Even in the arcane world of Conformity Assessment, surprises are afoot.
The Big Test House
By some measure—well, my measure anyway—approximately fifty percent of the electronic thingies that we use in our everyday lives are tested by Chinese test labs.
This estimate is based on the number of device certifications that were processed through the FCC’s TCB program in 2015 (about 19,000 total) and include everything from mobile phones to toy cars. The US imports about $135B worth of electronics from China, among a few other things.
For the time being, the testing business will stay in China, which is really great for a lot of folks involved in the established supply chains that feed us $34.99 routers. But it’s not so great for advocates of a Mutual Recognition Arrangement (MRA), a prospect that seemed tantalizingly close until June 15 of this year.
The Heat Was On
As recounted in the May pages of this journal, the FCC had decided to let the FCC 2.948 Listing program expire on July 13, 2016. The intent of the action was to move more of the testing industry into the waiting clipboards of Accreditation Bodies—ostensibly to shore up the veracity of the program to “provide a higher degree of confidence”—and conceivably as a lever to get movement on the MRAs.
The sunset of the FCC 2.948 program essentially jeopardized the operation of about 300 unaccredited test sites all over the world, the largest number (~150) of them in China. As May turned to June this year and the deadline approached there was much nail-biting in Beijing, even as talks between the US and China appeared to gather some much needed momentum towards an MRA.1
For our industry, the ability to test US products for the China market would, in probably some very small way, move the needle in the overwhelmingly one-sided trade in electronics. It could, too, create opportunities for Chinese test labs to move into the US market because they could set up very competitive operations in the US, close to a large destination market.
Alas, this was not meant to be as the FCC slipped the deadline and more, critically, suspended the pressure that brought some of our largest trading partners to the big MRA table. Why is this so critical? The principal reason is that non-MRA countries (Brazil, China, others) require in-country testing of telecommunications/IT products for their domestic markets. Reciprocity is not observed. This becomes a “technical barrier to trade” of sorts because fully equal access is impossible.
The big kibosh was accomplished under the “Memorandum Opinion and Order and Order on Reconsideration” (FCC 16-74) which paved the way for non-MRA labs to gain the recognition that the FCC requires for the acceptability of test results.
Access Denied
Essentially, the “special procedure” that was cryptically alluded to in prior Rulemaking, turned out to be an escape clause from the MRA. While disappointing, it is an understandable action for a Federal agency that is charged with maintaining the integrity of the airwaves as its primary mission (not trade). It is, though, a bit puzzling because the Commission has, over the years, crafted many Rule parts that have arguably favored or dis-favored many sectors of industry.
In the Rulemaking, the Final Flexibility analysis states that “Therefore, we certify that the requirements of this Memorandum Opinion and Order and Order on Reconsideration will not have a significant economic impact on a substantial number of small entities.”2 Maybe the direct effects are minimal, but the longer term effects on small entities that wish to access China are arguably significant.
It is, however, gratifying to know that, according to the R&O, the FCC will “remain committed to furthering the adoption of such agreements wherever possible.“ As it stands now, however, there is very little to no incentive for a non-MRA country to move the discussions forward. It will continue to be “business as usual,” for the most part.
Leverage?
The question is: did the FCC leave any leverage in their decision to continue to keep the MRA discussions on-track? Maybe? Maybe not.
The answer to that question might lie in the details of the KDB released the day after the R&O, known as “KDB974614 D02 Accreditation Body Recognition v01.” This KDB spells out the process by which a test lab in a non-MRA country may continue to test for the FCC approvals.
In the KDB there are a few curious clauses in the process that I—if I were a Chinese test lab—would be very mindful of, notably, a few conditions for applying for FCC recognition of a candidate Accreditation Body (AB).
Obstacles?
The accreditation body must demonstrate technical competence: “This will be verified by having OET staff participate in a witness audit of an EMC/Radio/Telecom testing laboratory.” This is a curious condition for acceptance and would mean OET staff travel and witness an audit in a foreign land. An option to this requirement would be to invoke NIST and MRAs (maybe there is hope!); the KDB goes on to state: “As an exception, a witness audit including OET staff may not be required based on a review of the of the report generated by the National Institute of Standards and Technology (NIST) laboratory accreditation evaluation program as performed to support the Asia Pacific Economic Cooperation (APEC) MRA for Conformity Assessment of Telecommunications Equipment.”
However, the NIST program is of limited use for evaluating domestic accreditation bodies that support U.S. government telecom MRAs only. Aye, there’s the rub3.
Another maybe not-so-curious condition is that all candidate ABs be held out for public comment.
Finally, ABs must also provide : “Evidence that the accreditation body is authorized by the government (emphasis added) in each country it plans to accredit testing laboratories, to test to the FCC requirements,
to operate and perform accreditation services.”
The final condition is a bit curious for two reasons. Firstly, it seems to suggest that the candidate ABs must seek some kind of formal approval to perform accreditation services in other countries. Many U.S. ABs accredit labs in other countries without needing any specific authority from the other governments. Could this new FCC provision encourage an economy’s government to put in place more hurdles for foreign ABs doing business in their economy? Secondly, it encourages ABs to seek out clients in other countries. This is not the spirit of the current cross frontier policies of the accreditation cooperations such as ILAC (ILAC -G21/2012) – which suggest that whenever possible, ABs should offer accreditation generally only in their country, and offer accreditation in broader markets only under exceptional cases. If the AB in the foreign country obtains FCC recognition, should the domestic ABs cease to offer it in that country?
At this point, it will be interesting to see if any additional progress on MRAs will be made. It will also be interesting to see how our industry shifts in the next years if MRAs are allowed to breathe. Finally, it will be interesting to see what kind of reaction will occur as we approach the new deadline: June 12, 2017. Tempus fugit.
Endnotes
- Under the terms of a ‘fully-implemented MRA,” cross-border acceptance of test Results and Certification is possible. “Phase 1” and “Phase 2” are the steps towards this mutual acceptance of Conformity Assessment results, which levels the playing field for all manner of regulated products.
- FCC 16-74
- http://gsi.nist.gov/global/index.cfm/L1-4/L2-16/L3-100
Mike can be reached at mikev@wll.com.
