CLA-2 RR:CR:GC 964781TPB
U.S. Customs Service
P.O. Box 55580
Portland, OR 97328-5580
RE: Protest 2904-00-100102; Repeaters; Fiber Optic Cables; Composite Goods; Section XVI Note 3; GRI 3(c)
Dear Port Director:
This is our decision on Protest 2904-00-100102, filed against your classification of fiber optic cable incorporating repeaters under the Harmonized Tariff Schedule of the United States (“HTSUS”). The entries were liquidated July 28, 2000, and this protest filed on September 28, 2000.
The fiber optic/repeater assemblies were entered by the Protestant under subheading 8517.50.60, HTSUS, but were liquidated by the port under subheading 9013.80.90, HTSUS. The assemblies consist of optic repeaters connected to fiber optic cable by means of termination assemblies.
In an attachment included with the Protest form, the WCI Cable/ Alcatel (“Protestant”) describes the cable, in pertinent part, as follows:
…. The cable has a dual function, which is to act as an insulated electrical conductor and to act as a light transmitting fibre optic cable. The five different types of cable in this shipment are (1) Lightweight Cable; (2) Lightweight Protected Cable; (3) Single Armour Light Cable; (4) Single Armour Cable; and (5) Double Armour Cable. Each cable has a power voltage rating of 12 KV and an optical fiber assembly weight of 13.51 kg/km or 0.15 oz./ft.
…. The fibre optic strand by itself (without the protective coating or sheathing) measures 125 microns in diameter. With the protective coating or sheathing which [the manufacturer] applies to the fibre optic strand, the diameter of the fibre optic core measures 245 microns. This protective coating or sheathing comprises nearly one-half of the diameter of the optical fibre. The protective coating or sheathing is polyacrylic in nature and is necessary to protect the optical fibre from breakage and to provide abrasion resistance. ….
… [E]ach cable is quintessentially an electrical power cable, i.e., each has a conductor with insulating materials and carries high voltage current. ….
The actual optical fibre bundle within the cable is composed of three or four pair of fibre core with cladding that is sheathed or coated with a heat-cure solvent-based ink resin. The light pulses which contain the data being transmitted through the cable network are sent through the fibre core. The cladding “contains” the light through the process of “internal reflection”. Each individual fibre is coated with a protective polymeric sheet that is applied in the manufacturing process. Theses individually sheathed fibres are enclosed in a steel tube filled with thixotropic jelly (a gelantinous substance) that further protects the individual fibres.
The Protestant goes on to describe the repeater, in pertinent part, as follows:
The optical amplifiers (repeaters) which are attached to the fibre optic cable are used in the telecommunications system to extend the range of an optical telecommunications signal transmitted via optical fibre cable in a submarine cable network. Instead of converting optical signal into an electrical signal to amplify it, the optical amplifier increases the signal photonically by making it stronger.
Any signal is attenuated or weakened due to “loss” of the signal when it is transmitted over long distances. …. This necessitates the use of a repeater or signal amplifier when the transmission is intended to be over long distances. The repeater or amplifier rebuilds or regenerates the signal. Amplification or regenerating (repeating) of the light signal, in general, is necessary after approximately forty-five miles of cable in a system of this type. The repeating of a signal involves a superimposition of power on each bit of data which passes along the cable.
The energy source in the subject optical amplifier is a laser diode (or diodes). The laser, which is electrically powered, is used to excite or energize electrons in a length of erbium doped fibre through which the incoming signal will pass. The “excited” particles transfer their energy to the incoming signal by relaxing or becoming de-excited. As the incoming signal triggers the relaxation, the transfer of energy is synchronized to that incoming signal which results in an increase or regeneration of the signal data that becomes an exactly corresponding increased outgoing optical signal. … Each optical amplifier contains its own internal power supply.
The fibre-optic cable is connected to the optical amplifiers through the use of cable terminators or transition pieces (types of connecting devices).
Further supplemental information from the Protestant indicates that the repeaters are entered in the form of sealed, high-pressure, water-resistant housings that are suitable for installation on the seabed at a depth of up to 8,000 meters. Repeaters are located approximately every 73 kilometers along the submarine cable route. Encased within the repeaters are several electrical and optical devices. Among these devices are an active amplifier mounted onto “gain control supervisory circuits,” whose electronics contain all of the required firmware, software and integrated circuit (“IC”) chips by which the circuit pack operates. There is also a communications card, which serves as the key internal performance monitoring device.
The active amplifier portion of the circuit pack consists of the passive section plus the pump lasers and diodes. The pump lasers provide the energy to the passive section in order to amplify the telecommunication signal in the C-band portion of the telecommunication band. These pump lasers are mounted on to a printed circuit assembly (“PCA”). The dimensions of the pump laser printed circuit board are 3.5 inches by 6 inches.
The dimensions of the passive section are 7.25 inches by 7.25 inches. The passive amplifier portion contains the isolators, couplers, taps and mux devices for routing the telecommunication signal through the amplifier. There are no IC chips on this portion.
The fiber optic cable/repeater assembly consists of a submarine fiber optic cable that is approximately 1,627 km (1,011 mi.) in length with 19 optical repeater connected to the cable by means of terminal assemblies. Also imported was submarine fiber optic cable that is approximately 171 km (106 mi.) in length with two optical repeaters.
What is the classification of the fiber optic cable incorporating repeaters?
LAW AND ANALYSIS:
Initially we note that the protest was timely filed (i.e., within 90 days after but not before the notice of liquidation; (see 19 U.S.C. §1514(c)(3)(A)) and the matters protested before the matters protested are protestable (see 19 U.S.C. §1514(a)(2) and (5)).
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(a) states in part that incomplete or unfinished articles are to be classified as complete or finished if, as imported, they have the essential character of the complete or finished article. GRI 6 permits the comparison of same-level subheadings within the same heading, in part by application of Rules 1 through 5, applied by appropriate substitution of terms.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The HTSUS headings under consideration are as follows:
Section XVI, note 1(m), HTSUS, provides, in pertinent part, as follows:
This section does not cover:
(m) Articles of chapter 90;
Electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof:
8544 Insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors:
Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof:
The ENs for 85.17 read, in pertinent part, as follows:
APPARATUS FOR CARRIER-CURRENT LINE SYSTEMS OR FOR DIGITAL LINE SYSTEMS
These systems are based on the modulation of… a light beam by… digital signals. …. These systems are used for the transmission of all kinds of information (words, data, images, etc.)
These systems include all categories of multiplexers and related line equipment for metal or optical-fibre cables.
Customs has recently issued a ruling on the classification of optical fiber cable similar to the ones presently before us. HQ 963213, dated April 3, 2001, which we hereby incorporate by reference (see attachment), ruled that fiber optic cable with a sufficient protective coating or sheathing is classifiable under heading 8544, HTSUS. For the reasons set forth in that ruling, we find that the fiber optic cable presently before us would be classifiable under subheading 8544.70.00, HTSUS, if imported separately.
The optical repeaters are finished devices that are incorporated onto the submarine cable at the time of their importation. As demonstrated in a meeting on August 8, 2002, with the Protestant, the optical repeaters are used exclusively with long-haul digital telecommunication equipment. The repeaters house the apparatus necessary for the amplification of light signals traveling through the spliced fiber optic cables. This apparatus includes an erbium doped fiber amplifier, a laser diode module with a monitor PIN diode (laser pump), gain control and level control, monitor photodiode, Wavelength Division Multiplexer (“WDM”) coupler, monitor coupler and optical isolator.
Although the repeaters contain optical appliances and instruments, they are only part of the apparatus, while the terms of heading 8517, HTSUS, capture the product in its entirety. As a result, heading 9013, HTSUS, is not reached because the repeaters are specifically provided for in heading 8517, as apparatus for digital line systems. For that reason, the repeaters, separately imported, would be classifiable under subheading 8517.50.90, HTSUS.
The merchandise presently before us consists of fiber optic cable incorporating a number of optical repeaters at the time of its importation, making this a composite machine. Guidance for the classification of composite machines is provided by note 3 to Section XVI, which reads as follows:
3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
Here, we have optical repeaters, classifiable under heading 8517, HTSUS, incorporated onto fiber optic cable, which is classifiable under heading 8544, HTSUS. The purpose of the repeater is to boost the optical signal which is traveling through the fiber optic cable. This allows the range of digital line telecommunication systems to be vastly increased. Whether the fiber optic cable carrying the signal or the optical repeater, which boosts the signal performs the principal function cannot be determined. Both are equally essential functions. Because principal function cannot be determined, through application of GRI 3(c), we classify the whole under heading 8544, which occurs last in numerical order among those headings which equally merit consideration.
For the above reasons, through application of GRI 3(c), the fiber optic cable incorporating repeaters are classified under subheading 8544.70.00, HTSUS, which provides for: “Insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors: Optical fiber cables.”
The protest should be ALLOWED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs 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 Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Myles B. Harmon, Acting Director
Commercial Rulings Division