Game Changer: FCC Rules on Wireless

Government Declares Some Wireless Products Illegal After June 12

“May I see your license and registration please?”

Cops say that dreaded phrase everyday – but could a representative of a telecommunication giant say it to someone using a wireless mic?

It’s no longer that far-fetched of a scenario. That thousands of wireless products sold over the last decade are going to be illegal to operate is already a reality. More stringent licensing regulations are the immediate future.

On January 20, the Federal Communication Commission (FCC) issued a new rule that anyone who uses a wireless microphone that operates in the 700 Mega Hertz Band will have to stop operating their wireless microphone no later than June 12, 2010. Most industry insiders saw that coming.

But what the FCC is going to do next could be critical to the MI industry. The laws of licensing these products will no longer be ignored, and now they are figuring out a formula for who is worthy of a license. It’s a mad scramble for spectrum space, and it’s made more complex by a controversial move by the government agency to sell some of the space where wireless products once flourished unabated to the computer and telecommunications industry which will be used by the next generation of Personal Digital Assistants (PDA).

“Ultimately the FCC is in charge of managing the public airwaves, and that they’ve gone and sold it and pocketed the money seems extreme,” says ATK’s Scott Harmala. “Is it even legal? It’s supposed to be the public’s.”

“Some economist worked out a way to sell air space, which nobody owns, but the government says they do,” says Chicago area MI retailer Gary Gand. “What’s next? Trying to sell is sunlight?”

FOH Magazine editor Bill Evans says he knows of many small and medium-size audio companies who have simply stopped buying wireless products. “And there’s real anger out there – I had one guy tell me the next time a politician needs a wireless mic for an event, he’s going to charge him $10,000.”

As for those products that use the 700 MHz spectrum, they have a mere few months to replace it. “I can’t remember a time when the government mandated people to buy something,” says Shure’s Chris Lyons.

“Worse case scenario, I see a customer that has been living in a cave for the last three years and didn’t hear he needs to check the frequency on his system,” says Sennheiser’s Joe Ciaudelli. “Then come August or September it stops working on them, long after the rebate programs we’ve been offering have ended.”

“We’re going to get yelled at,” Lyons, Shure’s Manager, Technical & Educational Communications, adds. “Those of us who make these things, and the retailers who sell them, we’re going to get blamed for this. Even facilities who want to comply won’t have the budget to do so by June.”

“It’s a big fish versus little fish situation,” says Fenton, Mo. retailer Greg Maglione of Tower Music. “We took it on the chin, and in my opinion it’s not right.”

Illegal Beginnings, Licensing Issues

To many, the difference between a guitarist who likes to plug into the amp and one who prefers a wireless set up is just personal preference. But the latter is actually “broadcasting” that smokin’ guitar riff over the air. This makes him a “squatter” – operating between the frequencies that television stations used to broadcast television programs. But with the completion of the digital television (DTV) transition on June 12, 2009, television stations no longer use the frequencies between 698 and 806 MHz (the 700 MHz Band) for broadcast, the area that had coexisted with wireless products for years. No harm, no foul – but officially illegal.

“When discussing the issue of not being able to legally use 700 MHz band wireless, you have to ask the question: How many folks in the room drive at or below the speed limit?” states Gand, who also has a pro audio rental company.

While there are plenty who agree with that perspective, it’s now a moot point. The FCC is saying that some of that space is going to be given to public safety entities (such as police, fire and emergency services). But mostly, it’s being sold to commercial providers of wireless services (Verizon, AT&T, Google, et cetera).

“The announcement of closing the 700 MHz band revived the need for the licensing. We said, fine – how are you going to do that? And the short answer is, they don’t know!” Lyons laughs. “They are making this up as they go!”

Ciaudelli, Sennheiser’s director of market development and education, says that most of the lower-powered gear, “should be okay and will be perfectly adequate for the church, school, or club… then again, there will be no legal recourse if they experience interference from white space devices.”

Lyons expressed sympathy for the FCC’s position. “They are between a rock and a hard place. They want to protect people who use a wireless mic, but where do they draw the line?” Here’s a nightmare scenario: Company X in town for the Y Trade Show held at the Z Convention Center. They rent wireless mics from Abe’s Music and hire Bob to sit in the back and run the board. Who needs the license? The company, the trade show organization, the convention center, the music store, or the audio engineer? “The FCC doesn’t know and is trying to figure that out.”

And there are more challenges: Historically, the FCC has looked at the activity – are you a broadcaster? Okay, that’s radio or TV stations. But what’s that mean in today’s brave new world? The minister streams live the sermon over the Internet, the local punk band does a podcast … are they broadcasters?

700 MHz Dead, But Not Gone

The sale of the 700 MHz raised a reported $19.59 billion for the FCC, with Verizon leading the check-writing pack spending $9.63 billion, and AT&T spending $6.64 billion. There’s unconfirmed reports that Verizon already has people out in the field with scanners, and when they find people operating in that 700 MHz spectrum, are hitting them with cease and desist letters, Evan says.

“We’ve been notifying customers since 2007 that the day of operating wireless in 700 MHz would be prohibitive,” Ciaudelli says. Sennheiser has also stopped shipping 700 MHz products in North America years ago. (But they are still making them, as they are still used in other countries.)

Harmala, CTO/VP engineering of ATK Audiotek, has been involved with the issue since at least 2007, and “we figured we’d be asked to leave at some point, but we started asking what their plan was – for years they just replied, ‘We don’t know yet.’” Then all of sudden, August of 2009, it was announced that wireless mics were going to no longer be allowed in that spectrum. After years of dragging on, there was shock in the industry that it was happening so soon.”

But then it didn’t – a national election and a switch at the top of the FCC was followed by yet another re-education process of members of the MI industry going to Washington to explain its importance. Luckily, Lyons says, there weren’t too many changes at the Office of Engineering Technology (OET), which is the engineering arm of the FCC.

Shure started moving away from 700 MHz products in 2001. But their “add more features, move it to a lower band” process didn’t complete until 2007. Others did the same. Weekend Warriors and even regional music acts are either beating up their gear and/or wanting the latest/greatest anyway, so switching out the every three or four years is naturally occurring. At the very least, they are likely reading magazines and hanging out at the local music store enough to have heard of this potential problem.

But the microphone industry is a victim of it’s own success. The “problem” is many of these products last a long time.

“It’s a bigger deal than people realize,” says Malione. “In my case, a lot of these mics are going to churches, and you try to give them a head’s up so they can make the changes. With installs, the equipment really doesn’t get beat up, and if you’re a church or a school, and you make an investment of $10,000, $15,000 into a sound system, you expect it to last for at least a decade, not four years.”

Education and Rebates

Lyons points out that the FCC was founded to protect the sound spectrum so to “deliver the most benefit to the most people.” The powers that be looked at the number of people using wireless mics versus the number using wireless Internet-related products. At first glance, the latter is a goliath to the former. “But then [the industry] pointed out, who is really benefiting?” It’s not just Bono benefiting from wireless gear; it’s the tens of thousands who attend a U2 concert. It’s not just John Madden; it’s everyone who watches a Super Bowl.

Ciaudelli says the process has educated members of the FCC and politicians of how ubiquitous wireless mics have become. “They realize now that wireless mics are the tools that create the biggest entertainment content in the world, and there’s nothing else that the U.S. exports more than entertainment. I think when the FCC started this, they didn’t realize how important wireless [products] were.”

Harmala agrees: “We as an industry have a very small voice, and I think we’ve used it effectively. They didn’t understand the scale of it in the beginning. Now they do.”

“It’s been a difficult situation because the wireless products have not been recognized by the FCC,” he continues. “It’s not just the Grammy’s and touring rock acts, but churches, institutions, and businesses. The majority are non-technical end users. It’s the church secretaries who have been shown how to turn on a switch for speaker at the luncheon event. None of them understand that these are devices technically requiring licensing. Less than one percent of wireless products are licensed – less than 600 auxiliary transmission licenses. That’s a drop bucket compared to what is actually in use.

“Another problem is the huge amount of hardware out there that is still going to be used in spite of this. Few even know what a Megahertz is. They won’t know why it’s suddenly not working well, and assume it’s broke. Hopefully the retailer they buy their replacement system will know not to sell them another 700 system.”

The industry has united to not only educate the government, but to reach out to retailers and consumers. Sennheiser started back in 2007 telling their retailers that this day would come. “We sent out information directly to them and the customers we knew of, did email blasts, and had an advertorial campaign running in several publications,” Ciaudelli says. “It’s important that retailers do know that the FCC is requiring a consumer alert on all wireless products, which means that most are unlicensed devices that must adhere to certain restrictions. It’s also important that when they print out a catalog, advertise wireless products, promote a wireless on their Web site, et cetera, that they include this consumer alert.” In a cooperative effort, seven wireless product manufacturers have joined to create a point of sale display that retailers can place near their wireless products.

“It’s difficult reaching people,” Lyons admits. “We sell to dealers, and then the dealers sell to the houses of worship or the band director or whatever. It’s not like we get back cards to tell us who a certain mic was sold to.” In fact, during congressional testimony, when the FCC asked how many of wireless units were in use, the wireless industry had to give an honest “We don’t know.” “When something is sold, we don’t know if it’s a replacement or someone is expanding their system.”

“The industry has been good getting the word out to us, but I don’t know how it’s filtering out to the general public,” Malione says. “I read blogs [et cetera], but I don’t know the average consumer knows about it.” Malione is doing his part: He says every call he gets about anything else, he tries to educate his customer about it. “You can’t just give a serial number, and then you have to explain what 690/810 means.” He mentions he sold $10,000 worth of wireless Sony products to a house of worship a few years ago and they love it. Yet now they will have to replace it.

Most of the wireless manufacturers have some kind of rebate program up to $1,000 in place and all are going to extraordinary efforts to educate the dealers and the consumers about this situation. But they still won’t be completely successful. “The manufacturers are doing everything they can for the end users and the industry as a whole to move their hardware around,” says Lyons. “But it’s tough.”

“We’ve had a rebate in place for more than a year,” Ciaudelli says. He too thought the FCC deadline for this would happen long again, but when they announced the official deadline, they extended the rebate.

“The whole wireless rebate deal made our December,” Gand reports. “At the 11th hour, or Dec 29, many folks took the rebate hook and we sold a ton of gear. Of course in short order, they extended the deadline to June 2010, making us all look like opportunists. Now that we have scraped the egg off our collective faces, will it work again or will the buying public think its ‘just another bail-out?’ Ask me in July.”

“Believe me, no one is making money on this rebate program,” Ciaudelli says emphatically. “This is something we’re doing to support our customers.”

Lyon’s message to retailers: “Contact your list of clients – and if you’re smart, contact your competitor’s as well. It should be a ‘hey, just want to make sure you’re compliant. Let us come out and check.’”

The Future – Upside?

Harmala says the future of all this is a bit of a question mark. “Right now Google, Microsoft, Phillips, et cetera, can’t produce a device that can reliably work around wireless products,” he says. “It’s supposed to be smart technology, sniff frequencies being used, and move out of it.” But at what cost and how accurate, he wonders.

Evans is skeptical. “That the test of these white spaces devices on a football field was a total failure was ignored by the head of the commission at the time,” he says. His thought is products will still be usable, just less reliable. “As more consumer devices enter the space we’ll get more drop outs and interference. At some point, yes they are useless. But we can’t pinpoint when or where that happens. It is why the pro audio community is asking [the FCC] for eight frequencies per market area to be set aside for wireless mic use.

“I don’t think we are gonna get it.”

Harmala points out that from the pro audio standpoint, there’s always been interference. “We do most of the high-profile shows on T.V. from American Idol, Dancing with the Stars … we’ve done both Democratic and Republican conventions. Thirteen Super Bowls. There’s an unbelievable amount of interferences there, and we have always had to be agile with filtering and tricks that allow us some margin of security. It’s been like that for a long time, but now it’s going to be worse, especially in major markets.”

He says friend of the industry Congressman Bobby Rush (Ill) has put forth a bill that would expand what is defined as a “Broadcaster” – cable operators, film producers, TV producers, and TV broadcasters” – to include places like sports arenas, theaters including Broadway, et cetera, “places where it’s obvious they should have the right to have a semblance of protection.”

For the guys on the front lines, it’ll be an issue for years to come.

Malione points out that the large houses of worship usually have a paid professional audio engineer on staff, so they are most likely informed on the topic and aware of its seeming inevitability. “I think it’s more an issue for the small churches: The ones with the volunteer person who shows up and basically turns the system on, and the whole thing is only running three or four mics.”

Malione adds that he’s grateful that by “sheer luck” the fast majority of his wireless sales over the years have been with MiPro products, which have never had products in the spectrum in question.

“Folks with 700 MHz wireless gear will continue to use it, whether intentionally or by accident,” Gand says. “They may just be like the last soldiers who did not get the memo that the war is over and are still in the jungle fighting to this day.

“Now the good news for the retailer is we finally have a reason to force people to upgrade their old systems under threat of no longer working correctly when all of this new technology comes online,” Gand says. “The fact that nobody knows when and where it will strike makes the threat even more tantalizing, like going to a street bazaar in the Middle East.”

Evans tosses out another potential problem, and it’s one that is going to affect some retailers: eBay could be flooded with what looks like amazing deals on great wireless gear, only to have it snapped up by unsuspecting people unaware of the extremely limited shelf life it has.

For the manufacturers, it’ll be continued education, new innovations, and taking blame.

“We do get calls blaming up – and we say, believe me, we didn’t want this to happen!” Ciaudelli laughs. “But when we explain the situation, most people are very understanding and appreciative.”

For the pro user, dealing with this increasingly aggressive influx of challenges will require manufacturers to develop more resilient technology, says Harmala. He speculates that there might even be a whole new industries coming out of this. Perhaps someone will come up with a building material to keep interference out and effectively shield a club or theater from competing sound waves. “Maybe it’s part of the spray coat junk they put on to fire proof a building,” he muses.

“One thing for sure: The days of going back to being completed wired is not realistic. We want Lady Gag roaming around on stage. It’s all part of the experience.

“Wireless is here to stay, so it’s just a matter of solving these new problems.”

Retailer Wireless To-Do List

• Make sure there are no wireless products on your floor that operate in the 700 MHz spectrum. If there is any question, contact the manufacturer.
• Display the industry’s consumer alert to educate customers. Make sure that same alert is included in all ads, mailers, Web site, et cetera, you use to promote the wireless products.
• Go to the FCC’s webpage to make sure you’re clear on the issues: fcc.gov/cgb/wirelessmicophones.
• Understand the rebate policy of each wireless product you sell, the deadlines, and any and all conditions.
• Educate your staff on the issue, and anytime any former, current, and potential customer contacts your store about any P.A.-related issue, ask if they have wireless products and if they are aware of the new law.
• Go through your list of institutional clients (and maybe even your competitors), and see if they are aware of the new law. Offer to go to their facility and check it out for them.