Many larger industrial, manufacturing, service and energy companies use internal communications systems, but do not realize that the Federal Communications Commission (“FCC”) regulates them. The FCC, however, regulates more than television and radio stations and telephone companies. The Communications Act requires virtually all radio systems – including those typically used by the above types of companies – to be properly licensed, including private two-way radio and microwave systems.

We would like to make sure that our clients are aware of these FCC regulations because there are stiff fines for failure to comply with them. In addition, irregularities in the company’s license status that come to light during a due diligence process can jeopardize the closing of an asset purchase or stock transfer transaction. Many of these communications systems are vitally important to companies and loss of the FCC license could be devastating to company operations.

Eckert Seamans has the expertise to keep your company out of trouble with the FCC, to help get your FCC licensing in order, and to assist your company if the FCC has informed your company of violations and apparent liability to sanctions. We offer compliance reviews, development of compliance manuals, and case-by-case assistance with issues as they arise.

Q. Our company is not in the communications business. We don’t have FCC regulatory issues, do we?

A. You do not have to be in the communications business to be covered by FCC regulations. If you use radios for mobile communications or to monitor or control systems or infrastructure, or if you manufacture, import or market products that incorporate components that produce radio signals, you may come under FCC regulations.

Q. We just use cell phones for our mobile communications. Are we subject to FCC regulations?

A. Probably not. If cell phones are all you use to communicate, you are merely a customer of a commercial wireless carrier, no different than being a customer of your local telephone company for your home phone.

Q. How can we know for sure if we are using FCC-regulated communications systems?

A. Think about how you communicate, especially your mobile communications. Does your company operate trucks, boats or private aircraft? How about locomotives, cranes, or other heavy equipment? Do employees use “walkie-talkies” (other than “push-to-talk” cell phones)? If the answer is yes, the chances are good that you are using FCC-licensed, private radio systems for communications.

Are there antennas on your vehicles or buildings, such as microwave dishes or “whip” antennas? If there are, you probably are using a radio system that requires an FCC license. And if you have FCC licenses, you have potential FCC regulatory issues.

Q. Can Eckert Seamans find out for us if our company is listed in the FCC’s licensing records?

A. Yes. We can search the FCC’s database for all licenses that your company may hold.

Q. If we have FCC licenses, what kinds of issues can arise?

A. Let’s back up a bit. First, you need to make sure that you have an FCC license for all radio systems that require a license for operation. Operation of a radio system without the required license is “unlicensed operation” and can result in a substantial fine.

If you have a license, you must remember to renew the license when the time comes. Operation of a radio system under an expired license is the same as operation without a license.

If you have a license, you must apply to modify that license if you make any changes to station power, antenna height, transmitter location, operating radio frequency or number of mobile units.

If you sell the licensee company, acquire a company that has FCC licenses, or undergo a corporate reorganization involving licensee companies, you must obtain the prior consent of the FCC. This is true whether the transaction is structured as a stock transfer or an asset purchase.

If your company has an antenna support structure, such as a tower, on which one or more antennas have been installed, the company could be subject to a variety of FCC regulations, including tower registration requirements, air hazard obstruction painting and lighting requirements, site fencing and signage requirements and limitations on exposure of employees or members of the general public to radio frequency energy.

Q. We are a manufacturing company. Do any FCC regulations apply to our products?

A. Quite possibly. If your product produces a radio signal, either deliberately or as a by-product of its operation, FCC regulations apply to your product. Products or components of products that generate radio emissions are subject to FCC regulations that govern permissible levels of radio frequency emissions, as well as regulations that govern the importation and marketing of the devices or components of devices. This includes, for example, computing devices and digital controls used in appliances. If there are circuit boards or computer chips in your product, you or your supplier probably are subject to FCC equipment authorization regulations.


The Utilities and Telecommunications Alert is intended to keep readers current on matters affecting utilities and telecommunications issues and is not intended to be legal advice. If you have questions, please contact your Eckert Seamans attorney or any member of the Utilities and Telecommunications Group.

© Eckert Seamans Cherin & Mellott, LLC, 2010, all rights reserved.