OT:RR:CTF:EMAIN H313242
Port Director
Attn.: Helene Mikes; Jennifer Samantha Davis
U.S. Customs and Border Protection
Port of Dallas/Ft. Worth
P.O. Box 619050
DFW Airport, TX 75261-9050
RE: Application for Further Review of Protest No. 5501-19-100295; Tariff classification of a mesh network extender.
Dear Port Director:
The following is our decision regarding the Application for Further Review (“AFR”) of Protest Number 5501-19-100295, timely filed on May 8, 2019, by Calix, Inc. (“Protestant” or “Calix”). This AFR concerns U.S. Customs and Border Protection’s (“CBP”) classification, under the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), of a certain mesh network extender.
FACTS:
The protested merchandise, referred to as the Calix 804 Mesh, consists of one (1) entry that was entered at the Port of Dallas/Ft. Worth (“Port”) on October 17, 2018 which was liquidated on March 8, 2019, under subheading 8517.62.0020, HTSUSA, as “Telephone sets…; other apparatus for the transmission or reception of voice, images or other data…: Other apparatus for transmission or reception…: Machines for the reception, conversion, and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Switching and routing apparatus”. Calix filed this Protest and AFR on May 8, 2019, asserting that the subject merchandise is properly classified under subheading 8517.62.0090, HTSUSA, as “Telephone sets…; other apparatus for the transmission or reception of voice, images or other data…: Other apparatus for transmission or reception…: Machines for the reception, conversion, and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Other.”
ISSUE:
Whether the enhanced mesh network extender is switching and routing apparatus of subheading 8517.62.0020, HTSUSA.
LAW AND ANALYSIS:
The protest was properly filed as a decision on classification under 19 U.S.C. § 1514(a)(2). The protest was timely filed within 180 days of liquidation of the entries. See 19 U.S.C. § 1514(c)(3).
Further Review of Protest Number 5501-19-100295 was properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) and (b) because the decision against which the protest was filed is alleged to be inconsistent with a ruling of the Commissioner of Customs or his designee, or with a decision made at any port with respect to substantially similar merchandise. Protestant also alleges that this protest involves questions of law or fact which have not been decided on by CBP or by the Customs courts. Specifically, Protestant argues that the Port’s decision to liquidate the protested merchandise under subheading 8517.62.0020, HTSUS, was based on CBP rulings on similar merchandise at the time of entry. However, CBP has recently had an opportunity to re-examine network range extenders and has now classified them under subheading 8517.62.0090, HTSUSA. See Headquarters Ruling letter (HQ) H306942, dated December 4, 2020, in which CBP classified similar network range extenders in subheading 8517.62.0090, HTSUSA, as “Telephone sets…; other apparatus for the transmission or reception of voice, images or other data…: Other apparatus for transmission or reception…: Machines for the reception, conversion, and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Other.”.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
GRI 6 provides that for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable.
The provisions under consideration are as follows:
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof:
Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network):
8517.62.00 Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus…
8517.62.0020 Switching and routing apparatus
8517.62.0090 Other
There is no dispute at the six-digit level that the protested merchandise is classified in subheading 8517.62, HTSUS, as “Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus”. Instead, the dispute arises at the ten-digit level as to whether or not the protested merchandise is “switching and routing apparatus” of subheading 8517.62.0020, HTSUSA, or “other” of subheading 8517.62.0090, HTSUSA.
The Protestant asserts that the Calix 804 Mesh product is a Wi-Fi extender used to provide better coverage/reach of a home’s Wi-Fi/internet signal. It must be connected to and work with a separate router. The Protestant states that the Calix 804 Mesh product is not itself a router or switch nor does it perform the function of routing or switching data. The Calix 804 Mesh product is only a Wi-Fi extender that works in conjunction with a paired router.
With regard to subheading 8517.62.0020, CBP stated in HQ H301537, dated October 17, 2019, the issue is whether the scope of subheading 8517.62.0020 covers only the commodities known as “switches” and “routers”, or any apparatus used to switch and/or route data. A plain reading of the terms of the subheading would favor the latter interpretation, as it does not name a specific device, such as in the case of subheading 8517.62.0010, “modems”. Rather, subheading 8517.62.0020 provides for “switching and routing apparatus”, i.e., apparatus that have the ability to switch or route voice, images, or other data (compare this if the subheading read “switches and routers”).
To be classified as switching or routing apparatus, the devices must perform switching or routing themselves and not merely rely on an external switching or routing device. A routing device performs the traffic directing function. It is used to forward IP packets in a wide area network (WAN) to a destined client in a local area network (LAN) based on reading the network address information in the data packet, which determines the destination. Then using information in its routing table, or routing policy, it actively directs the packet to the next network on its journey. A routing table file is stored in random access memory (RAM) that contains network information.
A network switch is a multiple-Ethernet-port device that physically connects individual network devices in a computer network, so they can communicate with one another. It is the key component in a business network, connecting multiple network devices such as: PCs, printers, servers and peripherals, and it associates each device’s address with one of the physical ports on the switch.
Unlike a router or a switch, Wi-Fi range extenders have no intelligence and make no decisions as to where the data goes next. They do not contain a software or firmware routing table and cannot read the network address information in the data packet to determine the specific destination of the data packet.
In this case, the 804 Mesh is paired with a Gateway that connects to a users home. The Gateway connects the users home to the internet and serves as a router and controller for the product at issue. The 804 Mesh unit is sold separately from the Gateway and must be paired in order to function. The 804 Mesh performs no switching or routing functions itself, but rather functions as a Wi-Fi extender. As such, it is properly classified under subheading 8517.62.0090, HTSUSA. This is consistent with CBP’s recent ruling on Wi-Fi extenders in HQ H306942, dated December 4, 2020.
HOLDING:
By application of GRIs 1 and 6, the mesh network extender is classified in heading 8517, HTSUS, and specifically in subheading 8517.62.0090, HTSUSA, which provides for “Telephone sets…; other apparatus for the transmission or reception of voice, images or other data…: Other apparatus for transmission or reception…: Machines for the reception, conversion, and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Other.” The column one, general rate of duty at the time of entry is free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
You are instructed to GRANT the protest in full.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel and to the public on the Customs Rulings Online Search System (“CROSS”), at https://rulings.cbp.gov/, and other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division