ESA Discusses Fair Repair Act and its Potential Consequences for Alarm System Companies

A federal bill was filed on March 14, 2022 that could alter the contracts and practices of electronic security and life safety companies across the country, if passed. S. 3830 is titled the “Fair Repair Act” and was filed with bipartisan sponsors (Senator Ben Ray Lujan (D-NM) and Senator Cynthia Lummis (R-WY).

As filed the bill would require original equipment manufacturers (OEM) of digital electronic equipment to make documentation, diagnostic and repair information available to independent repair providers and owners of such equipment under fair and reasonable terms. We have seen many similar bills filed in states across the country, but few have reached any level of success. This bill would set up a federal requirement with enforcement delegated to the Federal Trade Commission (FTC).

Language in this bill could force alarm companies to alter their practices and ultimately create problems with alarm contracts as well. Here’s why – “Digital electronic equipment” is defined as any product that depends for its functioning, in whole or in part, on digital electronics embedded in or attached to the product. That definition would tend to include alarm panels.

Next, security-related functions are NOT excluded from the requirements of this bill. As written, this language states:

For digital electronic equipment that contains an electronic security lock or other security-related function, the original equipment manufacturer shall make available to the owner and to independent repair providers, on fair and reasonable terms, any special documentation, tools, and parts needed to disable the lock or function, and to reset it when disabled in the course of diagnosis, maintenance, or repair of the equipment.

It is also important at this stage to determine how the OEM is defined in the bill. Here it is –

“The term “original equipment manufacturer” or “OEM” means any person who is engaged in the business of selling, leasing, or otherwise supplying new digital electronic equipment or parts of equipment manufactured by or on behalf of itself, to any person.”

When we combine the definition of OEM with other provisions in this bill, a number of questions and concerns are immediately raised. Are the proprietary lockout codes of alarm panels, their use and their need to maintain electronic security systems now subject to being “open” for use by end users and independent repair facilities? Will the OEM code be used, or could it be used to take over alarm systems under contract? Many more questions could follow.

What is not known and cannot be known until the bill is passed and enacted is how some of the terms and definitions within it would be interpreted by the FTC. This is always the case with federal legislation as Congress has an intended propensity to keep some things vague in bills and leave massive details to the regulatory agencies.

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