Radio Experimentation and Market Trials, 52408-52415 [2015-21295]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 80, Number 168 (Monday, August 31, 2015)]
[Rules and Regulations]
[Pages 52408-52415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21295]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 2 and 5

[ET Docket Nos. 10-236, 06-155; FCC 15-76]


Radio Experimentation and Market Trials

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This document responds to three petitions for reconsideration 
seeking to modify certain rules adopted

[[Page 52409]]

in the Report and Order in this proceeding. In response, the Commission 
modifies its rules, consistent with past practice, to permit 
conventional Experimental Radio Service (ERS) licensees and compliance 
testing licensees to use bands exclusively allocated to the passive 
services in some circumstances; clarifies that some cost recovery is 
permitted for the testing and operation of experimental medical devices 
that take place under its market trial rules; and adds a definition of 
``emergency notification providers'' to its rules to clarify that all 
participants in the Emergency Alert System (EAS) are such providers. 
However, the Commission declines to expand the eligibility for medical 
testing licenses.

DATES: Effective September 30, 2015.

FOR FURTHER INFORMATION CONTACT: Rodney Small, Office of Engineering 
and Technology, (202) 418-2452, email: Rodney.Small@fcc.gov, TTY (202) 
418-2989.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Memorandum Opinion & Order (MO&O), ET Docket Nos. 10-236 and 06-155, 
FCC 15-76, adopted July 6, 2015, and released July 8, 2015. The full 
text of this document is available for inspection and copying during 
normal business hours in the FCC Reference Center (Room CY-A257), 445 
12th Street SW., Washington, DC 20554. The full text may also be 
downloaded at: www.fcc.gov. People with Disabilities: To request 
materials in accessible formats for people with disabilities (braille, 
large print, electronic files, audio format), send an email to 
fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 
202-418-0530 (voice), 202-418-0432 (tty).

Summary of Memorandum Opinion and Order

    1. In the Report and Order (R&O) in this proceeding, 78 FR 25138, 
April 29, 2013, the Commission updated its part 5 ERS rules to add 
options that provide additional flexibility to keep pace with the speed 
of modern technological change, and an environment where creativity can 
thrive. Specifically, the Commission added three new types of ERS 
licenses to supplement the existing conventional ERS license: the 
program license, the medical testing license, and the compliance 
testing license. The Commission also modified its market trial rules to 
eliminate confusion and more clearly articulate its policies with 
respect to marketing products prior to equipment certification, 
including establishing a subpart for product development and market 
trials.
    2. In this MO&O, the Commission responds to petitions for 
reconsideration of the R&O filed by Marcus Spectrum Solutions LLC 
(Marcus); Medtronic, Inc. (Medtronic); and Sirius XM Radio Inc. (Sirius 
XM) and EchoStar Technologies, Inc. (EchoStar).

Marcus Petition

    3. In its petition, Marcus asks that the Commission reconsider a 
modified provision in Sec.  5.85(a) of the Commission's rules that 
prohibits all experimental licensees from using bands exclusively 
allocated to the passive services. Marcus notes that, while the 
modified rule was proposed in the Notice of Proposed Rulemaking (NPRM) 
in this proceeding (76 FR 6928, February 8, 2011) and adopted in the 
rules appendix of the R&O, it is inconsistent with both the text of the 
R&O and existing policy under which conventional experimental licensees 
have been allowed to operate in bands allocated to the passive 
services. Marcus argues that there are legitimate reasons for short-
term conventional experiments in some of the bands allocated for 
passive use. Specifically, Marcus argues that testing new concepts in 
modulation, high bandwidth, or other technical details in a given non-
passive band that might be appropriate as a future home for a new 
service can be very expensive if that testing requires custom-made 
equipment. Marcus maintains that there is a valid reason to verify the 
new technical concepts in a band in which equipment is much less 
expensive, even though long-term use of that band might not be 
possible. Therefore, Marcus recommends new language for Sec.  5.85(a) 
that would prohibit experimental use of the passive bands by the new 
types of ERS licensees and in product development and market trials, 
while also specifying that any conventional experimental licensee 
proposing use of the passive bands for an experiment must include a 
justification of why non-passive bands are inadequate for that 
experiment. The Boeing Company (Boeing) and Battelle Memorial Institute 
(Battelle) support grant of the Marcus Petition, and no commenting 
parties objects.
    4. As Marcus observes, Sec.  5.85(a) of the rules is inconsistent 
with both the Commission's existing treatment of conventional ERS 
licenses and the text of the R&O. This inconsistency arose in the NPRM, 
where the text proposed that only program licenses would be prohibited 
from using ``restricted'' bands (including passive service bands) 
listed in Sec.  15.205(a) of the Commission's rules. In contrast, Sec.  
5.85(a) of the rules proposed that all experimental use of ``any 
frequency or frequency band exclusively allocated to the passive 
services'' be prohibited. This inconsistency was not addressed by any 
commenting party, but the Commission's stated intent in the text of the 
R&O was to continue previous practice regarding conventional ERS 
licenses. In addition, the Commission observes that the R&O stated: 
``Due to the nature of the compliance testing process, the Commission 
will not impose on them most of the limitations and reporting 
requirements that it will impose on program licenses. Specifically, 
because compliance testing often involves emission measurements in 
restricted bands, compliance testing licensees will be exempt from the 
prohibition on operating in the restricted bands listed in Sec.  
15.205(a) of the rules and from operating in the bands allocated 
exclusively to the passive services.'' Thus, the Commission modifies 
Sec.  5.85(a) to permit conventional and compliance testing licensees 
to operate on passive bands.
    5. In making these modifications to Sec.  5.85(a), the Commission 
observes that a number of conventional experiments have operated in 
passive service bands without causing harmful interference to passive 
services, and the Commission concurs with Marcus, Boeing, and Battelle 
that such conventional experimental use should be permitted to continue 
under some circumstances. The Commission observes that in those 
instances in which an experimental applicant had requested use of a 
passive band, OET staff in coordination with NTIA undertook a case-by-
case review of the application and imposed specific conditions on the 
applicant, as warranted, to minimize the potential that the experiment 
would cause harmful interference to passive service(s) that use that 
band. The Commission therefore finds generally appropriate Marcus's 
recommended new language for Sec.  5.85(a) that would continue to 
permit conventional ERS use of the passive bands under limited 
circumstances, and further modifies the language to also permit 
compliance testing licensees to use those bands.

Medtronic Petition

    6. A medical testing experimental radio license (medical testing 
license) is issued to hospitals and health care institutions that 
demonstrate expertise in testing and operation of experimental medical 
devices that use wireless telecommunications technology or 
communications functions in clinical trials for diagnosis, treatment, 
or patient

[[Page 52410]]

monitoring. These licenses are for testing medical devices that would 
operate under existing rules and use radio frequency (RF) wireless 
technology for diagnosis, treatment, or patient monitoring for the 
purposes of, but not limited to, assessing patient compatibility and 
usage issues, as well as operational, interference, and RF immunity 
issues. Unlike a conventional experimental license, a medical testing 
license would allow a health care institution to conduct a wide variety 
of unrelated clinical trials under a single authorization. The 
Commission will grant authorizations for a geographic area that is 
inclusive of an institution's real-property facilities where the 
experimentation will be conducted and that is under the applicant's 
control. Applications also may specify, and the Commission will grant 
authorizations for, defined geographic areas beyond the institution's 
real-property facilities that will be included in clinical trials and 
monitored by the licensee.
    7. Medtronic's petition raises two issues, which the Commission 
addresses in turn. First, Medtronic asks that the Commission expand the 
eligibility for the medical testing license. The second issue pertains 
to cost reimbursement for clinical trials, which is permitted under 
Food and Drug Administration (FDA) rules. Medtronic requests that the 
Commission clarify that such reimbursement does not constitute 
impermissible marketing under Sec. Sec.  2.803 or 2.805 of its rules. 
Medtronic asserts that these changes could greatly facilitate clinical 
trials because the devices would not need to have first been approved 
by the Commission under its equipment authorization program. No party 
filed comments regarding any of the issues raised by Medtronic's 
petition.
    8. Medical testing license eligibility. Medtronic observes that the 
R&O established this license to meet the needs of the medical community 
and to allow medical researchers to conduct clinical trials, but 
limited eligibility for medical testing licenses to health care 
facilities. Medtronic notes that FDA rules permit a wide range of 
entities, including non-health care facilities, to sponsor or conduct 
clinical trial testing. In particular, Medtronic notes that the FDA 
classifies certain entities involved in medical device research as 
either ``sponsors'' or ``sponsor-investigators'' of clinical trials, 
with those terms defined as follows:

    Sponsor--A person who initiates, but who does not actually 
conduct, the investigation, that is, the investigational device is 
administered, dispensed, or used under the immediate direction of 
another individual. A person other than an individual that uses one 
or more of its own employees to conduct an investigation that it has 
initiated is a sponsor, not a sponsor-investigator, and the 
employees are investigators.
    Sponsor-investigator--An individual who both initiates and 
actually conducts, alone or with others, an investigation, that is, 
under whose immediate direction the investigational device is 
administered, dispensed, or used. The term does not include any 
person other than an individual. The obligations of a sponsor-
investigator under this part include those of an investigator and 
those of a sponsor.

    9. Medtronic observes that under these FDA classifications, a wide-
range of entities, including device manufacturers, act as sponsors and 
sponsor-investigators of clinical trials and engage in real-world 
patient testing, but that these entities do not always meet the more 
limited definition of a ``health care facility'' under the Commission's 
rules. Thus, Medtronic argues, a ``significant portion'' of these 
entities are not eligible to apply for a medical testing license. These 
entities, it claims, will be subject to testing limitations and added 
costs and burdens by having to design their tests to comply with the 
Commission's other experimental authorization rules (or not be able to 
conduct them in a manner that provides the most utility for device 
evaluation purposes). Medtronic asserts that the Commission's licensing 
structure is inconsistent with FDA regulations that permit a wider 
variety of entities to sponsor or conduct clinical trial testing, and 
creates regulatory uncertainty, does not meet the development and 
testing needs of the medical community, and threatens to frustrate the 
very innovation that this proceeding is intended to promote. Medtronic 
also asserts that the new program experimental license (program 
license) is inappropriate for medical testing because that license does 
not unreservedly cover clinical trials. Medtronic therefore recommends 
that the Commission extend the eligibility for medical testing licenses 
to FDA sponsors and sponsor-investigators of clinical trials involving 
the testing and operation of new medical devices.
    10. Medtronic argues that expanding the eligibility to device 
manufacturers would level the playing field under the rules since the 
line between device manufacturers and health care facilities is 
blurring as healthcare providers are among those who develop medical 
devices. More specifically, given this overlap between the two with 
respect to their involvement in developing such devices, Medtronic 
argues that the following two disparities in regulatory treatment 
unfairly skew the playing field: (1) Medical testing licensees can 
operate on frequency bands restricted under Sec.  15.205(a) if the 
device being tested complies with rules in part 18, part 95, Subpart H 
(Wireless Medical Telemetry Service), or part 95, Subpart I (Medical 
Device Radiocommunication Service), but program and conventional 
experimental licensees cannot; and (2) medical testing licensees can 
conduct clinical trials outside the physical facilities under their 
control, but program licensees cannot.
    11. The Commission addresses separately in a Further Notice of 
Proposed Rulemaking released simultaneously with this MO&O, whether it 
should permit program licensees to experiment on frequency bands 
restricted under Sec.  15.205(a), if the device being tested is 
designed to comply with all applicable service rules in part 18 
(Industrial, Scientific, and Medical Equipment), part 95 (Personal 
Radio Services), Subpart H (Wireless Medical Telemetry Service), or 
part 95, Subpart I (Medical Device Radiocommunication Service).
    12. After careful consideration, the Commission finds good reason 
to deny Medtronic's request. In the R&O, the Commission recognized the 
importance of its experimental licensing program to the development of 
RF-based medical devices, and its rules provide a variety of 
authorizations under which medical device experimentation and clinical 
trials can be conducted, including program licenses, conventional 
licenses for market trials, and medical testing licenses. The 
Commission limited the eligibility and scope of a medical testing 
license to hospitals and health care institutions to address their 
particular needs in conducting multiple clinical trials, both within 
their institutions and at defined geographic areas beyond their 
facilities that will be monitored by the licensee. This license allows 
a health care institution to assess patient compatibility and use, as 
well as operational, interference, and RF immunity issues in real use 
settings. To accomplish this objective, the medical testing license has 
elements similar to program licenses and to market trial licenses. As 
with program licenses, a medical testing licensee can conduct multiple 
unrelated experiments at its own facility that is under its control. As 
with market trials, the medical testing licensee can request permission 
to conduct clinical trials at other specified locations that it 
monitors. The Commission envisions, for example, that a medical testing 
license would be helpful to those health care institutions when RF-
based medical devices used in clinical trials would be operated

[[Page 52411]]

primarily within the institution by hospital staff who can observe how 
those devices perform in the presence of other RF equipment. In the 
R&O, the Commission recognized that, although a health care facility 
could oversee a clinical trial beyond its facility, it may not want to 
assume this responsibility in some cases and instead may prefer that 
the device manufacturer or health practitioner, under a conventional or 
market trial license, assume responsibility for clinical trials outside 
the health care facility.
    13. The Commission concludes that if it were to expand eligibility 
for a medical testing licensee to align with the FDA's regulations, it 
would undermine the Commission's ability to meet its own objectives. 
Each agency's rules are designed to satisfy different purposes. The 
Commission's primary concern in authorizing experimentation with RF 
devices is to ensure that the devices do not cause harmful interference 
to authorized users of the spectrum and that the devices do not enter 
into commerce prior to Commission certification. A part 5 licensee is 
the party that the Commission holds responsible for the proper 
operation of the experimental RF devices to avoid harmful interference 
to authorized spectrum users and to take corrective action as 
necessary. A part 5 license also specifies the locations for 
experimentation, e.g., a conventional license would specify the 
locations where the licensee is conducting experimentation, and a 
program license limits operation to locations directly under the 
licensee's control. The FDA's Investigational Device Exemption (IDE) 
rules cited by Medtronic are designed for a different purpose--to 
determine the safety or effectiveness of a medical device. To 
accomplish this objective, the FDA's regulations allow for different 
categories of participation in clinical trials (e.g., sponsors who 
initiate, investigators who conduct trials, and sponsor-investigators 
who take on both roles). A sponsor does not necessarily conduct the 
investigation, and thus would not be directly responsible for the 
operation of the experimental RF-based devices as intended by the 
Commission's part 5 rules. Numerous investigators may conduct the 
clinical trials, often at a variety of locations which are not required 
to be, and most likely are not, under the sponsor's control. The 
Commission is concerned that allowing an FDA sponsor or sponsor-
investigator to hold a medical testing experimental license would 
create confusion in determining who is responsible for the proper 
operation of the experimental RF devices to avoid harmful interference 
to other spectrum users and to take corrective action as necessary. 
Also, trials may be conducted by multiple investigators who are not 
licensees at many different locations that would not be under the 
licensee's control. This would be contrary to the basic principles 
underlying the experimental licensing program. The Commission 
emphasizes that any health care facility that wishes to be eligible for 
grant of a medical testing license must meet all eligibility 
requirements contained in its rules, including the requisite RF 
expertise.
    14. The Commission finds it better serves the public interest to 
maintain the structure that it adopted, wherein a medical testing 
license is available only to a qualified health care facility that is 
solely responsible for clinical trials within its institution. The key 
element here is that the licensee controls the facility--and hence the 
interference environment--where multiple clinical trials are being 
conducted. The medical testing license is designed to address the 
particular needs of health care institutions in conducting multiple 
clinical trials within its institution under real use conditions, 
whether the RF-based medical devices being tested are manufactured by 
themselves or other manufacturers. To expand eligibility for this 
license to any manufacturer of medical devices, the Commission would 
have to identify the real-property facilities that they control and 
where clinical trials would be conducted. It seems unlikely that a 
manufacturer would conduct clinical trials at its manufacturing 
facility if this does not provide real use conditions. Moreover, 
Medtronic does not ask to conduct clinical trials at its own facilities 
but rather to conduct such trials at multiple other locations as 
approved under FDA rules on a trial-by-trial basis. This is 
fundamentally different than how the medical testing license is 
intended to operate.
    15. In declining to modify the rules as requested by Medtronic, the 
Commission notes that the part 5 rules provide other options for 
conducting clinical trials that other entities, such as sponsors, 
investigators and medical device manufacturers, can use. First, 
entities may evaluate product performance of an experimental wireless 
medical device under a market trial by obtaining a conventional 
experimental license. Typically, market trials are conducted prior to 
the production stage to evaluate product performance and customer 
acceptability under expected use conditions. As with medical testing 
licenses, market trials are authorized for devices that are designed to 
comply with existing Commission rules. However, unlike a regular 
conventional experimental license, a market trial license can be used 
to conduct clinical trials in locations not under the licensee's direct 
control, such as at a patient's home. Second, for instances where a 
party is developing a device that would not be able to be operated in 
compliance with existing rules, the Commission envisioned that such 
devices can be tested under a conventional experimental license. In 
summary, manufacturers of medical devices, whether associated with a 
health care facility or not, would have similar opportunities for 
experimenting with such devices even though they may do so under 
different types of authorizations. Both health care institutions that 
qualify for a medical testing license and device manufacturers that do 
not must obtain either a program or conventional experimental license 
to conduct basic research and experimentation. Device manufacturers 
that do not qualify for a medical testing license would need to obtain 
a market trial license to conduct clinical trials, which provides more 
flexibility than a medical testing license for specifying the area(s) 
within which the trial will be conducted. Health care facilities that 
qualify for a medical testing license could conduct clinical trials 
under either a medical testing license or a market trial license. Under 
the medical testing license, the licensee is limited to areas close to 
the licensee's own facility, and if it wants to conduct a clinical 
trial in a location not specified in its license, it would do so under 
a market trial license.
    16. Also, as acknowledged by Medtronic, the Commission may declare 
a specific geographic area an innovation zone for the purpose of 
conducting a clinical trial. Such a declaration, which could be made on 
the Commission's own motion or in response to a public request--such as 
from a health care facility lacking the RF expertise necessary for 
obtaining a medical testing licensee--would permit the Commission to 
designate a defined geographic area and frequency range(s) for specific 
types of experiments by program licensees within guidelines that the 
Commission may establish on a case-by-case basis. These innovation 
zones can include geographic areas beyond a program licensee's 
authorized area without the licensee having to apply for a new license 
to cover a new location. Thus, they can serve to effectively extend a 
program license

[[Page 52412]]

without the licensee being required to modify its license to cover a 
new location. Accordingly, innovation zones will provide opportunities 
for program licensees, including FDA sponsors and sponsor-
investigators, to test potentially innovative wireless devices in real 
world operating environments, such as testing medical devices in health 
care institutions. In the R&O, the Commission stated that this approach 
``may be particularly useful for manufacturers who want to test medical 
or other types of equipment that will be used in a health care setting 
while it is in the product development stage, but who will not be 
eligible for the medical testing license. A manufacturer of medical 
devices would be able to continue its product testing for clinical 
trials under its program license at a designated innovation zone 
without having to apply for a separate market trial license.''
    17. As the Commission concluded in the R&O, the different licensing 
options represent a multi-faceted approach to facilitate robust medical 
RF experimentation that responds to the record developed in this 
proceeding. The medical testing experimental license complements the 
types of medical RF experimentation that parties will be able to 
conduct under a conventional, program, or market trial experimental 
license. Accordingly, the Commission discovered that limiting 
eligibility for a medical testing license to hospitals and health care 
facilities is not detrimental to medical innovation and product 
development. The Commission's goal in this proceeding is to facilitate 
bringing ground-breaking new technologies and services to consumers 
more rapidly, and it finds that its current rules provide the proper 
incentives toward achieving that goal to both FDA-approved sponsors/
sponsor-investigators and to health care facilities. Accordingly, the 
Commission denies Medtronic's request to expand the eligibility for the 
medical testing license at this time. As licensees take advantage of 
the new flexible licenses, the Commission will gain valuable insight as 
to whether it could modify the rules in the future without sacrificing 
its objective of ensuring that each clinical trial is conducted in a 
way that minimizes the potential for harmful interference to authorized 
services.
    18. Cost reimbursement for clinical trials. The second issue raised 
by Medtronic pertains to cost reimbursement for clinical trials of 
experimental medical devices. Medtronic explains that, while 
manufacturers of medical devices are not permitted by the FDA to profit 
from clinical trials, they are allowed to recover certain 
manufacturing, research, development and handling costs associated with 
FDA-defined ``investigational devices.'' Medtronic further states that 
the FDA typically allows sponsors to charge investigators for such 
devices, and that the costs are usually passed on to the clinical trial 
subjects. The FDA rules permit a sponsor or investigator to charge 
subjects for an investigational device, but those entities may not 
commercialize that device by charging a price larger than that 
necessary to recover the costs of manufacture, research, development, 
and handling. Medtronic requests that the Commission clarify that such 
reimbursement does not constitute impermissible marketing under 
Sec. Sec.  2.803 or 2.805 of its rules. Medtronic argues that the 
requested clarification will ensure consistency between the regulatory 
regimes of the Commission and the FDA, simplify manufacturers' 
compliance, and encourage medical device testing and innovation. 
Medtronic maintains that the purposes of FDA's cost recovery mechanism 
align with the Commission's marketing restrictions, and that permitting 
cost recovery in clinical trials will encourage medical device research 
and development that will ultimately benefit consumers.
    19. The Commission's rules generally prohibit the operation and 
marketing of RF products prior to equipment authorization except under 
certain specified conditions. Sec.  2.805 (``Operation of radio 
frequency devices prior to equipment authorization'') lists conditions 
under which RF devices may be operated prior to equipment 
authorization, including operation under an experimental radio license 
issued under part 5 of the rules, and states that an RF device that may 
be operated prior to equipment authorization ``may not be marketed (as 
defined in Sec.  2.803(a)) except as provided elsewhere in this 
chapter.'' Sec.  2.803 (``Marketing of radio frequency products prior 
to equipment authorization'') defines marketing as ``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.'' These restrictions on 
marketing are intended to prevent the unchecked dissemination of 
experimental devices into the stream of commerce, where they may not 
always be easily recalled. The Commission concludes here that accepting 
reimbursement payments under the FDA's rules for the use of an 
unauthorized RF device in a clinical trial falls within this definition 
of ``marketing.'' However, Sec.  2.803 includes a number of exceptions 
to the general prohibition against marketing unauthorized equipment. 
One of those exceptions is for market trials conducted under a part 5 
experimental license. Accordingly, and, as explained below, the 
Commission clarifies that the marketing advocated by Medtronic is 
permitted on a limited basis under the Sec.  2.803 exception for market 
trials conducted by part 5 experimental licensees.
    20. In the R&O, the Commission modified its part 5 rules to provide 
more flexibility for market trials, including some forms of cost 
recovery, while continuing to provide safeguards to protect the public. 
Section 5.602 (``Market Trials'') permits marketing of devices (as 
defined in Sec.  2.803) and provision of services for hire prior to 
equipment authorization, provided that the devices included in the 
market trial are authorized under this rule section and will be 
operated under the current rules; could be authorized under waivers of 
such rules that are in effect at the time of marketing; or could be 
authorized under rules that have been adopted by the Commission, but 
that have not yet become effective. The rule stipulates that the 
experimental licensee must own all transmitting and/or receiving 
equipment, but also permits the experimental licensee to: (1) Sell 
equipment to other licensees (e.g. manufacturer to licensed service 
provider), and (2) lease equipment to trial participants for purposes 
of the study. Equipment must be retrieved or rendered inoperable after 
the trial.
    21. The Commission finds that, for devices that necessitate an 
experimental license for the conduct of a clinical trial, the market 
trial rule allows for some cost recovery for investigational devices 
used in those trials consistent with the Commission's purpose to 
prevent the unchecked dissemination of experimental devices into the 
stream of commerce. While the Commission's market trial rules differ 
from the FDA rules, they do provide manufacturers of experimental 
medical devices a mechanism for offsetting costs associated with the 
development of those devices. For example, FDA rules allow sponsors to 
charge investigators for medical devices and these costs may be passed 
on to the clinical trial participants, and a part 5 market trial 
licensee may sell devices to another licensee (e.g., a health care 
facility that is a medical testing licensee) or lease medical devices 
to trial participants, which may permit full or partial cost

[[Page 52413]]

recovery. The Commission believes that this structure generally 
accommodates Medtronic's request, and serves the public interest by 
providing medical device manufacturers an incentive to develop 
innovative, but potentially costly, devices for use in clinical trials.
    22. The Commission also observes that not all clinical trials occur 
under part 5 experimental rules. The Commission's experience has been 
that clinical trials, especially those involving implanted devices 
which cannot be easily returned to the licensee as the rules require, 
occur after the FCC has issued an equipment authorization grant for the 
device. In those cases, there is no FCC marketing restriction that 
conflicts with FDA rules.
    23. The Commission also clarifies that a medical testing licensee 
conducting clinical trials that wants to seek reimbursement under the 
FDA's rules should follow the requirements for market trials in Sec.  
5.602. In establishing the medical testing license, the Commission 
observed that the license will allow for ``clinical trials of medical 
devices that have already passed through the early developmental stage 
and are ready to be assessed for patient compatibility and use, as well 
as operational, interference, and RF immunity issues in real world 
situations.'' This is conceptually analogous to a market trial, which 
``com[es] later in the development process'' and is a ``program 
designed to evaluate product performance and customer acceptability 
prior to the production stage.'' Also, both medical testing licenses 
and market trials licenses are used for devices that will be operated 
under the current rules; could be authorized under waivers of such 
rules that are in effect at the time of marketing; or could be 
authorized under rules that have been adopted by the Commission, but 
that have not yet become effective. In the R&O the Commission stated 
that it would require a market trial to be authorized under a 
conventional, rather than a program, license ``in recognition of the 
inherent difference between market trials and `regular' experimentation 
and testing--the most prominent difference being the necessity to 
prevent an experimental licensee from creating a de facto service 
through the experimental licensing process.'' As discussed above, 
clinical trials are analogous to market trials, and should be treated 
like market trials for cost recovery purposes by the experimental 
license rules. Accordingly, the Commission modifies Sec.  5.402 to make 
clear that medical testing licensees may recover their costs to the 
extent they are permitted by the market trial rule.
    24. The Commission also clarifies that, under a conventional 
license issued for a product development trial, a licensee conducting a 
clinical trial could not be reimbursed for its costs, and the 
Commission takes this opportunity to correct a contradiction in its 
current rules regarding product development trials. Although Sec.  
2.803 exempts product development trials from the marketing rule for 
equipment operated prior to certification, the product development 
trial rule (Sec.  5.601) expressly prohibits marketing of devices as 
defined in Sec.  2.803 or the provision of services for hire. This 
prohibition in the rule is consistent with the Commission's statement 
in the R&O that licensees conducting a product development trial must 
not market devices or offer services for hire. The Commission 
differentiated product development trials, which occur very early in 
the development process, from market trials for marketing purposes. 
Market trials, which occur later in the development process, can engage 
in marketing activity if they use equipment that could be operated 
under the current rules; could be authorized under waivers of such 
rules that are in effect at the time of marketing; or could be 
authorized under rules that have been adopted by the Commission, but 
that have not yet become effective. Product development trials have no 
such restrictions and thus restricting marketing is important to 
prevent the unchecked dissemination of experimental devices into the 
stream of commerce. Clearly, the Commission's intent was to prohibit 
marketing for product development trials and erred in its drafting of 
the marketing exceptions in Sec.  2.803. Accordingly, the Commission 
herein corrects Sec.  2.803(c)(1) to refer only to market trials and 
remove the reference to product development trials. Thus, the 
Commission notes that reimbursement under the FDA's rules for clinical 
trials would not be permitted for a product development trial.
    25. Thus, the Commission concludes that Medtronic's requests are 
best accommodated under the existing rules. To the extent that cost 
recovery for medical devices used in clinical trials is done under the 
market trial rules set forth in Sec.  5.602, the Commission grants 
Medtronic's request and clarifies that such cost recovery does not 
constitute impermissible marketing under Sec. Sec.  2.803 and 2.805 of 
its rules.

Sirius XM and EchoStar Petition

    26. In their petition, Sirius XM and EchoStar request that the 
Commission add a definition of ``emergency notifications'' to its rules 
to clarify that all participants in the Emergency Alert System are 
emergency notification providers, and are therefore entitled to 
notification of program experiments that might affect them, as well as 
protection from harmful interference that such experiments might cause 
to them. The R&O specified that for program license experiments that 
may affect critical service bands (i.e. bands used for the provision of 
commercial mobile services, emergency notifications, or public safety 
purposes), the program licensee must take the additional steps of 
developing a specific plan to avoid causing harmful interference to 
operations in those bands prior to commencing operations and providing 
notice to those critical service licensees who might be affected by the 
planned experiment.
    27. Sirius XM and EchoStar observe that the NPRM explicitly 
recognized that EAS participants provide emergency notifications, and 
that the R&O required that any program licensee seeking to undertake an 
experiment in a band used for emergency notifications must develop a 
plan to avoid interference to emergency notification providers, but 
that the R&O failed to specify that such providers include all EAS 
participants. Sirius XM and EchoStar contend that this failure will 
create confusion on the part of program license applicants and 
undermine the Commission's goal of avoiding interference threats to the 
EAS network. Therefore, to avoid the possibility that program licensees 
may fail to notify EAS participants of their planned experiments or 
cause harmful interference to EAS participants, Sirius XM and EchoStar 
recommend that the Commission set forth a definition of emergency 
notification providers that includes all EAS participants. No party 
filed comments regarding the Sirius XM/EchoStar Petition.
    28. The Commission's goal throughout this proceeding has been to 
foster new experimental uses of the RF spectrum, while protecting 
authorized radio services from any harmful interference that these new 
uses might cause. Moreover, the Commission has recognized that an 
additional measure of protection must be afforded to bands used by 
services that are crucial to the public safety and well-being. The 
Commission's clear intent in this proceeding has been to include all 
EAS participants as emergency notification providers. For example, the 
Commission included this discussion in the NPRM: ``. . . Television and 
radio broadcast bands are used in support of the

[[Page 52414]]

Emergency Alert System (EAS). In recognition of these vital interests, 
the Commission proposes to require that, for tests that affect bands 
use for the provision of commercial mobile services, emergency 
notifications, or public safety purposes on the institution's grounds, 
the licensee first develop a specific plan that avoids interference to 
these bands.'' As Sirius XM and EchoStar observe, the R&O adopted the 
NPRM's proposal that the program licensee must develop a specific plan 
to avoid harmful interference to operations in these critical service 
bands, but failed to explicitly state that emergency notification 
providers include all EAS participants. Accordingly, and to avoid any 
confusion, the Commission is adding to Sec.  5.5 of the rules a 
definition of emergency notification providers as inclusive of all EAS 
participants.
    29. Regulatory Flexibility Certification. The Regulatory 
Flexibility Act (RFA) requires that agencies prepare a regulatory 
flexibility analysis for notice-and-comment rulemaking proceedings, 
unless the agency certifies that ``the rule will not have a significant 
economic impact on a substantial number of small entities.'' The 
Commission hereby certifies that the rule revisions set forth herein 
will not have a significant economic impact on a substantial number of 
small entities for the following reasons: (1) The modification of Sec.  
5.85(a) essentially restores that rule to what existed prior to 
initiation of this proceeding, but with the further modification that 
permits use of passive service bands by compliance testing licensees, 
as was explicitly authorized in the R&O. As explained above, the 
prohibitions adopted in the rules appendix of the R&O was over-
inclusive--the stated intent in this proceeding was to prohibit 
experimental use of the passive bands only by program and medical 
testing licensees and in product development and market trials. 
Restoring the rule to allow for the grant of conventional experimental 
licenses that use the passive bands, which had been permitted for many 
years prior to adoption of the R&O, as well as permitting use of these 
bands by new compliance testing licensees, will not have an adverse 
impact on any small entities. (2) Denying FDA sponsors and sponsor-
investigators eligibility for medical testing licenses in Sec.  5.402 
of the Commission's rules will not adversely impact small entities, as 
they will still have the ability to conduct clinical medical trials 
under the auspices of a product development trial, or under a program 
license in cases in which the Commission establishes an innovation zone 
for a clinical trial. (3) Clarifying that some cost reimbursement for 
medical devices used in clinical trials is permissible under the Sec.  
5.602 market trial rules may benefit some small entities, without 
adversely impacting any such entities. (4) Clarifying in Sec.  5.5 of 
the rules that all participants in the Emergency Alert System are 
emergency notification providers simply codifies what was adopted in 
the R&O, and will not adversely impact any small entities. The 
Commission will send a copy of this Memorandum Opinion and Order, 
including this certification, to the Chief Counsel for Advocacy of the 
Small Business Administration.
    30. Paperwork Reduction Act Analysis. This document contains no new 
or modified information collection requirement that are subject to the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. The 
Commission notes that pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), it 
previously sought specific comment on how it might further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.
    31. Congressional Review Act. The Commission will send a copy of 
this Memorandum Opinion and Order in a report to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act, see 5 U.S.C. 801(a)(1)(A).

Ordering Clauses

    32. Pursuant to section 4(i), 301, 303 and 405 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 301, 303, and 
405 and Sec.  1.1, 1.2, and 1.429 of the Commission's rules, 47 CFR 
1.1, 1.2, and 1.429, this Memorandum Opinion and Order is adopted.
    33. The petitions for reconsideration filed by Marcus Spectrum 
Solutions LLC; Medtronic, Inc.; and Sirius XM Radio Inc. and EchoStar 
Technologies Inc. Are granted, to the extent indicated above, and 
otherwise are denied.
    34. Parts 2 and 5 of the Commission's rules are amended, as set 
forth in the Final Rules. These revisions will be effective September 
30, 2015 of this Memorandum Opinion and Order.

List of Subject in 47 CFR Part 5

    Radio, Reporting and recordkeeping requirements.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 2 and 5 as follows:

PART 2--FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL 
RULES AND REGULATIONS

0
1. The authority citation for part 2 continues to read as follows:

    Authority:  47 U.S.C. 154, 302a, 303, and 336, unless otherwise 
noted.


0
2. Section 2.803 is amended by revising paragraph (c)(1) to read as 
follows:


Sec.  2.803  Marketing of radio frequency devices prior to equipment 
authorization.

* * * * *
    (c) * * *
    (1) Activities under market trials conducted pursuant to subpart H 
of part 5.
* * * * *

PART 5--EXPERIMENTAL RADIO SERVICE

0
3. The authority citation for part 5 continues to read as follows:

    Authority:  Secs. 4, 302, 303, 307, 336 48 Stat. 1066, 1082, as 
amended; 47 U.S.C. 154, 302, 303, 307, 336. Interpret or apply sec. 
301, 48 Stat. 1081, as amended; 47 U.S.C. 301.


0
4. Section 5.5 is amended by adding a definition in alphabetical for 
``emergency notification providers'' to read as follows:


Sec.  5.5  Definition of terms.

* * * * *
    Emergency notification providers. All participants in the Emergency 
Alert System, as identified in section 11.1 of this chapter.
* * * * *

0
5. Section 5.85 is amended by revising paragraph (a) to read as 
follows:


Sec.  5.85  Frequencies and policy governing their assignment.

    (a)(1) Stations operating in the Experimental Radio Service may be 
authorized to use any Federal or non-Federal frequency designated in 
the Table of Frequency Allocations set forth in part 2 of this chapter, 
provided that the need for the frequency requested is fully justified 
by the applicant. Stations authorized under Subparts E and F are 
subject to additional restrictions.

[[Page 52415]]

    (2) Applications to use any frequency or frequency band exclusively 
allocated to the passive services (including the radio astronomy 
service) must include an explicit justification of why nearby bands 
that have non-passive allocations are not adequate for the experiment. 
Such applications must also state that the applicant acknowledges that 
long term or multiple location use of passive bands is not possible and 
that the applicant intends to transition any long-term use to a band 
with appropriate allocations.
* * * * *

0
6. Section 5.402 is amended by adding paragraph (c) to read as follows:


Sec.  5.402  Eligibility and usage.

* * * * *
    (c) Marketing of devices (as defined in Sec.  2.803(a) of this 
chapter) is permitted under this license as provided in Sec.  5.602.

[FR Doc. 2015-21295 Filed 8-28-15; 8:45 am]
 BILLING CODE 6712-01-P