The Federal Communications Commission is preparing to use its new authority to retroactively ban gadgets that have already received federal approval to be sold in the United States. The agency is targeting companies it suspects of helping the Chinese drone manufacturer DJI bypass existing import restrictions by using “front companies.” The FCC plans to stop these specific entities from continuing to import, distribute, market, or sell their existing equipment.
Two Fridays ago, the FCC proposed a $25,000 fine on eight of these “front companies,” including those behind the Skyrover drones and Xtra cameras. Now, the agency is moving forward with much harsher penalties. It intends to ban these same companies from continuing to distribute their current inventory. If the retroactive ban takes effect, products like the Xtra version of the DJI Osmo Pocket 3 should disappear from major online retailers and the companies’ own websites. The ban would also force these businesses to potentially write off stock sitting in US warehouses.
The FCC has “tentatively” concluded that these companies are selling equipment that poses a national security risk. However, it claims it will listen to “specific evidence” to the contrary. The agency is currently taking public comments for 30 days before making a final decision. A former FCC official tells The Verge he has never heard the agency use the phrase “temporarily deferred the grantee codes” before.
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The FCC is also announcing that it is ending its relationship with SGS-CSTC Shenzhen, a Chinese test lab that helped some of these products gain authorization. SGS-CSTC replied to the FCC to claim it is not controlled by the Chinese government. The company noted that the China-owned CSTC only has 15 percent ownership of the lab. However, US law considers another entity to have control if it holds a 10 percent or greater stake.
Officials have brought these eight companies to the FCC’s attention by tracking the “DJI front companies.” All save one, XAG, did not respond to the agency’s information requests. XAG reportedly replied once but did not provide the specific details the FCC asked for. The FCC also cited reports about Xtra Technology in its announcement.
While the agency frames this action as a necessary security measure, critics point out that the government has never provided specific public evidence explaining why cameras or other non-drone products pose a threat. The FCC originally said it might take further action against the companies by July 20th if they did not comply with information requests.
