Great news! Your team has come up with a new radio technology—one that may have the same impact as Wi-Fi or Bluetooth. Management loves it, funding is in place, patent applications are filed, production is lined up, and marketing is ready to go. This will be huge.
Or maybe not. Your invention could be illegal in the United States. That's an enormous disadvantage in today's global marketplace.
How a new product could be in violation of the law is not hard to understand. Every radio transmitter sold in the United States must comply with technical rules maintained by the Federal Communications Commission (FCC). These rules set limits on power, bandwidth, out-of-band emissions, modulation, and sometimes other properties. They control interference, promote efficient spectrum use, and protect the public from excessive radio-frequency exposure.
These rules are needed, and they have teeth. It is a federal violation to import, sell, lease, offer, advertise, ship, or distribute a transmitter (or equipment that includes a transmitter) without first establishing FCC compliance. Nobody goes to jail, but violations can draw large fines. Worse, the FCC will order a noncompliant product off the market. For a start-up built around a single technology, a stop-marketing letter from the FCC can be fatal.
The technical rules that deal with mature products are relatively general. But the FCC tends to regulate newer technologies in much greater detail. The specifics in the rules act like a filter, letting through some kinds of products while blocking or delaying others. Such regulation can, naturally enough, create a barrier to innovation.
The contrast between Bluetooth and Wi-Fi provides a real-life example. Both are unlicensed radio technologies. Their current forms appeared in the late 1990s. They share the same frequency band and are regulated under the same section of FCC rules. The designers of Bluetooth stayed within the technical parameters of the relevant rule, and early Bluetooth products reached the market with no significant holdup from the FCC. But the same rule section delayed some forms of Wi-Fi. The 11-megabit-per-second b standard was approved when the FCC staff decided, after a vigorous internal debate, that it complied with the rule as written. Approval of the later, 54-Mb/s g standard needed a rule change that took two years. That new rule was more flexible, however, allowing the subsequent, much faster n standard to sail through with no fuss at all.
Not surprisingly, the FCC rules are organized around existing technologies. As a consequence, the more innovative a new radio product is, the less likely it is to comply. So, for example, approval of a conventional UHF walkie-talkie takes only a few days. But if the product rests on a novel and creative idea—think of spread spectrum in the 1980s, ultrawideband in the 1990s, TV-band "white space" devices in the 2000s—chances are that it won't reach the U.S. market until the FCC changes or waives the applicable rules.
The need for a rule change or a waiver would be no big deal if it happened quickly. It doesn't. Changes to accommodate new technologies take at least two to three years, and in some cases drag on for four or five years. Amending just one number in a rule can be as slow as adding a whole new category of rules. Even waivers, which are procedurally simpler, need a year or two, sometimes more.
Why does it take so long?