ماژول سوئیچ حفاظت نوری: چون سیگنال را «تبدیل» نمی‌کند، در ۸۵۱۷.۶۲ نمی‌آید و «سایر» ۸۵۱۷.۶۹ است

OT:RR:CTF:EMAIN H323634 MFT

Center Director Service Port of Dallas-Ft. Worth U.S. Customs and Border Protection 7501 Esters Blvd., Suite 160 Irving, TX 75063 ATTN: David Pulkrabek, Import Specialist

Dear Center Director:

This letter concerns an Application for Further Review (AFR) of Protest No. 5501-21-105519, filed on June 10, 2021, by Coriant North America, LLC (protestant). The protestant submitted the AFR regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of certain optical protection switch modules (OPSMs) by U.S. Customs and Border Protection (CBP). In reaching the determination below, CBP has considered information submitted with the Protest and AFR. The Protestant withdrew its request for an oral discussion of the matter per 19 CFR § 177.4 by email on September 9, 2024.

The subject optical protection switch modules (OPSMs) are devices used in fiber optic communication networks. Essentially, the OPSMs’ function is to protect a network’s connectivity during service disruptions by automatically rerouting optical signals carrying pulses of light. The OPSMs execute this function by diverting the paths optical signals may travel across two fiber optic cables. Each OPSM consists of (1) a two-way splitter, (2) network tap detectors, and (3) an optical protection switch. An OPSM is installed at each end of a fiber optic cable connection: one on the transmitting end of the connection and another on the receiving end.

On the transmitting OPSM, an optical signal carrying pulses of light enters the OPSM’s two-way splitter. The two-way splitter duplicates the pulses into two signals: a “working” optical signal and a “protective” (i.e., a backup) optical signal. Both signals retain the same characteristics as the original optical signal. After the two-way splitter duplicates the original signal, the working and protective signals travel on separate fiber optic cables toward the receiving OPSM.

On the receiving OPSM, the working signal and the protective signal enter separate network tap detectors. The network tap detectors analyze and compare the strength of each signal. If the working signal’s strength is weaker than the protective signal’s strength, a disruption to network connectivity may have occurred (e.g., outages, equipment repairs, and other service interruptions). Upon sensing a possible disruption, the optical protection switch on the OPSM activates. The optical protection switch disconnects the working signal’s transmission path and connects the protective signal’s transmission path. Switching the transmission paths maintains the fiber optic network’s connectivity: the protective signal can continue traveling down the fiber optic cable and reach its destination despite the working signal’s lower strength.

The protestant entered the subject merchandise on June 13, 2020, and June 26, 2020, under subheading 8517.62.00, HTSUS. The protestant argues that the “OPS Modules do not modify the bit stream nor interprets [sic] data from the bit stream,” and that “OPS Modules merely transparently [sic] transmit the signal from input to output.”

Whether the subject optical protection switch modules (OPSMs) constitute “Machines for the reception, conversion, and transmission or regeneration of voice, images or other data, including switching and routing apparatus” under subheading 8517.62, HTSUS.

A decision on classification and the rate and amount of duties chargeable is a protestable matter under 19 U.S.C. § 1514(a)(2). The subject protest was timely filed on June 10, 2021, within 180 days of liquidation, pursuant to 19 U.S.C § 1514(c)(3). Further review of Protest No. 5501-21-105519 is properly accorded to the protestant pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed “[i]s alleged to be inconsistent with a ruling of the Commissioner of CBP or his designee, or with a decision made by CBP with respect to the same or substantially similar merchandise.” Specifically, the protestant points to New York Ruling Letter (NY) N022695 as indication that the “[o]ptical protection switching devices and similar devices (generally) were previously classified under [statistical reporting number] 8517.62.0050,” HTSUS Annotated (HTSUSA). [Footnote 1: See New York Ruling Letter (NY) N022695 (dated Feb. 28, 2008).]

Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). General Rule of Interpretation 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order.

General Rule of Interpretation 6 provides that “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.” For purposes of GRI 6, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.

The following heading and subheadings of the HTSUS are under consideration:

8517 Telephone sets, including smartphones and other 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):

*****

Per GRIs 1 and 6, the terms of the heading and subheadings under consideration will govern the disposition of the subject merchandise. There is no dispute that the subject OPSMs constitute apparatuses “for the transmission or reception of voice, images or other data,” in accordance with the terms of heading 8517, HTSUS. The OPSMs are clearly designed to facilitate and preserve the connectivity of a fiber optic network, along which voice, images, and other data are transmitted and received. As such, this matter turns on whether the subject merchandise meets the terms of subheading 8517.62, HTSUS.

The plain terms of subheading 8517.62, HTSUS, indicate that a machine classifiable therein must be used for certain functions, namely “reception, conversion and transmission or regeneration.” The term “and” typically joins a conjunctive list and connects ideas together, while the term “or” typically joins a disjunctive list and presents nonexclusive alternatives. As such, subheading 8517.62 requires that a covered machine be used for at least three functions: (1) “reception”; (2) “conversion”; and (3) “transmission,” “regeneration,” or both. Further, the object of these functions must be “voice, images or other data.” The term “including” in this subheading is presumptively nonexclusive and simply provides an illustrative application – here, a “switching and routing apparatus,” but potentially other undescribed machines.

Particularly as it relates to the subheadings under consideration, our interpretation of the list of required functions accords with the structure of the legal text, prior CBP decisions, [Footnote 2: See, e.g., NY N271761 (Jan. 29, 2016) (finding that wireless switches that could only transmit data were not classifiable under subheading 8517.62.0050, HTSUS, by application of GRI 1).] and a longstanding presumption against statutory surplusage. Asserting that the conjunct “and” under subheading 8517.62, HTSUS, joins a disjunctive list renders the competing “other” provision under subheading 8517.69, HTSUS, superfluous. If subheading 8517.62, HTSUS, merely requires a machine to be used for one function – receive, convert, or transmit or regenerate – then subheading 8517.62, HTSUS, would include all “other” merchandise (besides “[b]ase stations” under subheading 8517.61, HTSUS) that could possibly be described as “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).” Thus, we reason that only machines which receive, convert, and transmit or regenerate voice, images, or other data can be classified under subheading 8517.62, HTSUS.

Turning to the subject merchandise, GRIs 1 and 6 require that the OPSMs must be used for receiving, converting, and transmitting or regenerating voice, images, or other data to be classifiable under subheading 8517.62, HTSUS. But because the subject OPSMs can only perform two of these functions – (1) “reception” and (2) “transmission,” but not “conversion” – the OPSMs cannot be classified under subheading 8517.62, HTSUS. The protestant’s submissions clearly demonstrate that the OPSMs can transmit and receive an optical signal. As described above, two OPSMs are installed at each end of a fiber optic connection: one on the transmitting end of the connection that transmits the working signal and protective signal, and another on the receiving end that receives both signals and compares their signal strength. One OPSM transmits; the other receives. But nothing in the rerouting process demonstrates the “conversion” of voice, images, or other data.

The “conversion” of an optical signal must involve “[t]he action of turning, or process of being turned, into or to something else,” including a “change of form or properties” or “alteration.” [Footnote 3: Conversion, n. meanings, etymology and more, OXFORD ENG. DICTIONARY, https://www.oed.com/dictionary/conversion_n?tab=meaning_and_use#8281189 (sense II.11.a) (last visited Aug. 27, 2024).] But the OPSMs cannot fundamentally change an optical signal’s character, form, or properties. As discussed above, the two-way splitters in the OPSMs merely duplicate the original optical signal into two identical signals. The working signal and the protective signal share the same characteristics as the original optical signal. Though they travel on separate fiber optic cables, these pulses of light are inherently the same as the original source. The mere duplication of these signals cannot constitute “conversion” if their properties are identical. Indeed, as the protestant states, the “[OPSMs] do not modify the bit stream.” Rather, according to the protestant, the OPSMs “merely transparently [sic] transmit the signal from input to output.” The mere transmission “from input to output,” and the lack of modification to the bit stream, further emphasize the absence of a change in character, form, or function. Because the OPSMs cannot convert an optical signal, the OPSMs fail to perform all required functions provided under subheading 8517.62, HTSUS, and cannot be classified under that subheading.

Instead, the OPSMs fit squarely within the ambit of subheading 8517.69, HTSUS, the basket provision that covers “other” articles that do not meet the terms of the superior subheadings. An optical signal is fundamentally designed to carry information in a fiber optic communication network, and we previously described how the OPSMs can transmit and receive an optical signal. Given these facts, the OPSMs constitute an apparatus that can transmit or receive voice, images, or other data. Because the OPSMs cannot be classified under subheading 8517.62, HTSUS, and because they can transmit and receive voice, images, or other data as part of a fiber optic connection, the OPSMs are properly classified under subheading 8517.69, HTSUS.

The protestant argues that CBP should classify the subject merchandise under subheading 8517.62, HTSUS, in keeping with its treatment of the “managed optical services switch” at issue in NY N022265. The facts of that decision were described as follows:

It is telecommunications equipment that is used to direct telephone and data traffic. The descriptive literature submitted for the Ciena CN 4300 describes this item as an operator class multiservice transport and switching platform that integrates aggregation, cross-connect functions and WDM capabilities to enable a diverse range of metro service offerings, including Ethernet, storage and SONET/SDH transport.

Ciena’s CN 4300 Managed Optical Services Switch has from 8 to 64 service ports at 850 nm, 1310 nm and CWDM wavelengths using Small Form factor Pluggable (SFP) optics and weighs 65 lbs (29Kg) fully loaded. A central non-blocking protocol independent switch matrix enables dynamic service provisioning, flexible service topologies, and automatic switching on a per-service granularity. Optional redundancy on line cards and common elements guarantees carrier-class service availability with sub-millisecond automatic protection switching.

Although the managed optical services switch of NY N022265 was capable of “automatic protection switching,” the device also contained several ports to “direct telephone and data traffic” and exhibited networking capabilities beyond the mere transmission “from input to output” as seen in the subject OPSMs. The duplication of an optical signal here does not “direct” that signal to a specific address or destination in the same manner as the managed optical services switch there.

By application of GRIs 1 and 6, the optical protection switch modules (OPSMs) are properly classified under subheading 8517.69.00, HTSUS, which provides for: “Telephone sets, including smartphones and other 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): Other.” The column one general rate of duty for merchandise classified under this subheading is free.

Pursuant to U.S. Notes 20(e) and 20(f) to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8517.69.00, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, an importer must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8517.69.00, HTSUS, noted above, for products of China.

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 on the Internet at https://hts.usitc.gov/.

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/, which can be found on the CBP website at https://www.cbp.gov/ and other methods of public distribution.

Sincerely, for Yuliya A. Gulis, Director Commercial and Trade Facilitation Division