Bloomberg News

Device Sales Delays Possible as Reviews Halted by U.S. Shutdown

October 10, 2013

Device makers such as Google Inc. (GOOG:US) may have to delay introductions of new smartphones and other products because the partial U.S. government shutdown halted certifications that the gadgets don’t cause interference.

Every computer, mobile phone, gaming system, TV, wireless medical device and anything that emits radio waves needs to pass a review by the Federal Communications Commission. The FCC clears about 16,000 electronic devices annually, according to figures presented last month to lawmakers by Jessica Rosenworcel, an FCC commissioner.

That output is now at zero, and that “could be something that’s a real drag on the digital economy the longer it goes on,” Rosenworcel, a Democrat, said in an interview.

The FCC may become backed up once it resumes operations, creating the potential for delays in introductions of devices from Google, Apple Inc. (AAPL:US), Samsung Electronics Co., HTC Corp. (2498) and LG Electronics Inc. (066570), law firm Hogan Lovells said in an Oct. 9 note.

“Increasingly it’s going to have an impact on the widely known and available consumer products, depending on how long the shutdown lasts,” Michele Farquhar, a Washington-based partner with Hogan Lovells, said in an interview. Products that need approval include smartphones, tablet computers and laptops, Farquhar said.

Companies rely on private test laboratories for much of the certification and need the FCC for final approval, said Farquhar, a former wireless bureau chief for the agency.

“The longer the shutdown continues, the greater the risk that new devices will sit in warehouses and shipping containers unassembled or pending final design approval,” Hogan Lovells said in its note.

Holiday Sales

The FCC furloughed 98 percent of its staff and closed most of its operations Oct. 1 as agencies shut down with Congress unable to agree on spending. Lawmakers today discussed a proposal to defuse a parallel disagreement that didn’t include language to reopen the government.

Companies have speeded electronic product introductions in recent years, with applications at the FCC increasing by 400 percent over the past 10 years, according to Rosenworcel’s testimony to Senate appropriators.

Products typically are planned a year in advance, and devices intended for sale during the fourth quarter that includes Christmas sales normally clear the FCC’s process by June or July, Bruce Franca, a former official in the agency’s Office of Engineering and Technology that vets electronics, said in an interview.

Shari Yoder Doherty, a spokeswoman for Mountain View, California-based Google, declined to comment as did William Moss, a spokesman for the company’s phone-making unit Motorola Mobility. Kristin Huguet, a spokeswoman for Apple, declined to comment.

“There is no indication of major impact on Sony’s operation from the U.S. FCC shutdown so far,” Tokyo-based Sony spokeswoman Misato Suzuki said in an e-mail.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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