which may be reduced
without affecting the corresponding transmission of information. Spurious
emissions include harmonic emissions, parasitic emissions, intermodulation
products and frequency conversion products, but exclude out-of-band
emissions." The subject transmitters intentionally transmit radio
frequency energy on restricted frequencies within the 2310-2390 and
2483.5-2500 MHz bands.

47 C.F.R. S: 2.803(e)(4).

As noted above, Division staff did not observe these warnings when it
visited the New Generation web site prior to the issuance of the LOI. See
supra note 13. Furthermore, while amateur radio service equipment is
exempt from the FCC's equipment certification requirement, it is a
violation of the Commission's regulations to market in the United States a
transmitter that is designed or intended to operate on frequencies outside
of the authorized amateur radio service bands if such equipment has not
been issued a grant of equipment certification. See Extended Coverage High
Frequency Transceivers, Public Notice, 1996 WL 242469 (OET, May 13, 1996).
The LawMate 500 mW 2.4 GHz and 1 W 2.4 GHz transmitters operate on
frequencies outside of the authorized amateur radio service bands,
including restricted frequencies listed in section 15.205(a). Thus, these
devices are not amateur radio devices exempt from the equipment
certification requirements.

See 47 U.S.C. S:S: 401, 501, 503; 47 C.F.R. S: 1.80(b)(3). This amount is
subject to further adjustment for inflation (see id. S: 1.80(b)(5)), and
the forfeiture amount applicable to any violation will be determined based
on the statutory amount designated at the time of the violation.

See 47 U.S.C. S: 510.

See Privacy Act of 1974, 5 U.S.C. S: 552a(e)(3).

See 18 U.S.C. S: 1001 et seq.

47 C.F.R. S: 1.17 ("[N]o person subject to this rule shall; (1) In any
written or oral statement of fact, intentionally provide material factual
information that is incorrect or intentionally omit material information
that is necessary to prevent any material factual statement that is made
from being incorrect or misleading; and (2) In any written statement of
fact, provide material factual information that is incorrect or omit
material information that is necessary to prevent any material factual
statement that is made from being incorrect or misleading without a
reasonable basis for believing that any such material factual statement is
correct and not misleading.").

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Federal Communications Commission DA 11-1164