CLA-2 CO:R:C:G 086478 MBR
Mr. Harry Wood
H.A. & J.L. Wood, Inc.
Pembina, North Dakota
58271
RE: "DevelNet" networking data system
Dear Mr. Wood:
This is in reply to your letter October 24, 1989, on behalf of
Develcon Electronics, requesting classification of the DevelNet
system, under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA).
FACTS:
The DevelNet system has been designed to fulfill local area
network requirements by providing data processing functions
similar to a centralized data PBX. The system also allows the
user to create regional or national "wide area" networks by
connecting various local area networks into a fully integrated
data communications network. This will permit users of the
various terminals, computers, or other devices, in one part of
the network to communicate with other equipment (users, data
bases, terminals, etc.) throughout the network which may operate
with different communications protocols and speeds. In addition,
DevelNet is being developed to provide access to public and
private data transmission networks such as Telenet, Tymnet,
Datapac and Ethernet. DevelNet is also being designed to
incorporate data PBX or local area networking devices from other
vendors into its wide area network. This will permit customers
who have already installed local data communications equipment
(i.e., Local Area Networks) to implement a wide area network
without having to replace previously installed equipment.
DevelNet has been designed to incorporate network management
features, redundant power supplies, controller boards, and self
diagnostic capabilities.
The DevelNet system consists of the following components:
Chassis, Models 7401 and 7403R - The DevelNet chassis houses the
various components that constitute the "DevelNet Node." The
chassis performs no electrical or electronic functions other
than termination of the internal DevelNet communications bus
and battery power for memory. Model 7401 is the chassis for
a 32-slot DevelNet Node. Either of these chassis combined
with the appropriate cards and power supplies described
below form a working system.
Arbiter Cards, Models 7220 and 7221 - The Arbiter cards primarily
govern access to the internal DevelNet data bus. The
various DevelNet cards require the data bus to transfer data
and control characters between themselves. The other
functions of the Arbiter cards include: error detection,
statistical reporting and system clocks.
Node Controller Card, Model 7202 - The operating system software
and configuration database are resident in memory on the
Node Controller Card. The Node Controller provides the
central processing and control necessary for the proper
operation of the DevelNet Node as a whole and configuration
for the entities that make up the Node.
Linecards, Models 7108, 7118 and 7124 - These provide the means
of connecting external digital equipment to a DevelNet Node.
The linecard interfaces conform to the Electronic Industries
Association RS-232-C standard which specifies the interface
between Data Terminal Equipment (DTE) and Data Communication
Equipment (DCE).
Power Supplies, Models 7330, 7331 and 7386 - The power supplies
provide 5 volt and 15 volt dc, required to operate the
DevelNet Nodes. Models 7330 and 7331 are "redundant" and
operate in a load sharing capacity (for a 10 slot DevelNet
Node).
ISSUE:
What is the classification of the DevelNet networking data
system, under the Harmonized Tariff Schedule of the United States
Annotated (HTSUSA)?
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUSA
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
Heading 8517, HTSUSA, provides for: "[e]lectrical apparatus for
line telephony or line telegraphy, including such apparatus for
carrier-current line systems." The Harmonized Commodity
Description and Coding System Explanatory Notes (EN) to heading
8517 of the HTSUSA, page 1360, state:
The term "electrical apparatus for line telephony or line
telegraphy" means apparatus for the transmission between two
points of speech or other sounds (or of symbols representing
written messages, images or other data), by variation of an
electric current or of an optical wave flowing in a metallic
or dielectric (copper, optical fibers, combination cable,
etc.) circuit connecting the transmitting station to the
receiving station. The heading covers all such electrical
apparatus designed for this purpose, including the special
apparatus used for carrier-current line systems.
The term "apparatus" has been defined by the courts as a
combination of articles and materials which are intended,
adapted, and necessary for the accomplishment of some purpose.
The Deseret Co., v. United States, ___CIT___, Slip Op. 86-93
(1986). The DevelNet system and its components are clearly a
combination of articles and materials intended, adapted and
necessary for the accomplishment of a specific purpose, i.e.,
that of data system communication. Therefore, the DevelNet
system and each of its components can be appropriately termed
"apparatus."
The issue of what "Carrier Current" line systems are has been
raised. "Carrier Current" is used in connection with both power
and communications circuits, however, the principle is basically
the same for both systems. The term refers to the use of a
relatively high-frequency ac superimposed on the ordinary circuit
frequencies in order to increase the usefulness of a given
transmission line. Thus, in the case of power systems, carrier
currents of several kHz frequency are coupled to the 60-Hz
transmission lines. These carrier currents may be modulated to
provide telephone communication between points on the power
system or they may be used to actuate relays on the system. The
latter use is known as carrier relaying. Carrier currents have
greatly extended the usefulness of existing line facilities of
the telephone and telegraph companies. Several carrier
frequencies may be coupled to the lines already having regular
voice or telegraph signals on them. Each of these carrier
frequencies may be modulated with a separate voice or telegraph
channel and thus a given line may carry the regular signal plus
several new carrier channels, each of which is equivalent to
another circuit at regular frequencies. At the receiving end,
the various channels are separated by filters and the signals
are demodulated and then fed to conventional phone or telegraph
circuits. The number of carrier channels which may be applied to
a given line depends upon the characteristics of the line,
varying from one or two for some lines to several hundred for a
coaxial cable. Van Nostrand's Scientific Encyclopedia, Seventh
Edition, Vol. 1, page 518 (1989).
The Customs Co-Operation Council Harmonized Commodity
Description and Coding System, Summary of Comments and
Observations by the Technical Team, Chapter 85, (April 25, 1979)
stated:
With regard to packet switching equipment, the Technical
Team reproduces below, for information, a text published by
the Secretariat for the attention of the Working Party on
Customs applications of computers (Doc. 21.926):
The transmission of computer system messages or parts
of messages between distant points in the form of
discrete packets which are transmitted over an
independently operated computer driven network. The
routes followed by messages are determined by the
network and not by the sending systems. Packet
switching is in many ways analogous to the conventional
manual postal system in which an independent carrier
receives and delivers letter packets for a community of
users. Any one transmission line of the network may
carry messages from different senders to different
addresses. A message to be transmitted across a
packet switched network is handled in the following
manner: [t]he message is split into a number of
packets of fixed maximum size each prefixed by the
source and destination addresses, length and sequence
number. Each packet is then handled by the network as
a discrete message, being passed from one switch or
node of the network to the next as soon as possible,
depending on the destination address, the traffic
density and the routes available. At the destination,
the addresses, etc., are stripped off, the packets
combined to form the original message and an
acknowledgement sent back to the source according to
whether or not the message is free from error. By
using high speed links for the network, packets,
originating from a large number of users transmitting
into the network at moderate speeds, may be
interleaved within the network, while maintaining full
integrity and security. In this manner, network time
is shared between users in a similar manner to that of
a time sharing computer system.
Although the above text is not binding on us, such information
is helpful in that it is demonstative of the Customs Co-Operation
Council's consideration for inclusion of this type of apparatus
in Chapter 85.
Clearly, the DevelNet networking data system is apparatus
designed for the transmission of data between two points, by
variation of an electric current connecting the transmitting
station to the receiving station. Furthermore, you state that
the DevelNet is analogous to a centralized data PBX (Private
Branch Exchange). Therefore, it is Customs position that the
DevelNet is properly classifiable under subheading 8517.30.50,
which provides for: "[e]lectrical apparatus for line telephony or
telegraphy...: [t]elegraphic or telephonic switching apparatus:
[o]ther." See NY 838270 (March 24, 1989).
HOLDING:
The DevelNet is classifiable under subheading 8517.30.50,
HTSUSA, (whether imported together or as separate components)
which provides for: "[e]lectrical apparatus for line telephony or
telegraphy...: [t]elegraphic or telephonic switching apparatus:
[o]ther."
Sincerely,
John Durant, Director
Commercial Rulings Division