FREQUENTLY ASKED QUESTIONS ABOUT THE FCC RULEMAKING PROCESS

Updated February 9th, 2022

What is Dahua’s response to the Federal Communication Commission’s proposed rules to prohibit future equipment authorization?

As we have stated publicly many times, we respect the right of governments to regulate domestic markets, and we comply as a matter of course with all applicable laws and regulations everywhere we do business.

However, we urge the FCC, and all of our company’s U.S. stakeholders, to recognize that our products and technology pose no threat to the U.S. network or to national security. We are not government owned or directed. Rather, we are a private-sector business, traded on the public markets that adheres to standards for ethical practices in our industry.

We look forward to presenting these facts to the FCC and hope that the Commission will keep an open mind as it embarks on what we expect will be a robust, deliberate process for considering this proposed rule.

What exactly has the FCC decided to do?

  • The FCC has voted to consider proposed rules relating to equipment authorizations for certain devices from certain companies that are on the U.S. Government’s “Covered List”.
  • The FCC has not enacted any new rules at this time – this is simply the start of a process which includes considering comments from the public about whether or not to implement a new rule.

Does this vote mean that Dahua no longer has FCC approvals?

  • Dahua’s products all remain authorized at this time.
  • All that has happened is that the FCC has decided to start a process to consider a rule that would deal with authorizations of products from companies on the Covered List.
  • At this time, nothing at all has changed in terms of our authorizations.

What does Dahua plan to do to ensure that it does not lose FCC approvals?

  • In September and October, 2021, we have filed a robust response to this proposal as part of the FCC rulemaking process. The FCC invites all parties to submit comments on proposed rules. Please go to the Commission’s Electronic Comment Filing System (Proceedings 21-232, 21-233) to view comments filed by all interested parties including Dahua’s comment letters (see 1st letter and 2nd letter).
  • In December 2021, Dahua’s representatives and our outside counsel met with FCC staff to present our understating on the FCC proposed rules and address FCC’s potential concerns. We have published two ex parte statements, which details the substance of our message to the FCC, you can also go to the Commission’s Electronic Comment Filing System (Proceedings 21-232, 21-233) to view our ex parte fillings (see the 1st filing and 2nd filing).
  • We will continue exploring all possible ways to continue engaging with the FCC and effectively address any potential concerns the Commission might have regarding our technology and products.

What is the timeline for a final vote?

  • The FCC itself does not set a hard timeline for these proceedings, which sometimes take many months or even years.
  • The FCC released the draft of proposed rules on August 19th Various stakeholders and interested parties including Dahua submitted comments on the proposed rules during the 60-day public comment period from August 20th2021 to October 18th 2021.
  • The FCC is now expected to take some time to digest those public comments it has received and meet with stakeholders to discuss the rulemaking and comments filed. Given the complexity of the issues in the proceedings, the number of substantive comments the FCC has received, alternative approaches proposed to address the supposed underlying issue, as well as widely shared concerns over the broader impact on the US economy, it is our view that a final ruling may take some time to be decided.
  • It is not uncommon for FCC rules to be the subject of litigation, which can further delay implementation.

What can a dealer do to place a comment to the FCC?

  • The FCC docket was open to comments from any party interested in making their views known from August 20th 2021 through October 18th, 2021. You may go to Commission’s Electronic Comment Filing System (Proceedings 21-232, 21-233) to view comments filed by all interested parties including Dahua’s comment letters (see 1st letter and 2nd letter).

What will be the final outcome if Dahua cannot get FCC approvals for new products?

  • We understand the concerns our partners have about this question, but right now we prefer not to speculate about a hypothetical.
  • Our focus is on making our case to the FCC and doing our part to make sure that any rule reflects the best interests of our customers, business partners and other US stakeholders, and most importantly an accurate and fair assessment of the facts.
  • We are confident that at the end of this process, we will be in a position to continue to operate in the U.S. and to serve our customers as we always have.

If the FCC rule is adopted, what will happen to Dahua products already in service in the U.S.?

  • The proposed rule that was released for comment would not affect products that were already authorized under the existing rules. Those authorizations would remain valid.
  • It is possible that the FCC might conduct further proceedings to consider revoking authorization of some previously approved products, but that step would require an additional public notice and a final FCC decision at some point in the future. Our customers and business partners would have ample advance notice if the FCC decided to go down this path.

What has Congress done that impacts the FCC process?

  • The Congress in October 2021 passed a bill titled the Secure Equipment Act, which directs the FCC to adopt within one year from the date the bill becomes law a rule that would prevent companies on the Covered List from securing authorizations for future applications. The act was signed into law on November 11th, 2021.
  • The law also states that the FCC may not, under this proceeding, revoke existing authorizations. Therefore, our existing products on the market retain their authorization, and all Dahua distributors and customers will be able to rely upon the existing authorizations that their products already have in place.
  • The FCC has one year as of November 11th, 2021 to adopt final rules on future authorizations. It is possible that the FCC may, in the interim, issue a public notice seeking comments on how the law impacts its proposed rule-making process (as it has done on occasion in the past), which could delay the timeline.
  • At any point in that process, the Secure Equipment Act itself could be subject to legal challenge.
  • Notably, Dahua’s comments to the FCC as well as other comments raise substantive questions about the constitutionality of denying a business the right to secure an FCC authorization without any due process or evidentiary proceeding. Should such a challenge take place, it could be additional months or years before the issue is resolved by the courts.

If the FCC rule is passed as proposed what are Dahua's plans for honoring warranties and continuing to provide support in the U.S.?

  • Regardless of how this process plays out, Dahua will continue to honor warranties and provide support for its customers in the U.S.

Is there any liability for an integrator selling Dahua products in the U.S.?

  • No. Dahua’s products all remain authorized at this time and therefore, there is no liability for an integrator selling Dahua products in the U.S.

What does this mean for buying Dahua equipment for new installations?

  • At this time, nothing at all has changed in terms of buying and selling Dahua’s authorized products. Business continues as usual.
  • All that has happened is that the FCC has decided to start a process to consider a rule that would deal with authorizations of products from companies on the Covered List.

If the proposed FCC rule is passed, what is the chance that it will be allowed to stand?

  • We prefer not to speculate about hypotheticals.
  • It is not uncommon for FCC rules to be challenged in courts, which could block or further delay implementation.