Most companies assume the Federal Communications Commission (FCC) regulates telecommunications carriers, broadcasters, and satellite service providers. In practice, its reach extends much further. Buying a radio system for use at a commercial property warehouse, testing or marketing a new device, or restructuring a subsidiary can each put a company squarely within FCC jurisdiction, often without anyone realizing it.

This is the first installment in a series introducing the attorneys of the Nelson Mullins Communications Practice Group and the business problems they solve for clients across industries.

Four Areas Where Companies Get Caught

Private wireless network licenses. Companies across hospitality, transportation, manufacturing, and public utilities hold these for internal use. Issues include new license applications, waivers of build-out requirements, spectrum leases, and transactions.

Experimental licenses. Used to test radiofrequency devices before they are manufactured and marketed.

Equipment authorizations. Required for devices that intentionally or unintentionally use the radiofrequency spectrum. Manufacturers and sellers, including importers, are also subject to labeling and disclosure requirements.

M&A involving FCC and state licenses. FCC approval is required for transactions, including internal restructurings, that affect private wireless licenses. Also, some companies do not realize they also hold telecommunications licenses from state utility commissions.

Common Triggers

FCC oversight is most often prompted by:

1. Purchasing radio communications systems that require a private wireless license to operate;
2. Developing and testing radiofrequency devices;
3. Operating and marketing devices that use spectrum or emit radiofrequency energy; and
4. Corporate transactions, internal restructurings, and bankruptcy filings involving entities that hold FCC or state communications licenses.

Why It Matters

For companies outside the communications sector, following FCC regulations is rarely considered as part of regulatory compliance. Rather, it surfaces inside operations, product development, marketing, and deal work, which is where it tends to be overlooked until closing a transaction is delayed due to needing regulatory approval or an enforcement inquiry.

Contact Debra McGuire Mercer to discuss whether your operations, products, or transactions fall within FCC jurisdiction.